Comment by kmeisthax

The cost inflation started with pharmaceutical companies buying each other out and increasing the cost of drugs. Then the hospitals consolidated so they could get better negotiating power with pharmaceutical companies... and also, raise their prices to insurance companies. Who then also had to consolidate to preserve margin.

The idea that cost inflation is downstream of subsidy is... well, it's not entirely wrong, but it's also propaganda written by the people doing the inflation. The government can't distribute economically effective subsidies if industry is conspiring to eat the subsidy and hold the consumer hostage to get more. In an unconsolidated market, the underlying actual costs don't change beyond the increased demand. Consolidation transfers the subsidy premium away from the customers, who can't consolidate. You can't give a bullied kid more lunch money.