An advantage of employment-based insurance to the individual is that it:
A)lowers premiums below those offered by the government.
B)decreases the likelihood of adverse selection.
C)increases market efficiency, as the government no longer must pay for public medical coverage through taxation.
D)receives favorable tax treatment.

Question

Quizplus · Accepted Answer

Employment-based insurance receives favorable tax treatment, as the premiums paid by the employee are typically excluded from taxable income. This can lead to lower out-of-pocket costs for the individual and make the insurance more affordable. Adverse selection (choice B) is not necessarily decreased by employment-based insurance, as it may still attract those who are sicker and need more medical care. Market efficiency (choice C) is not significantly impacted by the type of insurance an individual has. Lower premiums (choice A) may be possible with employer-based insurance, but this is not always the case and does not apply to all individuals.

An Advantage of Employment-Based Insurance to the Individual Is That