Can A payer can cancel a patient policy or deny payment on a claim if the patient failed to disclose a preexisting condition?

Under federal health reform rules, an insurer can cancel a policy only for fraud on the application. Omitting a pre-existing condition might be considered fraud, especially if the condition is significant.

The insurer could choose to continue the policy, but would have the right to deny claims for the pre-existing condition. If you had a 63-day gap in coverage, for example, the insurer could deny those claims for the first 12 months. After the 12 months ends, the insurer would have to start paying claims for all of your medical conditions.