Health insurers cannot drop people that get sick.  They do have the legal right in most states to rescind coverage if an applicant misrepresented his or her health on the application for coverage, but only if the correct information would have caused the insurer to charge a higher premium or decline the application.  Any problems on this dimension could be readily fixed at the state or federal level.

Virtually all individual and small group health insurance policies are guaranteed renewable at rates that do not reflect the health status of the policyholder. Coverage cannot be cancelled.  The rate cannot be jacked up because someone gets sick.

Some people have medical claims high enough to exceed their policies lifetime limits.  The frequency of cases where this occurs is very small.  Any problems on this dimension could be readily fixed at the state or federal level.

Most people who lose their jobs and employer health coverage are entitled to extend their coverage for many months under federal law.  They have to pay a premium of 102 percent of the employer’s cost.  The stimulus bill substantially reduced the premium for those who lost jobs during the current recession.  If people continue coverage and obtain a new job with coverage, the new coverage generally cannot exclude pre-existing conditions.