3-50 the Problem of Adverse Selection

question 56

Multiple Choice

3-50 The problem of adverse selection

• A)implies that many people who do not need insurance coverage have it through group plans.
• B)means that those people who apply for insurance are the least likely to need insurance coverage.
• C)causes insurance underwriters to alter the health statistics of the general population when determining appropriate premiums.
• D)creates a savings element along with the insurance component of the premium and policy.
• E)does not exist in the insurance industry.

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Definitions:

Health Insurance

Health insurance is a type of insurance coverage that pays for medical and surgical expenses incurred by the insured, often including services such as hospital stays, doctor visits, and prescription medications.

Overconsumption

The excessive use of resources or consumption of goods beyond what is sustainable or necessary.

Uncompensated Health Care

Medical services provided to individuals without any form of payment or reimbursement, often absorbed by healthcare providers as a financial loss.

U.S. Hospitals

Hospitals in the United States are healthcare institutions providing patient treatment with specialized staff and equipment.