Answer to Question #92356 in Microeconomics for aberee

Question

True/False: explain please
a. Health insurance exchanges in the U.S. eliminate moral hazard.

b. High deductible plans in the U.S. reduce adverse selection

Answer 1

A. True (Moral hazard” refers to the additional health care that is purchased when persons become insured. This is the insurance)

B. False (A higher deductible reduces a plan's monthly premium payment but not adverse selection