I think the provider side will be the breaking point. You'll start seeing hospitals stop accepting insurance, especially if Medicare goes away, and everything will be cash based. Things will be expensive until hospitals have cut enough fat/figured out the real cost of everything, and this will be a dangerous time to have an illness.
Whether this will usher in a free market utopia remains to be seen, but I think the health insurance industry is going to collapse under the weight of its own greed.
I would prob say the hospital knows the optimal price already. It might not be 100% applicable to the US but here is an example in Ireland, if I go to the hospital without any referral or by not being brought in an ambulance which would make it free, I have to pay. The funny thing is that they ask you beforehand if you have insurance and substantially increase the price of an overnight stay, etc if you do, to which point insurers are suggesting customers to withhold such a fact and lower the bill.
With the majority of payments getting approved, why would providers stop accepting insurance?
If Medicare goes away, much of the healthcare system will simply implode rather than getting more expensive. Looking it up, the system my hospital is part of gets 36% of revenues from Medicare. I expect my hospital is slightly higher than that.
Whether this will usher in a free market utopia remains to be seen, but I think the health insurance industry is going to collapse under the weight of its own greed.