Myth: Teflon-Coated Pans Are Dangerous
Reality: In 1999 the Environmental Protection Agency (EPA) began looking into the potential health risks of perfluorooctanoic acid (PFOA), a chemical linked to cancer in laboratory animals. It was found to be widespread in the blood of the general population and in the environment. It's used to make the fluoropolymers that give nonstick pots and pans their slippery properties. Although PFOA is used to manufacture the Teflon coating, it's only present in the coating in trace amounts, which is why the EPA does not advise people to discard these pans.
Scientists with the Environmental Working Group, a research and advocacy organization, say that Teflon pans left empty on a high stove setting (680° F and above) can release toxic fumes. DuPont, the maker of Teflon, claims that normal cooking temperatures aren't high enough to release toxic fumes, but as a precaution it advises that nonstick pans be used on low or medium heat and that dry or empty cookware not be left on a hot burner or in a hot oven.
If this isn't assurance enough, switch to nonstick alternatives, like seasoned cast iron or anodized aluminum. A flaking nonstick pan is not a PFOA concern, since that chemical is most prevalent as a gas. But you should toss the pan anyway. The flakes won't hurt you, but they shouldn't be consumed.
Bottom line: You can continue to use your nonstick skillet―just use it on low or medium heat and replace it with another type of pan when it's worn out.