> so if one provider tried to charge a price nobody who needed the treatment could afford, they would go out of business
Lets be realistic here. What happens is that most drugs are either actually manufactured overseas or at least can be shipped from overseas for pennies. However due to regulations and lobbying drug companies charge really high prices for the same drugs and they make sure it is illegal to import those drugs. In case the government itself was paying for these drugs it would be much harder for the companies to game the system like this and an individual would be protected from such predatory practices.
> So either we keep paying more and more taxes as a higher and higher percentage of people have the illness, to the point where we are just as badly off as if we each paid our own costs individually,
This is not true if you observe the tax rates in any countries with government funded healthcare. The taxes more or less remain the same but of course there are differences in the healthcare budget.
> This scheme also ignores the possibility of making the treatments cheaper.
Once again the healthcare costs in the US have actually risen quite significantly under the private system.
> This is not the obvious truth you appear to think it is. It is an extremely strong claim which is not at all clearly established by actual historical evidence.
Police and education it already is true even in the US. Even pension has significant regulation. The only reason healthcare is not is aggressive lobbying by private companies.