Why is it possible? You do not need health insurance when you are healthy. It makes no sense to spend a few thousand dollars per year to pay only a $20 co-payment instead of the full $120 for a few doctor's visits with petty health issues. The value of health insurance is in having coverage for a severe illness, regardless of whether it lasts a day or becomes an everyday burden to the end of our days.

In other words, the most essential is not the coverage for the next 12 months, but for the catastrophic event of us getting an ongoing health issue.

The mentioned by you diabetes is a good example. In the United States, it results primarily from an unhealthy lifestyle. Insurance companies are eager to collect the provisions from expensive medications for insured people with diabetes. They drop those who do not have a coverage.

In my approach, the health insurance companies would be interested in identifying individuals with a risk of getting diabetes and nudging them to adjust their habits.

We do not need the government to make it work.