But no, a free market cannot cause harm. Someone may be harmed while dealing and trading via the free market, but that is entirely his or her own responsibility, both in cause and recourse.
Thanks for the clarification.
The first gigantic, obvious answer is "SLAVERY." Slavery existed because it's far cheaper to import someone to be a permanent, wageless worker than it is to hire someone. Is
slavery the slave's responsibility for being hurt by dealing with a free market? Of course not.
But that's too extreme, and also not entirely relevant to health insurance. So here goes.
http://www.msnbc.msn.com/id/33198459/ns/health-health_care/In 2006, attorney Jody Neal-Post tried to get health insurance but was rejected because of treatment — counseling and Valium — she received following a domestic-abuse incident. She says the insurer told her that her medical history made her a high risk, more likely to end up in the emergency room or require additional care.
This woman was denied health insurance because her ex-husband beat the crap out of her. That made her "high-risk." Eight states do not have a law preventing this practice - using abuse history as a reason for denying coverage. A victim of a crime is being punished by the free market.
http://articles.latimes.com/2009/jun/17/business/fi-rescind17Blue Cross of California encouraged employees through performance evaluations to cancel the health insurance policies of individuals with expensive illnesses, Rep. Bart Stupak (D-Mich.) charged at the start of a congressional hearing today on the controversial practice known as rescission.
Encouraging dropping policies for sick people. They have people paid to pore over legalese that only a lawyer can truly dissect and find reasons to drop coverage for the sick. They don't apply this process to the profitable clients. This is not an isolated incident, I recall an article about another company offering bonuses to those who exceed a rescission quota.
http://www.walletpop.com/blog/2009/09/02/think-youve-got-health-insurance-better-double-check-and-be/This woman had a $30,000 claim
retroactively denied and her policy canceled because she failed to disclose a back that was occasionally sore after playing soccer. This was a "pre-existing condition." (guess I should stop exercising) The claim was for some cysts on her scalp being removed.
Health insurance companies do not need to review your medical history at the time the policy is issued. The fact that they can collect premiums on a policy they do not intend to actually provide is harmful. You think you're covered, but they can drop the policy
after a claim is made, leaving you with the medical bills and no right to collect your premiums back. Worse: once this happens to you, you're going to have an extremely hard time getting coverage from any other company. After all, you have a pre-existing condition on record!
http://www.huffingtonpost.com/2009/09/18/in-health-care-number-of_n_291881.htmlData on how often insurance claims are denied -- and for what reasons -- is collected and analyzed by the insurance companies themselves. But except in California, the companies aren't required to provide those records to any state or federal agency. "The number is knowable, but not known by regulators or policy makers or patients," Pollitz said.
A citizen is unable to easily judge the behavior of the insurance company they sign a contract with, because nothing forces that company to reveal information about those practices. The free market would function better if people had foreknowledge of how their policy would be handled.
http://www.cnn.com/2009/POLITICS/06/19/begala.health.care/"Peggy Raddatz, whose brother Otto Raddatz lost his insurance coverage right before he was scheduled to receive an expensive stem-cell transplant to treat his lymphoma. Why? Because Fortis Insurance Company discovered his doctor had found gall stones and an aneurysm on a CT scan -- conditions that had nothing to do with his cancer, that never bothered him and that he wasn't even aware of.
Dropping coverage due to unrelated illnesses that the patient isn't even aware of. An individual wishing to avoid this pretty much needs precognition or their own medical degree.
ConclusionThe free market works, but it requires the public have access to the information they need to make a decision about what they're purchasing. Since health insurance operates on a "what if," future basis, it can be extremely difficult to judge the quality of your plan until it's too late. Providing such information goes against the best interests of your health insurance company, so they simply will not do it unless forced to do so.
You may think these are anecdotal cases, not representative of the industry as a whole, but you can spend literally all day reading about cases like these. The very fact that they can legally do this sort of thing shows that they are capable of causing harm when it suits their best interests - the profit margin. Health insurance workers aren't bad people, the company just has an incentive to not provide you with care when you need it.
edit: And I haven't even touched on how insurance companies "get between you and your doctor" yet!