Conan, a bit of a hypochondriac, decides that he should have MRIs covering his whole body and insists that his doctor order them. Conan tells his doctor that he is not concerned about cost because he has great insurance. Which of the following is the appropriate and recognized term for the problem associated with Conan's behavior as far as an insurer is concerned?

Question

Quizplus · Accepted Answer

Moral hazard refers to the situation where individuals may take greater risks or use more services than necessary because they do not bear the full cost of those actions, often due to insurance coverage. Conan's insistence on unnecessary MRIs because he is not concerned about the cost due to his insurance is an example of moral hazard.

Conan, a Bit of a Hypochondriac, Decides That He Should