State provision of free healthcare may encourage individuals to engage in unhealthy behavior,such as excessive smoking or the consumption of alcohol.This is an example of ________.

Question

Quizplus · Accepted Answer

Moral hazard refers to the concept that individuals may take on more risk or engage in riskier behaviors because they are protected from the negative consequences of those behaviors. In the case of free healthcare, individuals may engage in unhealthy behaviors because they know that they can receive free medical treatment if they become sick or develop a medical condition. This is a potential downside to state provision of free healthcare, and one that policymakers must consider when designing healthcare policies.

State Provision of Free Healthcare May Encourage Individuals to Engage