Health insurance is subject to
A)Both asymmetric information problems and moral hazard problems
B)Neither asymmetric information problems nor moral hazard problems
C)Asymmetric information problems but not moral hazard problems
D)moral hazard problems but not asymmetric information problems

Question

Health insurance is subject to
A)​Both asymmetric information problems and moral hazard problems
B)​Neither asymmetric information problems nor moral hazard problems
C)​Asymmetric information problems but not moral hazard problems
D)​moral hazard problems but not asymmetric information problems

Quizplus · Accepted Answer

Health insurance is subject to both asymmetric information problems and moral hazard problems. Asymmetric information arises because the insurer does not have perfect information about the health status and health risk of the insured, while moral hazard arises because insurance can potentially lead the insured to take on more risk or engage in risky behavior since they are protected by insurance.

Health Insurance Is Subject to