There are two situations with chronic health problems - one where a person has been on a health insurance plan and paying it, and one where they haven't.
In the first case, their payments to the insurer were the expected value of their health, essentially - if they had a 1% chance of getting cancer that cost $100,000 to treat, they would be paying roughly $1,000 for the insurance - simplified of course, but it's the basic premise. So when they happen to be in the 1%, it doesn't matter, because that's what they paid for, and yes, it fits the insurance model.
When someone hasn't had insurance and has a chronic condition, though, it's more like asking someone to insurance a house that has already been washed away by a flood, and is built three feet from the water. There is a 100% chance that the insurer will have to pay more than they take in from the customer. If the insurer is forced to take these people in, the affected person must be subsidized by the rest of the insured. They are not paying the expected value of the cost of their care, because the probability is such that they *cannot* pay the expected value of their care. This is no longer insurance, it is charity. The closest working model that still looks like insurance would be, essentially, "insurance insurance" that everyone has to start buying to pay for the ability to continue buying insurance after you would stop being eligible for it. But again, that doesn't work for the people who haven't been paying that fee to begin with.
My point being, trying to buy insurance *after* you get an expensive disease is the same as buying car insurance after you crash, house insurance after it burns down, or life insurance after you die. Insurance is about balancing possible future payments, not certain ones.