One Reason Why Adverse Selection Problems Arise in Health Insurance

question 63

Multiple Choice

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

• A)sick people are more likely to want 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.

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Definitions:

Cultural Psychology

A branch of psychology that studies how cultural traditions and social practices influence human behavior and mental processes.

External Attribution

The process of assigning the cause of behavior to situational factors outside of the individual.

Self-Control

The capacity to control one's feelings, thoughts, and actions when confronted with desires and sudden urges.

Protecting

The action of keeping someone or something safe from harm, damage, or potential threats.