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Let me explain what I mean:

When i say supply and demand does not apply, I mean the basic rules of supply and demand do not apply. In most cases where the free market is effective at allocating resources, it's because when demand increases, price increases, and when demand decreases, price tends to decrease.

The problem with things like Healthcare, housing, food, etc. Is that that demand line is a straight line. People cannot choose to not eat, or have shelter (at least most people don't want to be homeless), or have Healthcare, so they are left with a single option: to go into debt.

Because people cannot choose not to purchase necessities, according to the supply and demand rules, and the basics of capitalist economics (charge as much as people are willing to pay), with no change in demand based on price and with no legitimate regulations, this kind of thing always results in exorbitant prices that most people cannot afford.

What I mean in one sentence: the free market is incapable of allocating resources effectively for necessities because people can't just choose not to buy.