Which of the following helps reduce the problem of adverse selection in health insurance markets?
A) Signaling
B) High premiums
C) High rates of taxation
D) Patents

Question

Quizplus · Accepted Answer

Signaling helps reduce adverse selection in health insurance markets by allowing individuals to convey information about their health status to insurers. This can be done through activities such as getting regular check-ups, maintaining a healthy lifestyle, and providing medical records. Insurers can use this information to price their policies appropriately and avoid adverse selection. High premiums or high rates of taxation may discourage healthy individuals from purchasing insurance altogether, leading to further adverse selection. Patents are not related to the issue of adverse selection in health insurance markets.

Which of the Following Helps Reduce the Problem of Adverse