If demand goes up and supply is constrained, health care will cost more. If there is excess supply, then if demand goes up, health care may not cost more.
Will demand go up? I believe that overall, it won’t so much go up as switch from hospital settings to primary care settings. Demand will go up for primary care, but down for tertiary care. The supply of physicians may switch over to internal and pediatric medicine as the demand for those physicians goes up, and salaries go up as a result.
As demand for primary cares rises, I suspect that productivity in primary care will rise. New information systems are being installed and there is and will be more expanded use of less expensive providers, such as nurse practitioners. And, as others point out, as the incentives for defensive medicine are reduced, demand for care will be reduced.
So many factors. So difficult to predict the overall impact. It will take care of itself, and we will deal with the consequences as they become apparent. In any case, without a public option, health insurance cost won’t go down (due to little increase, if any, in competition between health insurers), and not so many new folks will be covered and demand may not rise very significantly.
Even if there were a public option, demand would probably increase slowly, if at all, due to the maintenance of the current method of financing health care. Without a single-payer system, little will change. It’ll all be cosmetic. I don’t expect much change from any of the current proposals. Republicans and conservative Democrats have effectively squelched any meaningful or effective health insurance reform.
In fact, under the current proposals, health spending is likely to increase even more. The savings will be illusory, and the system will not achieve the results that are imagined. Republicans will say “we told you so,” and urge a return to the current system. They might win, and remove the attempts at universal insurance. Eventually, this will work even less well, and the pendulum will swing the other way. Whether it will ever swing far enough to get a sensible universal insurance program that is financed in an efficient way, I can not predict.