I had an experience similar to yours. About 20 years ago my wife had an extremely expensive but essentially trivial emergency room experience. The bill was so outrageous I called my insurance company to inform them just what had happened. They were neither alarmed nor shared my outrage–which puzzled me since, after all, they were paying the bill. After a little thought, I realized why; next year they would be able to justify higher premiums. Even if margin percentage remained the same, their profits would still go up in absolute terms. They had no incentive to reduce costs, because I had no alternative but to buy insurance– if I could afford it.

Free markets can certainly reduce prices, and probably improve services. It would likely eliminate fraud as well. But there would be other costs. Dentistry works this way, although its not a fair example because people rarely die from bad teeth, and pain can usually be stopped by a simple extraction, a relatively inexpensive procedure, even though there may be preferable but more costly alternatives available.

Veterinary medicine also works this way, the prices are reasonable and the care is excellent and widely accessible, there is plenty of financial incentive for research and improvement and even insurance plays a role. But if you can’t afford, or don’t want, to treat your pets or livestock, you can just have them put down. Or if that isn’t cost-effective, you can always let them suffer until they die.

I would really like a sailboat. I can even afford one. What I cannot afford, given my other responsibilities and how I choose to prepare for them, is the maintenance and upkeep on top of the initial cost. So I don’t own a sailboat. That’s a free market.

There is no free market when your kid can barely breathe through his asthma, or your wife has a lump on her breast.