UPDATE 1-Latest delay adds to chaotic rollout of Obama's health law
(Adds comment by Obama and U.S. officials on enrollment, paragraphs 10-11)
WASHINGTON, Dec 20 (Reuters) - The government's decision to delay for some people the requirement to buy medical insurance under President Barack Obama's health law raised more doubts about the policy just days before an enrollment deadline.
Republican Party critics of the law known as Obamacare were emboldened by Thursday night's sudden rule change, which could further dampen enthusiasm for the president's signature domestic policy. In another technical setback on Friday for the main website for enrollment, HealthCare.gov, U.S. officials said it would be down for a few hours to repair an error.
The administration said people who have had their insurance plans canceled because of new standards under the healthcare law may be able to claim a "hardship exemption" to the requirement that Americans have coverage by March 31, or face a penalty.
While several million people have received policy cancellations, U.S. officials estimate that fewer than 500,000 would be affected by this delay in the so-called individual mandate. The mandate is a core part of the 2010 Affordable Care Act, commonly called Obamacare, that aims to provide coverage to millions of uninsured Americans.
The announcement also raises fairness questions, as it gives a subset of Americans relief from the requirement to buy insurance. The announcement was made shortly before the Dec. 23 deadline to sign up for insurance plans with coverage that starts on Jan. 1. The overall enrollment period ends March 31.
Republicans, who have long opposed the health law as an unwarranted expansion of the federal government that would raise insurance costs, seized on Thursday's change as the latest sign that the Democrats' policy is unworkable.
"It is the beginning of the end of the individual mandate," said Republican Senator Lindsey Graham.
The rocky rollout of the law since Oct. 1 has been embarrassing and politically damaging, helping push Obama's approval ratings to the lowest point of his presidency.
Part of the backlash came when millions of people received policy cancellation notices, forcing Obama to apologize for a promise he made that people who liked their insurance policies could keep them under the reforms.
U.S. officials are eager to get as many people to sign up as possible, especially after the disastrous Oct. 1 launch of HealthCare.gov. Obama said at a news conference on Friday that more than 500,000 people enrolled in plans via HealthCare.gov during the first three weeks of December.
So far, more than 1 million people have signed up for new coverage under Obamacare through state and federal marketplaces, officials said on Friday.
Insurance industry trade group, America's Health Insurance Plans, criticized the change that could divert more consumers away from the new plans offered under Obamacare.
"This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers," AHIP President and CEO Karen Ignagni said in a statement.
Legal experts said it was unclear whether the change would spawn successful legal challenges. Nicholas Bagley, law professor at University of Michigan, said he doubted individuals who are ineligible for the exemption could sue, claiming it was unfair that others received the break.
"You can't usually complain that someone else received a benefit that you didn't get and that caused you injury. That's not how courts typically rule."
Still, the change adds confusion for consumers so close to the Dec. 23 sign-up date, a deadline that could triple demand and strain enrollment systems.
The deadline has already been complicated by the decision from a handful of states who run their own insurance marketplaces to extend the sign-up deadline past the Dec. 23 date set by the federal government.
MNsure, the insurance marketplace in Minnesota, said on Friday that consumers would have until Dec. 31 to select a plan for coverage beginning Jan. 1.
In the law, there are 14 categories of "hardships" that can be used to get an exemption from the mandate to buy insurance, such as a recent eviction or bankruptcy.
But this is the first exemption prompted by the administration's botched rollout of the law after months of insistence that there would be no delays in implementing the individual mandate. The administration has already pushed back by one year the mandate for employers.
The change announced late Thursday was suggested by a group of Democratic senators, some of whom face difficult reelection campaigns in 2014.
Health and Human Services Secretary Kathleen Sebelius said in a letter to the senators that those people who receive the exemption will have the option to buy "catastrophic" insurance plans - cheaper insurance with a minimal coverage level that, under the law, is normally available only to people under the age of 30.
Senator Sherrod Brown, a Democrat from Ohio, said he worried about the move's impact on youth enrollment. The administration needs a large number of healthy, young Americans to sign up, to offset the expense of insuring sicker consumers.
"I am concerned about what happens to the universal pool of attracting people of all ages and various kinds of health status," he said outside the Senate on Friday.
(Additional reporting by Susan Heavey, Jackie Frank, Terry Baynes and Lewis Krauskopf; Writing by Karey Van Hall; Editing by Grant McCool)