Two-year extension seen for canceled health plans

The Obama administration will allow a two-year extension for people whose individual health insurance policies don't comply with requirements of the new health care law. The decision will help defuse a politically difficult issue for Democrats during an election year.

A government official familiar with the policy said Wednesday that the administration has decided to extend for another two years a transition plan the White House announced last fall. The extension would be valid for policies issued up to Oct. 1, 2016. The official was not authorized to discuss the change on the record and spoke on condition of anonymity.

The cancellation of at least 4.7 million individual policies was the most politically damaging issue in the transition to a new insurance system under President Barack Obama's law.