Imagine a community with only one insurance company that pro

Imagine a community with only one insurance company that provides coverage to everyone in that community (a universal insurer). Currently, the payer does not pay anything for physician office visits. However, bowing to intense lobbying pressure, the payer will pay 80% of the cost of these visits effective January 1. Describe the likely effect on demand curves for office visits to a physician as a result. What do you suppose will be the intended and unintended consequences?

Solution

Deand will increase from Jan 1st after insurance company paying 80% of physician office visits

There will be more people insuring these policies and unintended consequences will be premium might go up as cost will go up.Intended consequence more policies as more people signing and unintended consequences premium might go up as cost of insurance goes up