Question

An HMO tries to reduce cost by restricting the providers that a beneficiary can see, and also restricting where they can go for services. True False Question 2 (1 point) A concept that occurs because those individuals and businesses likely to incur losses are most likely to purchase insurance as opposed to those less likely to incur loss. Random loss Adverse selection Risk transfer Underwriting Pooling

Answer 1

Question 1: True ( A patient holding HMO policy, have to meet PCP initially and can go to other providers only on the basis of PCP's referral

Question 2. Adverse selection -  Adverse selection is a market situation where buyers and sellers have different information, so that a participant might participate selectively in trades which benefit them the most, at the expense of the other trader. Adverse selection is when sellers have information that buyers do not have, or vice versa, about some aspect of product quality. The above scenario falls under Adverse selection