Many Health Insurers Require a Deductible Where the Policyholder Pays

question 101

Multiple Choice

Many health insurers require a deductible where the policyholder pays the first part of any loss.The use of a deductible most directly treats the problem of:

• A)Information symmetry
• B)Adverse selection
• C)People going uninsured
• D)Moral hazard

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Definitions:

Allowance Method

An accounting technique used to account for bad debts by estimating uncollectible accounts at the end of each period.

Receivables

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Allowance Method

An accounting technique to estimate and account for bad debts, where anticipated uncollectible accounts receivable are predicted and recorded.

Uncollectible Receivables

Accounts receivable that cannot be collected from customers, often recognized as a bad debt expense.