Which of the Following Is Not an Advantage of Risk

question 97

Multiple Choice

Which of the following is not an advantage of risk pooling?

• A)By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection.
• B)It gives very sick people in the group the same access to health care at the same premiums as healthy individuals.
• C)It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.
• D)Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.

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Definitions:

Total Income

The sum of all earnings received by an individual or entity, including wages, salaries, benefits, and income from investments.

Total Taxes

The cumulative amount of taxes levied by a government on an individual, corporation, or other entity in a specified period, including income, sales, and property taxes.

Marginal Tax Rates

The rate at which your income above a certain threshold is taxed, showing the tax imposed on the incremental dollar of income.

Deductions

Amounts subtracted from gross income to determine taxable income, potentially reducing the amount of tax owed.