For the free market to reach equilibrium, there are 4 assumptions and 4 conditions you need to be true. If you're able to achieve all of those, then you get a free and fair market. However heathcare pretty much violates all of those assumptions. For example, you can't assume people will act rationally in the healthcare market, because they often face life and death situations. There's no perfect knowledge of the product/service they purchase, because you need at least 10 years of training to be a medical doctor. Costs don't say the same on volume - insurance is always cheaper with larger risk pools. Because you have violations on everything required for the free market, you need either a massive system of regulations, or you use something other than the free market. For further reading, look up Kenneth Arrow.