10. Which of the following groups tends to worsen the problem of adverse selection in health insurance market?

a. good people

b. sick people

c. people living in houses made entirely of rock

d. all of the above

Booster class

Microeconomics

Skill

Understanding Insurance and Imperfect Information

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Raushan RajLv8

2 Nov 2020

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Related questions

12. Which of the following is a consequence of the adverse selection problems that health insurance companies face?

a. Health insurance companies charge less for young, healthy people than old, less healthy people.

b. Health insurance companies sometimes refuse to offer health insurance to people with chronic illnesses.

c. Health insurance companies sometimes refuse to offer group insurance to large companies because there are too many insured people to accurately price this insurance.

d. The equilibrium quantity of health insurance is greater than it would be in the absence of adverse selection.

11. Which of the following makes the adverse selection problem in the health insurance market worse?

a. charging high premiums for insurance coverage

b. refusing to offer insurance policies to certain people

c. requesting a medical examination for new applicants

d. all of the above

One reason why adverse selection problem arise in health insurance markets is that

a. Sick people are more likely to purchase health insurance than healthy people.
b. Because of advances in medical technology, people are living longer. These medical
advances are costly and drive up the price of insurance for everyone.
c. The average age of citizens of the United States has increased in recent years, and
will continue to increase over the next 20 to 30 years. As older citizens retire, more and
more of their medical bills will have to be paid by younger workers.
d. Fewer men and women are choosing medical careers because of the increase in the
cost of malpractice insurance.