Question

Insurance is managed by employers, so if an employee is sick and loses her job, her insurance will be expensive due to preexisting conditions; by contrast,
a healthy person who loses his job may not be incentivized to purchase health insurance. This is an example of
O Moral hazard
Selection bias
Pooled risk
HMO

Answer 1

This is an example of Selection bias.

What is Insurance?

Insurance exists as a way to manage your risk. When you buy insurance, you purchase security against unexpected financial losses. The insurance company reimburses you or someone you determine if something bad happens to you. If you have no insurance and an accident occurs, you may be accountable for all corresponding costs.

Insurance plans exist beneficial to anyone examining to protect their family, assets/property, and themselves from financial risk/losses: Insurance plans will permit you to expend for medical emergencies, hospitalization, contraction of any illnesses and treatment, and medical care needed in the future.

Selection bias happens if those who enroll in HMOs are either more or less likely to utilize health services after changing for factors utilized to set rates (e.g., Medicare sets HMO rates based on age, sex, Medicaid eligibility, and institutional status).

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