Insurance companies attempt to minimize adverse selection by:
A)relying on the government to pay for health insurance.
B)screening and employment-based health insurance.
C)relying on the free market to allocate risk efficiently.
D)charging high premiums to young,healthy people.

Question

Quizplus · Accepted Answer

Screening and employment-based health insurance allow insurance companies to collect information on the health and risk of potential policyholders, and to offer different plans and premiums based on that information. This helps to lessen adverse selection by ensuring that policyholders who are likely to cost more in claims pay higher premiums.

Insurance Companies Attempt to Minimize Adverse Selection By