When healthy people drop their health insurance, leaving only sicker people to buy insurance, this is called:

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This is called adverse selection, as it leads to a disproportionate number of higher-risk individuals in the insurance pool, causing premiums to rise for everyone. Moral hazard refers to the phenomenon where individuals with insurance may take on more risk than they would without it, while an efficient free market outcome would require equal access to insurance for all individuals, which is not the case here. Maximizing profits may be a goal for insurance companies, but dropping coverage for healthy individuals is not necessarily the most effective way to do this.

When Healthy People Drop Their Health Insurance, Leaving Only Sicker