When someone with no health insurance buys a high deductible health insurance policy

Question

Quizplus · Accepted Answer

All the statements are correct regarding the purchase of a high deductible health insurance policy by someone without prior insurance. A high deductible reduces the moral hazard problem because the insured has to pay a significant amount out-of-pocket before the insurance coverage kicks in, which encourages more responsible behavior. The premium for the policy is lower than it would be for a low-deductible or no-deductible policy because the insurance company's risk is reduced. The policy provides coverage for large losses, which are more catastrophic and financially burdensome, while small losses, which are more manageable, are not covered, encouraging the insured to avoid minor claims and reduce the insurer's costs.

When Someone with No Health Insurance Buys a High Deductible