President Barack Obama was meeting top health insurers on Friday amid mounting concerns that the “fix” for his landmark health insurance plan had succeeded only in sowing more confusion.

The chief executives of insurance giants including Aetna, UnitedHealthcare and Wellpoint met Obama and senior aides a day after the president responded to a backlash over the Affordable Care Act (ACA) by announcing that insurers could continue offering policies that fall short of new standards for coverage. 

After millions of people with sub-standard plans started receiving cancellation notices, Obama admitted on Thursday he had “fumbled” the rollout of the healthcare reforms. The White House said insurers would be able to offer policyholders an extra year on plans that did not meet the ACA’s minimum standards. Previously people had until 15 December to find new policies that would cover them from the start of next year.

Insurers and state regulators are split on the move but all seem to agree that Obama’s volte face has further complicated the already troubled rollout. In a statement Aetna said: “We support efforts to allow people to keep what they have. However, we will need co-operation and expedited approval from state regulators to remove barriers that would make it difficult to make this change in such a short period of time. State regulators will need to allow us to update our policies and secure appropriate rates so we can get these plans back in the market.”

Insurers and some state officials are worried that the latest changes will further destabilise the implementation of Obamacare. In particular they worry that young people, who were the most likely to buy the cheap policies that do not meet the ACA’s standards, will have even less incentive to join the healthcare exchanges which are the centrepiece of the ACA.

The healthcare exchanges are an online marketplace where consumers can shop for health insurance. All 50 states will have their own marketplaces, some of which will be run by the federal government and some by individual states. If young, healthy people do not join the exchanges do not join, the pooled “risk” insured by the exchanges will rise and so will premiums.

“The entire underlying premise of the ACA – balancing costs of the young, old, sick and healthy – has been left adrift with this announcement,” said California Association of Health Plans president and CEO Patrick Johnston.

Jim Donelon, Louisiana’s insurance regulator and the president of the National Association of Insurance Commissioners said: “This decision continues different rules for different policies and threatens to undermine the new market, and may lead to higher premiums and market disruptions in 2014 and beyond.”

Donelon said he was particularly concerned about the way the reforms would impact premiums, the solvency of insurance companies, and the overall health of the marketplace. Allowing insurers to have different rules for different policies would be “detrimental to the overall market and result in higher premiums”, he said.

In addition he said it was unclear how the changes proposed by Obama could even be implemented. “In many states, cancellation notices have already gone out to policyholders and rates and plans have already been approved for 2014. Changing the rules through administrative action at this late date creates uncertainty and may not address the underlying issues,” he said.

Carl McDonald, insurance company analyst at Citigroup, wrote in a note to investors: “Extending all of the cancelled individual policies through 2014 may sound good in theory, but we believe it creates an enormous administrative burden for insurers. If this were happening back in June, it could theoretically be workable. However, the complexity of trying to un-cancel millions of cancelled individual policies with only six weeks left in the year is staggering. Insurers don’t have to extend the existing policies, but they now have the option. We suspect many insurers will choose not to avail themselves of this ‘opportunity’.” 

McDonald said the cancellation had left insurers with a lengthy “to-do list” and little time to do it. Among the issues insurers face they will now have to resubmit plans that were being cancelled for approval to state regulators. Before they can do that the insurers have to go back and calculate 2014 premium rates. In addition, insurers will have to reprogram computer systems in order to bring the cancelled policies back online. 

Obama’s announcement had little impact on the states that have already issued directives that allowed people to extend their existing insurance plans into 2014, including Arkansas and Utah.

But in other states the reaction has been more negative. California has the most successful state scheme. In November nearly 2,000 people a day enrolled for new coverage. “California needs to stay the course and transition people into the more comprehensive policies that meet the requirements of the Affordable Care Act,” said Johnston. The state has, however, allowed one million people who lost their insurance as a result of the implementation of the ACA to extend their policies into 2014.

Others are taking a harder line, including Washington state. Shortly after Obama announced his amnesty proposal, Washington state insurance commissioner Mike Kreidler said he would not allow insurance companies to extend policies in the state. 

“I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits today,” he said in a statement. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.”