Same hypothesis applies to health care. Insurance causes providers to raise prices with confidence that it will get covered. Same applies to car repairs. A little scratch can cost 100s of dollars even though its labor and material is just a fraction because insurance has obligation to fill in the gap after co-payment.<p>While insurances have provision that they will not pay above some fixed globally agreed cost but this upper bound is high enough to generate huge margins while eliminating competition to reduce the prices. On the top of this there would always be upward pressure by outliers. I&#x27;m not sure what economic model can bring the price competition back while still allowing safety net as well as quality of service to consumers.