The health-reform law caps how much insurers can spend on expenses and take for profits. Starting next year, health plans will have a regulated "floor" on their medical-loss ratios, which is the amount of revenue they spend on medical claims. Insurers can only spend 20% of their premiums on running their plans if they offer policies directly to consumers or to small employers. The spending cap is 15% for policies sold to large employers.If the insurers are capped in how much they can spend in administrative costs, they will likely not be renewing policies without substantial increases in premiums.
This regulation is going to have its biggest impact on insurance sold directly to consumers—what's referred to as the "individual market." These policies cost more to market. They also have higher medical costs, owing partly to selection by less healthy consumers.
Finally, individual policies have high start-up costs. If insurers cannot spend more of their revenue getting plans on track, fewer new policies will be offered.
So while the insurer may not be able to cancel your policy outright, they will have no choice but to increase your premium so that you drop the policy because it is too expensive.
So another Obama promise bites the dust--not that I am surprised.