The Cost of Group Health Insurance Is Lower Than If

question 151

Multiple Choice

The cost of group health insurance is lower than if an individual buys a policy on his own because

• A)the problem of adverse selection is reduced.
• B)moral hazard costs of a group tend to move to a low average.
• C)it is easier for the company to deny claims from a large group.
• D)insuring a group eliminates the problem of buyers having more information than the seller.

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Definitions:

Ear Canal

The tubular passage running from the outer ear to the eardrum, responsible for directing sound waves to the middle ear.

Nozzle

A device designed to control the direction or characteristics of a fluid flow (such as water or gas) as it exits an enclosure.

Reticular Activating System

A network of nerves in the brainstem that plays a key role in controlling arousal, wakefulness, and the transition between sleep and wakefulness.

Consciousness

The state of being awake and aware of one's surroundings, sensations, thoughts, and feelings.