NPR reports that rescission, "where health insurance companies cancel policies after people run up heavy bills" is one of the points of agreement among lawmakers of both parties in health care reform as evidenced by its inclusion in comments at last week's health care summit.
"At the summit, President Obama said insurance companies practice rescissions all the time. … Rescission is, at least technically, illegal, except in cases where people deliberately lie in order to hide an expensive condition from their insurer, says Karen Pollitz of Georgetown University."
According to NPR, people with employer-sponsored insurance don't need to worry about recission, but that "people who buy their own policies, or are in a small employee group, who have to fill out that [health history] form and who have to worry."
America's Health Insurance Plans, the largest insurer trade group, says that rescissions are "disruptive, cause hardship to families and should be avoided," but that requiring all people to carry health coverage would solve the problem. Some expect a bill speaking to outlawing rescission this year after lawmakers agreed on its harm at the health summit (Silberner, 3/1).