What worsens adverse selection in a dental insurance market where buyers have private information?

Question

Quizplus · Accepted Answer

Allowing buyers to opt-in and opt-out of the market at any time they desire can worsen adverse selection because the high-risk individuals who are most likely to incur dental expenses may be more likely to opt-in, while low-risk individuals are more likely to opt-out. This would leave the insurance pool with a disproportionately high number of high-risk individuals, leading to higher premiums and more adverse selection. Therefore, options A, B, and C would not worsen adverse selection as much as option D.

What Worsens Adverse Selection in a Dental Insurance Market Where