Reading this justification of X||Y_x|Z, I was ready to plead ignorance of "cost sharing" "copay" "actuaries" and "utilization trends" and quit before it gets too
domain-specific. But out of respect to your genuine attempt to capture the meaning of this statement,
I offer my version, in generic terms. (1) The cryptic statement X||Y_x|Z, also named "conditional ignorability" (CI) by PO folks, is a feature of the
population under study and, when valid, provides a license to estimate the ATE using regression, simply "controlling for Z"
CI is the key assumption behind all works in PO. (2) Being a feature of the population, it can be validated from our model of the world, without thinking about what we do or wish to do. It depends only on how Z is related to X and Y in the presence of other variables if any.
(3) If our model comes in the form of a DAG (a depiction of economic structural equation model) we can validate CI by simply checking if all paths between X and Y are "backdoor-blocked by Z". (4) The notion of "backdoor-blocked by Z" is a fun, game-like criterion on DAGs
that can be mastered in 5-12 minutes by any economist who is serious about finding out if ATE is estimable by regression. See #Bookofwhy or PRIMER ucla.in/2KYYviP. Shunning DAGs, PO folks must assume CI apriori, unjustified, and some economists follow them blindly.