[talkingquickly]

Often (in the UK at least) if your insurance is provided as a benefit through a company rather than buying your policy directly, pre existing conditions will be covered even though the provider would normally exclude them if purchased by an individual.

[Ntrails]

Typically this is because they are able to make decent generalisations about the total risk pool they are insuring.

Offering 100 policies at £100 makes sense if you can make a decent estimate of the average annual payout being £90. The fact that one guy walks in to the policy knowing he'll cost £500 doesn't concern you.

Offering 1 policy at £100 without any exclusions means that you get adverse selection - a unusually high proportion of your clients would walk in knowing that they'll cost the £500.

In many countries where health insurance is obligatory, regulators have risk pooling between insurers to help negate selection effects (I think this was included in ObamaCare provision but not sure)

[ctz]

This observation likely explains my experience!