It was originally set up as an illness insurance system, as you say, to prevent people from losing their homes due to serious illness. Since illness strikes at a fairly consistent rate of 1% per day, it was easy to predict and costs easy to contain. And it worked! Slowly however, it changed from an illness system to a health care (preventive) system, which theoretically sounds great, but now, instead of covering 1% of the population at any one time, it covers 100% and costs are impossible to predict. Like many things that are good in theory, the health care system is far more difficult to put into practice, and very rapidly we have run into the situation where the majority of funds are spent on the "worried well", and once again the seriously-ill are being plunged into debt to receive needed treatment. 
You don't notice this, of course, until you become one of the 1%.