Bonddad on daily kos explains the perverse results that the profit motive provides in the health insurance market: put simply, insurance co's make money by collecting premiums and earning money on the float, not by paying claims.  It may well be economically more feasible to deny coverage than to provide treatment.

When you take into account the present legal environment, the incentives are actually far worse than they appear in his article, as the Supreme Court through ERISA preemption (which protects HMOs from state law liability for negligence) and its recent punitive damage awards cases provide large incentives to cheat.  I would commend those interested to read about the insurer's practices in STATE FARM MUT. AUTOMOBILE INS. CO.V. CAMPBELL (01-1289) 538 U.S. 408, in particular the manner in which State Farm not only created a conscious policy to deny coverage to its automobile insureds,  but punished those employees that refused to engage in the company practices.  There, State farm got socked with $145 million in punitives, and $1 million in actuals.  The Court has now come up with a ratio of about 9 to 1 for punitive damages. It's even more troubling that hthe recent Philip Morris decision introduced elements of substantive due process into this area, as the prior cases like State Farm were procedural (e.g, no notice of liability to the defendant).  Combine (a) the natural profit motive with (b) these cases and (c) recently enacted tougher class certifications standards, and you'll eventually get the following approach to coverage decisions:

If you're thinking about covering someone for an illness, and it's going to be expensive, look at the pool.  The insurer may collect premiums for coverage it has no intention of honoring.  If less than 10% contest these decisions, it's a no-brainer; the corporations interest is in denial. If the coverage is even remotely fuzzy, then it denies.  To protect itself from really bad facts, all it has to do is pay some of those claims.  It's still better off, despite not having honored its obligations. Furthermore, even if you lose, if the cost of recovery via litigation is more than the amount, then  no one's going to take the case as it would be economically irrational to do so.