[ModernMech]

Okay, now we're getting somewhere. Let's stay with the example of asthma. I pay a premium based on that condition, and the expectation that maybe one day I'll get cancer. Sure, I can understand that.

So then I get cancer, and the bill is more than I can afford. Where does the money come from? Not my premiums, because I've only been a subscriber for 3 months, and my premiums won't even cover the cost of treatment for a week of cancer treatment. If someone else isn't paying for me, and I'm not paying for me, who is paying for my treatment?

[maxerickson]

Other people do pay for the cancer treatment. Make up a pool of, say, 1000 people. Make up a cancer rate of say, 5/1000. Make up an asthma rate of say, 50/1000.

The people that are going to get cancer are unknown, but the whole group is willing to pay 0.5% of the cost of cancer treatment for a contract that covers 100% of the cost.

The 950 people that know they don't need expensive asthma treatment don't really want to pay for contracts that will cover expensive asthma treatment, so (in a pure insurance market) either the cost has to be included in the contracts for the 50 that do have it or the treatment can be excluded from the contracts.