A provision of the Affordable Care Act states that private insurance companies cannot deny coverage to anyone because of a preexisting medical condition. By offering health insurance to people with preexisting medical conditions, this provision eliminates ________ for both the insurance company and the policy holder, and eliminates ________ for the insurance company.

Question

Quizplus · Accepted Answer

The provision eliminates asymmetric information by ensuring that insurers cannot deny coverage based on preexisting conditions, and it eliminates adverse selection by allowing people with preexisting conditions to obtain insurance, thus broadening the risk pool.

A Provision of the Affordable Care Act States That Private