This is basically how the notorious British National Health Service (NHS) operates. I say notorious because the National Health Service is famous for running a strict rationing system, with the government determining who gets what health care and when, and deciding who gets told when its time to go home and die. In my 2011 book, I suggested that Britain’s National Health Service is probably responsible for the deaths of more British subjects than the Nazis and Adolf Hitler. But a thorough study would be necessary to document that.
The NHS does not do this out of malevolence. It does it because when the government is dispensing free health care, there must be some means to control costs. With no market prices, incentives, or competition to control costs, the only choice is for the government to decide when the money train stops at the station to let some off. Ironically, a system originally adopted supposedly so everyone could get health care becomes an institutionalized means for deciding when some shall be denied health care.