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In: Economics

Suzanne has no deductible on her health insurance policy she will tend to engage in a...

Suzanne has no deductible on her health insurance policy she will tend to engage in a lifestyle that is less healthy than a person with $1,200 insurance deductible this is said to be a problem of

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This is the problem of moral hazard. There is a lack of incentive for Suzanne to guard against bad health since there is no deductible on her health insurance. On the other hand, the person with 1200 deductible knows that he or she will have to pay the first 1200 dollars from his or her own pocket which prevents that person from indulging in an unhealthy lifestyle.

Rahul Sunny answered 2 years ago
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