That's exactly the reason. If insurance went back to it's origins and covered only hospital stays ... or even just cover catastrophic care ... the cost of medicine would plummet, IMO.
BC/BS has been one of the big backers in socialized healthcare. In short they are as much as responsible for driving up cost as any one especially when the HMO Acts became law which put the nail in the coffin of affordable true insurance. BC/BS using HMO’s rather than private insurance people could once afford took over a good chunk of healthcare. My last employer went from BC/BS Hey Moe to self insured covering preventive care and with a $500 yearly deductible covered 80% of all else. We got out of pocket expenses paid back in days not weeks. Our company saved a fortune.