The Affordable Care Act (also known as Obamacare) is creating an incentive for health insurers to find ways to discourage the sickest patients from joining a health insurer’s plan. In a recent article, Dr. Merrill Matthews explains why this is happening.

To understand this, let’s look at a normal insurance market. Here an insurer is able to reject an applicant when an insurable event has already occurred. Dr. Matthews says we should imagine this hypothetical phone call from a homeowner and an insurance agent. “Hey, Joe, you know the homeowners policy you tried to sell me last week and I refused? Well, my house in on fire; please send me the application immediately.”

I think we all know what the insurance agent would say. Insurance is for what might happen in the future. It’s not to cover what has happened in the past. If we forced home and property insurers to accept an application from someone whose home was burning, it would distort (and probably even ruin) the insurance market.

This is what Obamacare is doing to the market right now. The Affordable Care Act has a provision for guaranteed issue. It requires health insurers to accept any applicant. It also prohibited health insurers from charging more for a preexisting medical condition regardless of how much it costs.

Perhaps you can now see why there has been an outcry about how the sickest people are being treated. There is a significant financial incentive to health insurers to look for subtle ways to discriminate against the sick.

More than 300 patient groups have written to the Department of Health and Human Services claiming that is what is happening. They point to some health insurers that charge extraordinarily high copays for some expensive prescription drugs. These and other tactics are being used to drive sick patients from a particular policy.

Obamacare was promoted as a way to help the uninsured and sickest members of society. It seems to be creating an incentive to do just the opposite.