The absence of the private sector doesn't become fully apparent until the state—whether because of financial problems or a simply change of the political winds--ceases to provide the service. Then it's the families who were relying on government's promises who suffer.
This dynamic doesn't just come into play in the health care arena: whether it’s welfare and food bank programs or job training and education, when the state steps in to provide a service, the effects ripple through the private sector. Charities that were providing similar services are no longer needed. Individuals who had been donating to nonprofits believe their sacrifice is no longer necessary, and come to believe that it's the job of government—not good neighbors—to take care of those in need.
No one doubts these services need to be provided; the question is whether the government is the best vehicle to do the job. Too often, government programs end up unnecessarily costly, duplicative, or offering poor quality service. And when a budget crisis hits, it's inevitable that policymakers have to make decisions that cause real hardship for those who have come to depend on government.
The small silver-lining to the current budget crises might be that citizens learn an important lesson about the unintended consequences of government programs. State services create real costs, not just in terms of tax dollars, but in crowding out the private sector and leaving citizens dependent on government. Better not to create such programs, to keep government limited to the specific functions for which it was intended, and to protect civil society. It turns out that it's often far more compassionate not to create such a program, than to create one that leaves so many dependent on the whims of politicians.