|Every state is different in regulation of Individual health insurance. Most states however have very little legislation on rates.
Insurance companies will review your medical history & prescription usage and do one of the following;
1.) Raise rates
2.) Put permanent exclusions on certain pre-existing conditions
3.) Decline you all together
This ultimately keeps the people with more severe medical conditions off these types of plans and enables only the healthier people on them. Consequently because of this; rates are much lower (as insurance companies use your actual claims to derive what the rates are).