Why are insurer's able to reject people because of pre existing conditions?

[Anglo 409]

Health insurance, as are all insurances, life, auto, etc, is based on the odds that the company will have to pay a claim against the policy. The companies base their rates and willingness to insure on their study of the factors that go into their having to pay.

A preexisting condition nearly guarantees the company will have to pay, so they, being an enterprise in a free economy, choose not to insure certain preexisting conditions. Compare auto insurance, they reject people with a lot of accidents or a DUI. Life insurance companies reject people who have illnesses or are very old.

This is one of the things which would be changed in the Obama health plan. Companies would be forced to accept people with preexisting conditions. That is very good for people like your dad, however, to make up for those losses, the companies would have to raise their rates for other people. This is in the simplest sense the crux of the health care reform argument: should the many pay extra to pay for insurance for the few?