In principle, there is no difference between this outcome and what HMOs like Kaiser do to this very day.
If there are a hundred HMOs and there is a treatment which cures a disease which ten of them choose not to cover, it still exists and you can pay for it out of pocket or do whatever it takes to switch to a different insurance company etc.
If everyone is on the same federal plan and the government chooses not to cover something, the provider isn't going to get enough business to continue operating and then they're gone and that treatment option is eliminated for everyone.
This is purely an on-paper difference. In practice, most Americans (where this conversation is relevant) don't actually have the ability to choose between an open market of health care providers. If they have access to it at all, its within the framework of what their workplace has negotiated for them, which may or may not be good. Certainly there is no individual recourse other than to choose between existing plans (which may all be from one provider).
So in that context, its actually exactly the same "systemic risk" problem only without the scrutiny of a general public. Plans are not public, and it is not unheard of for people with health issues to be quietly terminated to get them off plans. Pre-existing condition coverage is all over the map, with only the wealthiest citizens and workers having access to fair treatment. Even for someone like me, I struggle to get good health care when I run my own business because I am a cancer survivor.
So I think this concern you have is valid but the American system actually exacerbates it rather than protects against it. Both my partner and I face the auditing of unaccountable corporate "death panels" every time we go to the doctor.
So maybe you can tell me how if I suffer from this condition while being within the top percentile of earners in the US, the market approach has done anything to fix it. I have a history of successful Startup participation (and I've exited my own in a profitable fashion), but as I get older the health care situation is so bad, I'm forced out of participating in startups because their health coverage is so bad. Is this outcome better than what other public options have got?