“The pre-existing conditions clause means it’s welfare, not insurance. Insurance is where the insurance company can safely bet you won’t get sick.”
I would say, rather, that “insurance” means the insurance co can calculate your expected cost.
https://aheblog.com/2016/11/24/doing-the-math-on-the-distribution-of-healthcare-expenditures-a-pareto-like-distribution-is-inevitable/
High cost patients (pre-existing) have a cost distribution that is approximately power law (Pareto) with alpha<2.
For such distributions the variance is not finite and the usual probability and expected value estimates do not apply.
Trying to cost insurance products for preexisting conditions isn’t really conventional insurance. It is more like selling options that pay off in a stock market crash.
Which is why I favour pulling the pre-existing out of the insurance pools entirely and putting them on medicare/medicaid and charging them a fraction of income.
And letting the insurance co’s compete over the remaining policyholders where normal insurance actually applies.
By placing them on Medicaid you are also in favor of them losing their home, because you lose your home or any other assets to the government. Is that okay with you? So - sick people get to lose everything - Pareto's Law does not apply because you are suggesting that 100% of sick people with pre existing conditions should lose everything.
Guess your planning on never getting sick, losing your insurance then going on Medicaid and then losing all your assets - the American Dream.
Like I said people choose unassisted suicide by not getting treated because they don't want their families to lose everything.
But making sure premiums for the rest are lower is worth the price.
This is why pools funded by taxpayers are far superior - because people don't lose all their assets just because they got really sick.