If a health insurance company offers coverage regardless of age,health status,or smoking history,it is likely to suffer
A) moral hazard problems.
B) adverse selection problems.
C) lower costs.
D) low demand for its product.
E) a screening equilibrium.

Question

Quizplus · Accepted Answer

When a health insurance company offers coverage regardless of age, health status, or smoking history, it is likely to attract individuals who are at higher risk of needing medical treatment, leading to adverse selection problems. This can result in higher costs for the insurance company and potentially higher premiums for all policyholders.

If a Health Insurance Company Offers Coverage Regardless of Age,health