It's Hard to Participate, I Know All to Well (Post 6 of a Series of Posts)

The following is my sixth post in a series of posts that shows my letter to those members of Congress who voted for ACA.  If you have not read the first post then I encourage you to do so by clicking here and then reading each successive post until you arrive at this one.

The following portion of the letter is my attempt to help the reader have a better understanding of basic economics:

Economics 101 Helps Explain the Problem

I think you are familiar with the supply and demand curve shown to the right, which shows that:

               Demand is inversely proportional to costs of services purchased and

        Supply is proportional to cost of services sold.

I surmise that you must have thought by enacting ACA with its taxes and subsidies that the demand and supply curves would move to make healthcare more affordable. You were partially right at best; only the supply curve moved, but regrettably and contrary to your intentions.

The demand curve did not move because demand is arguably the same today as it was a year ago and as it was four years ago when you voted for ACA. The supply curve did move due to a shock to the system when the ACA, which was approved by your vote, was enacted with all its mandates/regulations. These regulations (as most do) moved the supply curve to the left as shown in the figure to the right.  

Healthcare became more expensive to the suppliers due to the increased cost-of-services sold caused by the mandates, which were subsequently, passed onto the consumer in a higher price (P_new) resulting in less coverage (Q_new), regardless whether paid directly or subsidized by others. I note that the CBO recently projected that the subsidized costs will balloon future deficits.