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:

Family Farmers

Small-scale farmers who own and operate their farms primarily with family labor, focusing on the sustainability of agriculture and rural communities.

Regular Income

Earnings received by an individual or entity on a steady and predictable basis, often from employment or investments.

Automatic Stay

Under the Bankruptcy Act, the suspension of all litigation against the debtor and his property, which is triggered by the filing of a bankruptcy petition.

Alimony

Financial support paid by one ex-spouse to another after divorce or separation, as dictated by a court order or agreement.