The Problem of Adverse Selection in Health Insurance Leads to a Situation

question 64

Multiple Choice

The problem of adverse selection in health insurance leads to a situation in which:

• A) health insurance covers inappropriate items for the population it serves.
• B) overinsurance of the premium-paying population occurs.
• C) underinsurance of the premium-paying population occurs.
• D) the percentage of the premium-paying population that is healthy rises, squeezing unhealthy individuals out of the market.
• E) the percentage of the premium-paying population that is unhealthy rises, squeezing healthy individuals out of the market.

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Definitions:

Note-Taking

The practice of recording information captured from another source, typically in the context of a lecture or reading.

Visual

Pertaining to the sense of sight or visual aids.

Kinesthetic

Pertaining to the kinesthetic sense, which is responsible for perceiving the position, weight, or motion of muscles, tendons, and joints.