The adverse selection death spiral refers to the process of _____ people finding the price of health insurance to be _____, and the market eventually dying.
A) healthy; too low
B) healthy; too high
C) unhealthy; too low
D) unhealthy; too high

Question

Quizplus · Accepted Answer

Adverse selection occurs when healthier individuals opt out of insurance because they find the premiums too high, leaving a pool of less healthy individuals, which drives up costs and can lead to market failure.

The Adverse Selection Death Spiral Refers to the Process of _____