Question

How will the "Public Option" under the Affordable Care Act expansion Joe Biden is proposing affect the "market" for health insurance? Please consider supply and demand.

Answer 1

The public health insurance option,also known as the public insurance option or the public option,is a proposal to create a government-run health insurance agency that would compete with other private health insurance companies within the US.The public option was initially proposed for the Patient Protection and Affordable Care Act,but was removed after Senator Joe Lieberman(I-CT) threatened a filibuster.Introducing a public option could create a two-tier health system where employer-based insurance provides access to a different set of hospitals or services than those available to enrollees in public insurance.By 2028, 20% of state marketplaces would not offer a single private insurance option as a result of the introduction of the public option.The success of the ACA in expanding affordable coverage through increased private sector competition is one reason why it remains popular today.

The supply and demand affect as follows:

The Law Of Demand applies to health care as in other markets:as the price of health care increases,you demand less of it.As price falls, consumers purchase higher annual quantities and producers gradually raise prices.Consumers then gradually reduce the quantity purchased and prices gradually go down.The market balances this out.