Trust me I hate insurance companies. However I hate the iron fist of the government more. Everything the government touches, either goes bankrupt or fails. There is no way I want them involved, in any way, with my health care.
I have a friend who is in the 15% who can't afford insurance, but makes too much money to qualify for Medicade. He recently had a major injury requiring surgery. The bill came in and it was pretty large. When he talked to the doctor and explained his lack of insurance and the fact he was paying cash, the doctor and hospital lowered his cost just like the example you gave above. All of this solved without a single insurance company or government agency involved.
I still believe, people taking care of themselves is a better system than the government taking care of them.