People who have certain health conditions may be more likely to seek better health insurances with higher coverage driving up the costs while people who are healthy may not want to spend much for health insurance as they believe they will need less healthcare. This is a problem of
A) market for lemons.
B) adverse selection.
C) moral hazard.
D) all of the above.

Question

Quizplus · Accepted Answer

This scenario describes adverse selection, where individuals with higher health risks are more likely to purchase health insurance, or seek better coverage, than those with lower health risks. This can lead to imbalances in the insurance pool, driving up costs for insurers.

People Who Have Certain Health Conditions May Be More Likely