Indicate whether the following statement is true or false and then explain why you think this...
Indicate whether the following statement is true or false and then explain why you think this is. Include in your explanation any pertinent institutional details, empirical studies and/or economic reasoning (including appropriate graphs and equations)
Universal health coverage cannot exist when asymmetric information is present.
Homework Answers
The given statement is FALSE
Reason: Even when asymmetric information is present, universal health coverage can exist, however it would make the insurers worse off.
Since asymmetric information leads to insurers making poor or inefficient decision, the Medicare Act mandates universal coverage. This exposes the insurers to a lot of risk but there is no escape.
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