______________ is the problem faced by insurance companies because individuals who are more likely to have...

______________ is the problem faced by insurance companies because individuals who are more likely to have claims are also more likely to purchase insurance. (2 points)

a. Moral hazard
b. Adverse selection

c. Fee-for-Service

d. Managed Care

Solutions

Expert Solution

Option B is correct

Adverse Selection

Explanation:

Adverse selection is tendency of persons with risky lifestyle to have insurance, and companies fight this tendency by increasing premiums or limiting claim amount.

jeff jeffy answered 1 year ago

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