How can insurance companies not refuse insurance for people with pre existing conditions?

Nathan: How can insurance companies not refuse insurance for people with pre existing conditions?
Under Obama’s health plan, insurance can’t be refused because of a pre existing condition (at least that’s what I heard). How would that work? Why would anyone get insurance before getting sick? How would that not bankrupt the companies?

Answers and Views:

Answer by Judy
Many usually healthy people are likely to just pay the fine, since it’s reportedly small, and then sign up only when they need it. This would make premiums very high for the people who are signed up. You have analyzed the situation correctly.

It’s congress’s plan, by the way.

Answer by jlf
In theory, insurance will become “compulsory” so everyone would already be covered. In fact, it will mean higher insurance premiums.

Answer by mbrcatz
Only stupid people would buy insurance before they need it. It would bankrupt companies, or more likely, drive prices through the roof.

Just like, why would you buy a lottery ticket good for the drawing, BEFORE you know what the numbers are, if you can also buy it AFTER, for those exact numbers?!?

This concept is called “adverse selection”, and the politicians have been working VERY HARD to ignore it.