Insures would be insane to do this for many reasons, the main one being the one you stated. They can't break the law just because Obama tells them to and he sure wouldn't cover their backs when the lawbreaking came back to bite them.
Another reason is Estoppel. Even if an insurer wanted to go beyond the contractual limit of a policy, it would be very dangerous to do so. Once a limitation is waived in one circumstance, the insurer might then be estopped -- barred -- from enforcing the same limitation in a later case. But given that Obama is intentionally wrecking the system so he can completely replace it, that makes perfect sense...
Under this theory, not only could people apply for insurance at hospital admission to get coverage, but they could apply for insurance AFTER care and then demand that the insurer cover it.
Insurers need to fight back with all of the legal talent they have and nail this to the wall.