[DoodleDawg]

So, say a standard office visit (Y) is $75 (X). Medicare, Medicaid will pay up to $75 for an office visit, so now each and every doctor charges that much for an office visit. When/if government raises that price, then so will the doctors.

One problem with your scenario is that if the standard office visit costs $75, insurance companies will negotiate a cost of $50 and Medicare will mandate a payment of $35. So the free market is already setting the price for two of them: the insurance companies, because doctors and insurance companies are free to negotiate a price agreeable to both, and for everyone else, since people are free to pick a doctor that charges the price that they are willing to pay.

[Alas Babylon!]

Not really, because X then is $35. What ever the government ultimately decides, whether that is completely arbitrary on their part, or done as an underhanded deal with some health insurer and his Capitol Hill crony, is the price they'll pay--which becomes the price. That is my point.