How is that outcome undesirable for both of them? On the contrary, the option of collusion in the prisoner's dilemma is desirable for neither of them.

The prisoner's dilemma only serves as an example to prove that there exists a situation in which collusion can yield an optimal result for a given metric (i.e. aggregate jail time). Nobody denies this. You have yet to make the case for how this applies towards any of the topics discussed. Are you saying that aggregate utility/welfare/health is optimized by having universal health care? If so, what specific metrics are optimized and by how much? What about the costs associated with doing this? Are the benefits greater than the costs? If so, how is this determined? If you want to make these claims, the burden of proof is on you.

As for your hypothetical, I am not advocating that Scandinavian countries suddenly abandon universal health care. I am simply refuting the points made in this article. If you want to have a discussion about the how the less fortunate would have health care in a free market, I am happy to oblige.