It’s cheaper to pay cash than use insurance.

Yes, for most people, in most years. But the cost of health care tends to be very, very unevenly distributed. A person might see medical bills of less than $1000 per year for 20 years and then get a single $1,000,000 year. So at that point, it's an annualized cost of $50,000 per year, even if most years it's about $1,000. Some estimates are that 10-30% of all medical spending in the US is in the last year of life.

Many believe that because of this distribution, health insurance should primarily be a catastrophic care model where most people pay a premium that doesn't cover anything for the first few thousand, then covers a percentage of the cost up to the out of pocket maximum of like $15,000 or so for a family, but does cover everything after that. For a typical household, being able to predict annual healthcare expenses for the entire year is very useful.

And personally, I'm pretty sympathetic to this catastrophic care model as a short term transition to an all payer model that looks like Switzerland's system (private insurance, private providers, mandatory coverage, strict price controls, and subsidies for anyone who can't afford the normal premiums).