When the government subsidizes the cost of health insurance
A)the cost of insurance rises for all people in the country's population.
B)the cost of insurance rises for high-cost people in the country's population.
C)fewer people will buy insurance, decreasing adverse selection.
D)more people will buy insurance, decreasing adverse selection.

Question

Quizplus · Accepted Answer

When the government subsidizes the cost of health insurance, it becomes more affordable for people to buy insurance. This generally leads to more people purchasing insurance, which spreads the risk across a larger population and decreases adverse selection.

When the Government Subsidizes the Cost of Health Insurance