This is socialism--plain and simple. Government should get the hell out of peoples lives.
I agree with you, in a perfect world. Unfortunately we don't live in that perfect world. As it is now, a hospital cannot refuse to offer necessary treatment to anyone, regardless of insurance or ability to pay. This means that the hospitals have a great deal of trouble recovering their bill from those people and have to defray the cost among those of us who have insurance and pay our bills.
That was a problem but not a huge one when healthcare expenses were lower, but as they go up it threatens to bankrupt the system. The largest jump in government spending is healthcare reimbursement.
There is something wrong with every option. My own personal opinion is that states should go back to operating low quality county hospitals and clinics, but I'm open to any suggestions.
Treating people is usually cheaper than waiting until the problem gets worse.