Lots of people don’t have insurance because they have some form of chronic illness. That’s not a surprise because if you’re already sick, what insurance company would want to cover you? And if they do offer you a policy, it’ll likely cost a fortune. But if you make so no one can be denied insurance if they want it, and no one can be forced to pay more if they’re sick; then there’s no reason for healthy people to buy insurance. They can just wait until they get sick, and then go buy insurance for the same amount they could have purchased it before they got sick. This is the principle of asymmetric information: only one party knows all the information. But if only sick people buy insurance, then the price of premiums will go up. This leads to even more healthy people forgoing insurance; with only sick people left, the price goes up even more, making more healthy people opt out. This adverse selection causes the private insurance industry to go into a deadly spiral towards market failure. With obamacare’s healthcare mandate, everyone must buy insurance, which will keep the prices down and the …show more content…
If a single-payer system were put into effect, healthcare costs would drastically decrease. Yes, it would limit supplies and cut back on extraneous procedures, but it would also free up some money to go towards other areas. The United States is actually one of the few industrialized countries to not partake of this system. Countries such as England, Canada, and Australia all provide universal healthcare while spending less than 10 percent of their GDP; whereas, currently, the United States is spending more than 17 percent of its GDP on healthcare. One of the reasons healthcare in the United States is so high is because it doesn’t negotiate as aggressively as other countries do. If the United States participated in centralized negotiation, prices would be pushed lower as firms competed for the