…So maybe one of you smart people can explain this to me.
Since, theoretically, everyone is now going to be required to purchase health insurance, but there hasn’t been an increase in health insurance providers to cover the soon-to-be huge surge in customers, what’s to prevent the insurance providers from raising their rates exorbitantly?
I mean, isn’t that what supply and demand is all about? We’re about to have a ginormous demand for health insurance but a limited amount of suppliers sooooo…massive price raising?
Maybe I’m wrong. I don’t know.
Think about when states required all drivers to purchase car insurance before getting on the road? It’s obviously not as widespread (not everyone drives) but premiums did go up.
So you’re exactly right: Health insurance companies will make a lot more money thanks to this Act. Now the argument against this point would be to point out the fact that the Patient Protection and Affordable Care Act stipulates that insurers spend 80% of premiums on medical care.
The problem with that, as an argument, is that now that everyone will be required to have health insurance, chances are the demand for medical supplies will greatly increase, as will the demand for doctors. The demand for everything in the medical industry will be on the rise, therefore pushing up premiums and allowing for the insurer’s 20% to grow probably significantly.
More and more money is going to be tied up in the medical industry (just like when Medicare/Medicaid were introduced to the market) which will unfortunately effect the rest of the economy poorly and leave the middle-class more strapped for cash.