When a person has health insurance, they often have to pay nothing or very little (called a "copay")to see a doctor. This might result in
A)their being overly healthy.
B)a principal-agent problem.
C)some moral hazard, since people might overuse the benefit.
D)an adverse selection problem.

Question

Quizplus · Accepted Answer

When people have health insurance and only have to pay a small copay to see a doctor, they may be more likely to overuse the benefit and seek medical care even when it may not necessarily be needed. This is an example of moral hazard, as it creates a situation where people are more likely to take risks or make decisions that they wouldn't make if they had to bear the full cost of their actions. This can lead to higher healthcare costs overall, as more people seek care than is medically necessary.

When a Person Has Health Insurance, They Often Have to Pay