ObamaCare Band-Aid? Millions potentially exempted from individual mandate through 2016

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ObamaCare working the way it was supposed to?

Debate over health care law fallout

The Obama administration is throwing another Band-Aid at the millions of people wounded by the Affordable Care Act when they were booted from their existing health coverage.

The latest change, quietly announced last week, allows many of them to skirt the law's "individual mandate" through 2016.

The change was included in last week's announcement that the government would let people keep otherwise out-of-compliance health plans for another two years. Buried in the official memo was a line giving people whose policies were canceled a "hardship exemption" through October 2016.

What that means is many of those who were dropped from their plans last year will not be required to pay a fine for failing to buy new insurance.

For many, though, the damage of being kicked off their health insurance is already done.

Some states and insurers are still refusing to re-offer canceled plans. Critics of the law cited the latest extension as yet another sign of the problems and confusion surrounding the law.

"With less than three weeks remaining before the end of the health care law's first open enrollment period, the Obama administration continues to quietly abandon many of the law's core elements," Republicans on the House Energy and Commerce Committee said in a post on the panel's website, accusing the administration of trying to "bury its failures when nobody is watching."

People have been told for months that March 31 is the deadline to buy insurance or face a penalty, but an untold number will now have three years to comply.

The administration, late last year, had already delayed the mandate for that group through 2014. The latest change extends that for two more years.

An official with the Department of Health and Human Services told FoxNews.com that "we want consumers to have as many options as possible" and that the "transitional policy" will let them keep the coverage they have "if they would like to do so."

The agency later issued this statement: “This is a common sense clarification of the law that we made clear last December. For the limited number of consumers whose plans have been cancelled and are seeking coverage, this is one more option."

The situation is murkier than the administration makes it sound. It is up to state insurance commissioners and insurance companies whether to re-offer canceled plans, and not all are going along with the administration's reprieve. This continues to leave those who lost coverage seeking new policies that in some cases offer an inferior network of doctors or come with higher premiums.

As for those being allowed to avoid the mandate fine, the official guidance says it will apply to those who lost their coverage and "believe other Marketplace plans are unaffordable." It will also let them apply for bare-bones "catastrophic coverage" if they submit documentation showing their health plan was canceled.

The extension is another tweak to a law that's already been tweaked dozens of times since its passage.

Delaying the mandate rule for some poses a challenge to the IRS, an already embattled agency that will be tasked with enforcing the penalty. Many lawmakers have pushed for the administration to delay the mandate for everyone, but so far the administration has not agreed.

White House Press Secretary Jay Carney on Wednesday defended the implementation of the law so far, and the administration's progress in getting people to sign up.

The latest estimates show 4.2 million people have signed up via the ObamaCare exchanges -- a number lagging behind earlier projections, but nevertheless a big increase from the meager sign-ups in October and November. The numbers include some of those who lost their health plans last year.

"There's no question, we got off to a really bad start, and that was on us," Carney said. "And a lot of effort was put into making sure that the website and the problems with it were fixed. Once that happened, we've seen the American people's interest in the product not waiver at all, despite all of the obstacles to obtaining it that were put in front of them, and, you know, we've seen a consistent growth in enrollments."