The employer-based US health care market is a perfect example.

Much of the pathological health care system operating today in the US can be traced back to two government decisions. The first was the decision to impose wage and price controls during World War II. This had the unintentional effect of causing employers to begin offering health care as an alternative form of compensation to attract top workers. The second was a 1951 decision by the IRS to treat health insurance as a deductible business cost. This had the unintended consequence of making it cheaper (due to the tax deduction) to provide even routine medical care through an insurance model rather than a fee-for-service model.

Insurance, as a payment system, only makes sense for large unexpected costs. After 1951 the entire health care system was slowly taken over by insurance, to the point where we think of not having health insurance as being almost equivalent to not having access to medical care.

As a result we live with all kinds of inefficiencies and unfairness. Pricing is utterly opaque. Choices are limited. Incentives are distorted. The system is bloated with administrators whose only job is to decide who pays for what services (a moot question in either a fee-for-service or a single-payer model.) And all this from what seemed like sensible enough answers sixty years ago to wartime inflation and an arcane question of tax policy.

Thanks to Quora User for providing corrections and additional context in the comments section, which I've incorporated above.