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Suppose that individuals differ in their relevant attributes, such as their medical history, lifestyle, and overall risk of disease. Also suppose that those differences are known to the individuals but not directly observable by insurers. If the price of health insurance is based on the average health of everyone in the population, healthy people are more likely to their insurance, resulting in a insurance pool and insurance prices. This issue in the health insurance market is known as . True or False: In part owing to such incentives, the United States pays more for health care, as a percentage of GDP, than other developed countries. True False Grade It Now Save & Continue Continue without saving

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Answer:

The answer is "True".

Explanation:

In the given question, some information is missing, that is "Fill in the blank", which can be described as follows:

  • The healthcare insurance premium is focused on everybody's median health in the population, healthier people are likely to cancel their policies, leading to a Sicker patient pool and greater insurance prices.  
  • This topic is regarded as an adverse selection of the health insurance market. Since health insurers company doesn't have full medical information they charge a premium of the patient, that's why the given statement is true.

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