Health insurance companies often charge high premiums because they expect to attract ________.

Question

Quizplus · Accepted Answer

Health insurance companies expect high-risk individuals to require more medical care and incur more costs, so they charge higher premiums to offset those costs. Risk-averse or risk-neutral individuals may also purchase insurance, but they would not necessarily drive up premiums on their own. Low-income individuals may have difficulty affording insurance, but this does not necessarily impact premium pricing.

Health Insurance Companies Often Charge High Premiums Because They Expect