Question

In terms of supply and demand in economics how does the Public Option under the Affordable Care Act affect the markets of healthcare?

Does supply go down and demand go up if more people become insured? Will costs go down if the Public Option strives to lower costs?

Answer 1

The Affordable Care Act is a watershed in U.S. public health policy. The Act will cut the number of uninsured Americans by more than half. The law will result in health insurance coverage for about 94% of the American population, reducing the uninsured by 31 million people

Health-care reform has always struggled to align access and affordability. affordable health care is expensive to provide. If Public option is taken in to consideration, then it will incur huge cost for government. as it will include more number of people in health insurance coverage. Providing quality and affordable health care has always been challenging for any democratic country. Because when there will be excess demand for affordable health care, there may not be adequate supply of facilities to cater the demand or cost will go up to meet those demands.

Yes if more people become insured then supply will go down and demand will go up because more people will be covered uner health insurance coverage. Cost will go down if the public option strives to lower cost. Because at lower cost, the insurance coverage will be of lesser amount. it might reduce health insurance cost in the economy.