Economists have found that some risky behaviors increase and preventative medicine use decreases when individuals in the U.S. turn 65 and qualify for Medicare (public health insurance). This phenomenon is most consistent with which of the following concepts?
A)Moral hazard
B)Time inconsistency
C)Availability bias
D)Confirmation bias

Question

​Economists have found that some risky behaviors increase and preventative medicine use decreases when individuals in the U.S. turn 65 and qualify for Medicare (public health insurance). This phenomenon is most consistent with which of the following concepts?
A)​Moral hazard
B)​Time inconsistency
C)​Availability bias
D)​Confirmation bias

Quizplus · Accepted Answer

This phenomenon is consistent with moral hazard. Moral hazard refers to the idea that people may behave differently when they are insured because they know they will not have to bear the full cost of any negative consequences. In this case, people may take more risks or not take preventative measures because they know they have Medicare to fall back on if something goes wrong.

​Economists Have Found That Some Risky Behaviors Increase and Preventative

Economists Have Found That Some Risky Behaviors Increase and Preventative