While the American healthcare system is known as a free market, in reality, the government controls a portion of healthcare spending closer to that of communist Cuba than to that of the average OECD nation. At the Cato Institute, Michael F. Cannon explains:

Many critiques of US health care begin with the assumption that, as The Economist put it, the United States is “one of the only developed countries where health care is mostly left to the free market.” In truth, among wealthy nations, the United States may have one of the least-free health care markets—and it’s making health care less universal.

In a free market, the government would control 0 percent of health spending. Yet the Organization for Economic Cooperation and Development (OECD) reports that in the United States, the government controls 84 percent of health spending. That’s a larger share than in 27 out of 38 OECD-member nations, including the United Kingdom (83 percent) and Canada (73 percent), each of which has an explicitly socialized health care system. When it comes to government control of health spending, the United States is closer to communist Cuba (89 percent) than the average OECD nation (75 percent).

The idea that the US health sector has “largely unregulated prices,” as the Los Angeles Times has reported, is also incorrect. Direct government price-setting, price floors, and price ceilings determine prices for more than half of US health spending, including virtually all health insurance premiums.

Many think that if prices are excessive, they must be market prices. But in the United States, government price-setting pushes health care prices higher than they would be in a free market. On top of that, the government pushes all medical prices and health insurance premiums upward through tax laws and regulations mandating excessive levels of health insurance.

Read more here.