Bob's insurance policy covers mental health services. Bob thinks the covered therapy is worth about $100...

Bob's insurance policy covers mental health services. Bob thinks the covered therapy is worth about $100 to him. The therapy actually costs $200. Bob goes to therapy because the copay on his policy is only $50. This is an example of

Question 14 options:

a)	Advantageous selection

b)	Adverse selection

c)	Full insurance

d)	Partial insurance

e)	Moral Hazard

Expert Solution

Bob's insurance policy covers mental health services. Bob thinks the covered therapy is worth about $100 to him. The therapy actually costs $200. Bob goes to therapy because the copay on his policy is only $50. This is an example of Partial insurance. So the correct option is D. "Partial insurance" describes insurance policies that do not include full coverage or only pay for a portion of the total bill when a claim is filed. Partial insurance policies are often available at a cheaper rate or under special circumstances.

Rahul Sunny answered 2 years ago

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