Can Health Insurance Companies Cancel Your Policy If You Get Sick After it Is Issued?

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Most people sign up for or purchase health insurance policies with the understanding that if they get sick, their insurance company will pay a significant portion of the costs. One fear many people have is that their health insurance company could drop them if they become sick -- especially if they face a long-term illness.

Group Insurance

Group insurance, such as plans signed up for through an employer, cannot drop you as long as they continue to serve the group you signed up for the policy under and you continue to meet the qualifications -- such as being employed by company that has purchased the group policy. If you lose your employment, you can continue to receive coverage -- even if you are sick -- under the COBRA program, but you must pay the full premiums. HIPAA laws offer further guarantees that cannot you be dropped from group health insurance simply for becoming sick, but you can lose coverage if you lose employment and fail to pay premiums.

Private or Purchased from the Insurance Exchanges

Under the provisions of the Affordable Care Act, commonly known as Obamacare, health insurance companies cannot drop your coverage if you become sick after purchasing coverage. As long as the health insurance company stays in business, and you pay your premiums, you cannot be dropped from its coverage. Additional measures to the law ensure that you will be able to find new health insurance, despite any illness you may have, if your insurance company goes out of business.