You are a government policymaker with the responsibility to propose a policy that will reduce adverse selection in the health insurance market. Which of the following policies would achieve that goal?
A)The government will protect the people's right to keep their personal information private.
B)The government will subsidize the cost of health insurance.
C)The government will ensure that people can opt-in and opt-out of health insurance at any time.
D)The government will fund a public information campaign to reduce risk aversion.

Question

Quizplus · Accepted Answer

Subsidizing the cost of health insurance would make it more affordable for individuals to purchase coverage, thereby increasing the size of the insurance pool and reducing adverse selection. This policy would also help to redistribute the cost of healthcare to healthier individuals, who might otherwise choose to go uninsured. Options A, C, and D do not address the underlying causes of adverse selection in the market.

You Are a Government Policymaker with the Responsibility to Propose