Providers of health care insurance require applicants to provide information on their medical history.The purpose may be to minimize which of the following problems?

Question

Quizplus · Accepted Answer

Health care providers require applicants to provide information on their medical history to minimize adverse selection. Adverse selection refers to the tendency for higher-risk individuals to purchase insurance, which can lead to higher costs for the insurer. By requiring medical history information, insurers can more accurately price their policies based on the risk of the individual, which can help to prevent adverse selection.

Providers of Health Care Insurance Require Applicants to Provide Information