Sample by My Essay Writer
Application of the supply and demand theory by health economists
Law of demand states that all factors being held constant, as the price of a good or service increases, the demand for the good or service will decrease that is the higher the price, the lower the demand and vice versa (Bowling, 2014). This law of demand will affect the market for health insurance in the way that if the insurance increases its rate, then few people will go for the insurance policy but if the insurance coverage reduces its rates, then many people will embrace the insurance policies.
Lowering the price at which clients can access medical cover will see to it that many citizens will be able to adopt the policy as it becomes affordable to all. The primary focus of the of the ObamaCare is to make health care affordable and accessible to all, and this significantly affects the law of demand. The need for the service that is the demand for health care service will increase since the price will be low and the service will be affordable and accessible to all citizens of all walks of life thus meeting the goal of the Affordable Care Act (Bowling, 2014).[“Write my essay for me?” Get help here.]
The law will also affect the average of health insurance in such a way that for the insurance policy to be favorable to all people that are affordable, it has to be small enough so that all people can access and afford it (Falconi & Roe, 2013).This will bring about a change in the average pricing of the health insurance cover because it has to be lowered so that the Affordable Care Act goals can be met by making health insurance affordable and accessible to all.[Click Essay Writer to order your essay]
Pricing of any commodity or service is determined by the demand of the good or service. That is thus the aim of the Affordable Care Act is to increase the demand for the service then the price of the service has to be lowered as the law of demand states thus affecting the average price of the health insurance by the law of demand.
The law of supply states that all other factors being held constant, as the price of a good or service increases; the quantity of the good or service that the suppliers offer will increase. This means that the higher the price the vendors tend to maximize the profits by increasing the amount of the good or the service they provide and vice versa (Falconi & Roe, 2013). This law would affect the supply of the health insurance in such a way that since the Affordable Care Act aims at making the health insurance policy favorable. It will reduce the price of the service which in return will lower the supply as the suppliers will not tend to offer their products or services as there is no profit maximization since the prices are not favorable by the law of supply.[Need an essay writing service? Find help here.]
It can be noted that prices favorable will run many suppliers to venture into the industry with the aim of offering the service since the returns will be high and they will be making profits. On the other hand, when the prices are unfavorable fewer suppliers will be willing to venture into the business as the returns they gain law and improper to them and in accordance with the law of supply (Falconi & Roe, 2013). The Affordable Care Act has its goals set at affordability and accessibility of the health insurance and thus the demanding law favors it as price will reduce then many citizens will afford it becoming affordable and accessible but the law of supply is unfavorable as the suppliers will be less.
Bowling, A. (2014). Research methods in health: Investigating health and health services.
Falconi, C., & Roe, T. L. (2013). Economics of food safety: Risk, information, and the demand and supply of health. Minneapolis: Economic Development Center, Dept. of Economics, University of Minnesota.