AHIP seeks to explain health plan regs

The top trade group for health insurance companies is seeking to explain why some policies on the individual market are being canceled ahead of 2014.

In a memo to reporters, America's Health Insurance Plans (AHIP) said that many health plans purchased individually must be cancelled because they've been changed or purchased since 2010, the year ObamaCare was enacted.

The note from AHIP spells out the rules for health policies under the Affordable Care Act, which requires that plans created, changed or bought after 2010 meet minimum standards for coverage.

As a result, many people whose individual plans were altered or purchased after 2010 will receive a cancellation notice in the mail this fall, or sometime next year.

"The primary reason most policies are not grandfathered today is because people chose to change their policies or purchased new coverage after the law was enacted," AHIP wrote on Wednesday.

The memo comes amid debate over whether ObamaCare is to blame for policy cancellations on the individual health insurance market.

Republicans have seized on reports of mass cancellations as evidence that President Obama misled Americans when he said, "if you like your health plan, you will be able to keep your health plan" in 2009.

The Obama administration acknowledges that some people will see their health policies canceled as a result of the healthcare law, but notes that replacement coverage will contain richer benefits and more protections.

People with lower incomes will also qualify for tax credits under the healthcare law to help make their new plans more affordable. 

The White House noted that because of normal turnover in the insurance market, between 40 and 67 percent of customers would already not be able to keep their policies, regardless of the new standards.