Less demand does not equal lower price in the insurance market. As healthy people have wised up to the health insurance ripoff and dropped their coverage under Obamacare, insurers are left with a shrinking pool of customers who have the most expensive claim histories. That’s what drives up the premiums for everyone who is left, thereby driving this death spiral in the insurance industry.
You just described what is happening right now. The Ryan plan was specifically designed to break the death spiral.
Under the current system, healthcare costs go up then government subsidies go up, which drive healthcare costs up even further. It’s a never ending cycle. Obama put this on autopilot and the freedom caucus saved it from repeal. Now you know what people are referring to when they talk about “implosion” and “death spiral”.