Why do insurance companies insist on denying coverage to individuals with pre existing conditions?

Because they don't care at all about your health....only their bottom line.

In addition, there is a theory of behavior called moral hazard. This suggests that when people with pre-existing conditions are covered by insurance allowed to use it for those conditions, they do so and immediately upon being cured/treated, cancel insurance. A perfect example is a woman whop ghets pregnant, gets insurance that covers the pregnancy, goes through all the well-baby/pre-birth checkups, does the delivery thing, gets the baby checked out for the first month to ensure health, and then drops coverage. This costs the health insurance company thousands of dollars while the company only gets a few hundred, maybe $2K in premiums (never enough to cover expenses).

In case you are wondering whether this happens, checkout the health mandate passed in Washington state that required insurance companies to cover pre-existing conditions with no waiting period. The moral hazard was so bad, the system went from 18 insurance companies to 3 in just under 2 years because they were losing money and the last two filed to pull out of the state before the law got reversed.

Because it is a business transaction. If an prospective client comes to a company and says, "Hey, I'll pay you $300 a month if you pay my potential medical bills of $50,000 for my preexisting conditions." Do you think a business is going to want that? Profits keeps the companies strong allowing money to be available for claims of existing clients.

Guaranteed issue insurance always results in extremely high premiums.

I understand the need/want for guaranteed issue as I have a medical condition that private carriers would deny. However, I also understand the need for our government to remain small and out of my life.

***Group health insurance will cover pre-ex after 12-24 months if you don't have prior creditable coverage. Also for individual insurance some states offer plans to people denied coverage with regular carriers.

Because they are a for profit business and they have a responsibility to their shareholders to make money. Sick people cost the insurance company money. There ideal is to have healthy people pay premiums and never use their insurance.

That is the flaw in the for-profit system. They will never change unless they are made to by government regulation.

One issue though is that it is unfair if some people don't bother to get insurance until they get very ill or hurt and need it. That isn't fair to every one else. One possible remedy is to make every one get minimum insurance just like with auto insurance- at least in Ca your auto registration gets revoked if you don't have insurance.

The entire concept of insurance is the sharing of risk. If an insurance company is required to accept people who are going to cost more, then everyone's premiums will have to increase. What part of this is difficult to understand?

And insurance companies deny coverage on auto insurance for vehicles that are already damaged. Think about it.

Because (for now) they can get away with it. They are currently spending enormous sums of money riling up the ignorant people who still refuse to believe the glaring evidence that the GOP is a bloated corporate lackey intent on enslaving America for profit, hoping that these people will embolden their pocket-politicians who have lately been brow beaten by logic in every debate. If they get their way and end health care reform you can expect these tactics to continue indefinitely.

Somewhere in a windowless room there's an actuary sitting under a flickering fluorescent light who calculated that preexisting conditions most often cause the insurance company to lose money.

Because of the expense. Insurance companies formulate their coverage based on risk. It is a rogue industry, with billions in assets, focused on profits, not people.

idk. my mom's employer's insurance company (blue cross blue shield or something) offers excellent healthcare coverage, which covers even individuals with pre-existing conditions [such as myself]. so not all of them deny individuals with pre-existing conditions. but insurance companies don't make money (or as much money, as those without) off of individuals with pre-existing conditions. so by denying those with pre-existing conditions, they're increasing their profit margin substantially.

which of course leaves the rest of us f*cked...

Because they are insurance companies. Insurance. Insurance is against future risks. Will you please insure my house on the next day after it burned to the ground?