Which of the following statements is consistent with moral hazard?
A)The more coverage a health insurance policy provides, the more often medical care will be sought.
B)The more coverage a health insurance policy provides, the less often medical care will be sought.
C)The more coverage a health insurance policy provides, the more often the policyholder will get sick.
D)The more coverage a health insurance policy provides, the less often the policyholder will get sick.

Question

Quizplus · Accepted Answer

Moral hazard refers to the tendency for individuals to take on more risk when they are protected from the consequences of their actions. In the case of health insurance, if individuals have more coverage, they may be more likely to seek medical care because they do not bear the full cost of that care. Therefore, choice A - "The more coverage a health insurance policy provides, the more often medical care will be sought" - is consistent with moral hazard.

Which of the Following Statements Is Consistent with Moral Hazard