The fact that people in average health may be discouraged from buying health insurance by the high price is likely a consequence of the lemons problem in the market for health insurance.

Question

Quizplus · Accepted Answer

The lemons problem occurs when individuals with higher risks of needing healthcare are more likely to purchase health insurance, leading to higher premiums for everyone. This results in healthier individuals being discouraged from purchasing insurance due to the high cost, which can cause adverse selection in the market.

The Fact That People in Average Health May Be Discouraged