Question

true/false:

a. Adverse selection is a greater problem with insurance offered by large employers, than with insurance offered by small employers in the U.S.

b. Health insurance exchanges in the U.S. eliminate moral hazard.

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

d. The Bismarck Model in Germany controls costs by reducing health insurance choice.

e. The health care system in the U.S. and the Bismarck Model in Germany both rely mostly on private physicians to deliver care.

Answer 1

Ans a. True
Because large employers have to bear higher risk than smaller employers and adverse selection will affect profits of the company.

Ans b. True
Because moral hazard is a situation in which one party bears risk and another party benefits therefore health exchange in United States eliminates moral hazard.

Ans c. True
Because high deductible plan in US reduce adverse selection because it includes higher premiums and attractive and sure benefits.

Ans d. True
Because Bismarck model in Germany uses an insurance system which is jointly financed by both employers and employee.