What I’ve found is that a modern novelist choosing to work in the “horror” genre is fairly rare. Most modern novelists seems to staty away from the label, even though what they’re writing is almost definitely horror of one variety or another. It depends what “horror” you mean, really. However, if you’re looking for some scary stuff, here’s a few. Bear in mind that some of these are not necessarily by “horror” novelists per se.
David Searcy’s Ordinary Horror is definitely one of the creepiest books I’ve read in a while. Bear in mind that this is very psychological horror, not really supernatural monster horror (though it might be…).
Neil Gaiman writes some good horror-ish stuff. His story in the last issue of the “Hellraiser” comic series was the best one of the whole run, and his new young-adult novel Coraline has some exceptionally scary moments.
Stephen King never scared me much in general, though his book Gerald’s Game had a part that made me very reluctant to turn out the lights when I finished it at 2 AM.
James Lasdun’s The Horned Man is another good example of modern psychological horror. It’s not boogeyman-scary, but it definitely kept me jumpy while I was reading it.
Funny you mention Dan Simmons… I never saw him as much of a horror novelist. He’s written a few good horror novels, but most of them aren’t good because they’re scary. They’re good because they’re well-written, they tell a good story, and he does some genre-twisting tricks in them. He’s a good writer in general, and I’ll read anythng he writes, but he’s usually not very scary. That being said, there are some powerfully frightening images in his recent novel A Winter Haunting, which is a sequel to Summer of Night. The first book wasn’t very scary, in my opinion, while the second one really had some nice creepy moments.
There are more, but that’s a good list to start with. To me, a truly scary book is pretty hard to come by. I can think of only a few that really do it for me… Shirley Jackson’s The Haunting of Hill House, for example, or some of Lovecraft’s work. They could hardly be considered “modern,” however.