If there is adverse selection in the health insurance market then this means that:
A) insurance companes can identify all the health problems facing its custamers
B) the price of health insurance may be greater than the costs of cavering the average person's health risks
C) peaple winth 5evere but hidden health problems areless likely to buy health insurance than ather peaple
D) people in average health are encauraged to purchase health insurance

Question

Quizplus · Accepted Answer

Adverse selection in the health insurance market occurs when individuals with a higher risk of requiring healthcare (those with severe or hidden health problems) are more likely to purchase health insurance than those with lower health risks. This can lead to a situation where the price of health insurance is higher than it would be if insurers could accurately assess and price the risk of all applicants, because the insurance pool is comprised of a higher proportion of high-risk individuals than the general population.

If There Is Adverse Selection in the Health Insurance Market