Are there dangers in cancelling health insurance?

There can be potential serious adverse consequences associated with canceling health. If you cancel health insurance before replacement health insurance coverage is confirmed and already available, there may be a gap in your health insurance coverage.

First, there is no assurance that you will be able to obtain new health insurance. You might be denied coverage due to health conditions that developed prior to applying for the new insurance or plan, or go completely uncovered during the underwriting process. Second, even if you are accepted for subsequent health insurance coverage you could face a situation in which certain medical conditions that developed during the prior health insurance coverage are excluded from coverage under the new insurance as "preexisting conditions."

These problems may not exist if you are moving from one group insurance plan to another, as many group policies ignore pre-existing conditions if you move from a similar group health coverage within 30 days of prior coverage. A second exception will probably result in the same continuation of coverage mandated by HIPAA on and after January 1, 1998.