He is talking about classifying a illness as a pre-existing condition, only some states outlaw that. It’s a complicated issue, not one for the feds to screw with lightly.
Nah, he's talking about fraud cancellations. Preexisting condition exclusions are usually for a limited period (typically 90 days) and have been greatly reduced by HIPAA.
Fraud cancellations are open ended. You get sick, they pull the application. If you failed to disclose being treated for the condition in the past, it's 'adios amigo'. This is almost exclusively a situation involving individual (non-group) policies. They have the highest fraud potential, 'cause they're the ones an individual trying to get insurance after becoming sick tries to buy.
So, he's wrong in implying the issue occurs because of sickness, and he's also wrong in implying it's something an that impacts individuals with all forms of coverage. In other words, he's compounding overstatement with misstatement.