Chlorine is often placed into water supplies to clean and disinfect the supply from bacteria. While most people are unaffected by chlorine, there have been reported cases of sickness and death related to Chlorine. Some of the illnesses have not from the chlorine itself but from its interaction with biological debris that comes from run off.
Adverse Effects of Chlorine
Chlorine has been linked to dryness of the skin and asthma like conditions. Even brief exposure to chlorinated water has brought on exercise-induced asthma. In certain studies, the level of chlorine in the pool was unrelated to the asthma, so you can be under-chlorinating your pool and still get the same health effects. There have been other reported incidents of consuming chlorination-by-products (CBP). The studies are still in early stages but high levels of CBP in city water have been correlated to higher birthing problems for pregnant women.
Current Status of Chlorine
Medical research is still underway to examine chlorine's interaction with humans. However, it should be noted that chlorinated water does kill bacteria and countless numbers of people have been saved from potentially hazardous bacteria. The Environmental Protection Agency (EPA) recently enacted regulation to lower CBP in water supplies.