Updated Nov. 14, 2013 10:18 p.m. ET
WASHINGTON—President Barack Obama, in a retreat aimed at quelling the latest protest over his health-care law, on Thursday said insurers can extend by one year those policies they had canceled for failing to meet the law's requirements.
Mr. Obama accompanied the policy shift with an admission of personal responsibility for the botched launch of the program.
"We fumbled the rollout on this health-care law," Mr. Obama said in a televised White House news conference. "Am I going to have to do some work to rebuild confidence around some of our initiatives? Yeah."
He added that the troubles had hurt his party: "There is no doubt that our failure to roll out the [health law] smoothly has put a burden on Democrats."
The president's support for allowing the insurance plans to continue for existing policyholders essentially shifted responsibility for the cancellations to the insurers.
Millions of people have received cancellation notices from their insurers, who said the policies aren't compliant with new requirements for coverage and have changed too much since 2010 to be eligible for a "grandfathering" exemption. It remained unclear how many insurers would restore policies they had ended, and some industry officials called Mr. Obama's reversal unworkable.
Administration officials crafted the new policy over the last week as the White House sought to address a backlash over Mr. Obama's faulty promise, made during the fight over his 2010 health-care overhaul, that Americans who liked their insurance plans would be able to keep them.
The timing of Mr. Obama's announcement was designed to get ahead of a Friday vote in the House on a Republican bill to alter the law. The White House opposed the legislation, but it was gaining traction among Democrats.
With the health law—and, in many ways, his second term—hanging in the balance, Mr. Obama offered a 45-minute mea culpa over the missteps that threaten to undermine his signature legislative achievement, including the problem-plagued federal insurance website that has blocked many Americans from signing up for policies.
The policy change, coupled with Mr. Obama's contrition, relieved pressure on Democrats who had anxiously begun to move toward supporting legislation to address the health-policy cancellations. But it also means that insurers may continue to offer less-than-robust plans that the law intends to end.
"I think the president's proposal is a constructive first step," said Sen. Richard Blumenthal (D., Conn.). "But it's only a first step."
Rep. Jim Moran (D., Va.) said lawmakers had worried "that there were a lot of problems, and the administration wasn't adequately acknowledging them and accepting accountability and responsibility to fix them. I think that's changed to a large extent.''
House Speaker John Boehner (R., Ohio), however, not only questioned the legality of the administration's action but also made clear lawmakers will press ahead with Friday's vote.
"I am highly skeptical that they can do this administratively," Mr. Boehner said, renewing his call for the entire law to be scrapped. The White House says Supreme Court rulings have held that agencies can exercise discretion to enforce laws in a way that achieves the goals of the statute.
While the move may have advanced Mr. Obama's goal of damping Democratic protest, it created broad, new uncertainties for the Affordable Care Act.
The president is depending on state insurance commissioners to allow carriers to ignore the law's requirements for a minimum standard of coverage, and for carriers to agree to rescind cancellations.
Some state insurance commissioners expressed reservations about the move, while others said they would allow carriers to take advantage of the extension.
Mr. Obama's move to allow canceled plans to be reinstated may pose a threat to the law.
Actuaries have been concerned that the new policies offered through the online exchange are being saddled with too many sick people. That is because they are the consumers who may be most willing to press through the troubled sign-up process.
Many people who have received cancellation notices are believed to be relatively healthy, experts said, because the policies were purchased at a time when insurers were allowed to exclude certain unhealthy buyers. If these healthier consumers don't come into the new markets in the law's first year, the balance of risk in the policies could be harmed.
White House officials said the administration was considering changes to a government-run risk-adjustment program that is part of the law to try to compensate insurers for any higher risk.
Mr. Obama's unusual public acknowledgment of personal fault came as polls show a growing number of Americans are losing trust in his leadership and disapproving not only of the job he is doing but of him personally.
When the president settled on the new policy earlier this week, he decided to announce it in a news conference, a White House official said.
Aides said he wanted to show that he is in touch with the scale of the problems, that he wanted "to own this and be very clear that he gets it," as one of them put it.
"The president wanted to do a press conference to demonstrate some candor and realism," a White House official said. "There is this myth out there that he wasn't engaged or aloof."
Many Democrats, including those who supported legislative fixes, such as a bill backed by Sen. Mary Landrieu (D., La.), welcomed Mr. Obama's announcement.
"It doesn't go as far as I'd like it to go, but it's certainly a step in the right direction," said Sen. Jeff Merkley (D., Ore.), one of the most vocal critics of the Obama administration's handling of the health-law rollout.
Republicans were not so moved. Rep. Steve Scalise (R., La.), chairman of the conservative Republican Study Committee, said Mr. Obama's news conference "was like a person who burned down your house, later showing up with an empty bucket and talking about how inadequate your house was before the fire."
Some Democrats said more may have to be done legislatively, depending on how effective his administration action proves to be. White House officials also have not ruled out backing legislative action, an administration official said.
Senate Majority Leader Harry Reid (D., Nev.) said he was prepared to advance legislation if necessary, but signaled no immediate plans to do so.
"The fix proposed by President Obama today is an important step toward addressing a problem that has arisen and if we need to do more, we will," Mr. Reid said.
—Janet Hook, Peter Nicholas, Siobhan Hughes
and Leslie Scism
contributed to this article.
Write to Carol E. Lee at carol.lee@wsj.com and Louise Radnofsky at louise.radnofsky@wsj.com
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