That sounds like a singularly bad idea, for the reasons you cite. If she has insurance, she should hang on to it.

Also, does the insurance she bought for her trip include evacuation?

Given your lack of detailed knowledge, and the actual extent of your daughter's insurance, I would have to agree with thursdaysd on this one.

This is corny and trite, but penny wise and pound foolish....

My medical insurance in Australia allows me to suspend it for when I go overseas without penalty. I always buy trip insurance

columbusdirect.com backpackers insurance works well in this situation. Unless your daughter has a major health issue
you CAN cancel but there is risk as you point out if she contracts a health problem abroad.Insurance
for healthy children is cheap I personally would
NOT cancel the US health insurance I did not when my son's
band toured europe for the summer I just double covered him it was just $30/mo or so. I felt the risk outweighed the small financial savings.

Happy deciding PM if needed many do.

www.mnui.com has some nice health insurance options as well
that would work well for her if current insurance premiums are very high.Another option would be not to cancel but shift her to a very low cost high deductible US policy to save premium.

ehealthinsurance.com

I have done that personally for my wife and myself when abroad
for extended periods in the past.

Why doesn't she call her insurance and see what they say? Each insurance company and plan is different and they can give her information specific to her plan.

When I've been changing jobs and waiting for insurance coverage to start again I had short term insurance. Since I had constant insurance coverage, even though it was with different companies, pre-existing conditions wasn't a concern as I had kept coverage of some kind. Her insurance may consider the travel medical insurance enough for that purpose.

There's also the question of how expensive is her plan. If it's fairly cheap, keep it just so there aren't any issues or questions.

If she suspends her U.S. health policy while traveling in Israel (which may or may not be possible), she needs to be absolutely sure that the new insurance is primary and not secondary. Many travel policies specify secondary coverage, and she may have problems getting proper reimbursements if she doesn't have primary insurance coverage back home.

If it's a COBRA plan, I don't believe it can be stopped.

I am very surprised to read that maintaining insurance coverage with company A does away with the pre-existing condition problem when applying to company B. I'd like to see some proof. Of course, the issue is about to go away when the Affordable Care Act goes fully into force.

Thanks for your responses. Thankfully, my daughter has decided to keep her ins as is. Her deductible is already pretty high.
Hopefully she won't be in need of it, but you never know!

I was just reading about the Australian couple who got a million dollar bill from their trip to Canada when the wife went in to labour early and bubs needed 90 days in special care @ approx $8000 a day. Their travel insurance didn't cover them.