Crowding out can occur when public insurance crowds out private insurance.

Question

Quizplus · Accepted Answer

Crowding out is a phenomenon where increased government spending leads to a decrease in private sector spending. When public insurance becomes the primary option, it can lead to decreased demand for private insurance, which means private insurers may have to raise their premiums or reduce their services in order to stay in business. This can cause some people to drop their private insurance altogether, leading to a situation where public insurance is the only option.

Crowding Out Can Occur When Public Insurance Crowds Out Private