Why may cost differences across plans be partly due to enrollee selection? Low-risk users are less likely to require medical services All plans inherently cost the same to administer Plans can segment their market to attract low-risk users and avoid high-risk users High-risk users tend to choose plans with higher premiums for more comprehensive coverage
Why may cost differences across plans be partly due to enrollee selection? Low-risk users are less likely to require medical services All plans inherently cost the same to administer Plans can segment their market to attract low-risk users and avoid high-risk users High-risk users tend to choose plans with higher premiums for more comprehensive coverage
Chapter11: The Market For Pharmaceuticals
Section: Chapter Questions
Problem 1QAP
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![Why may cost differences across plans be partly due to enrollee selection?
Low-risk users are less likely to require medical services
All plans inherently cost the same to administer
Plans can segment their market to attract low-risk users and avoid high-risk
users
High-risk users tend to choose plans with higher premiums for more
comprehensive coverage](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ea4fc46-769d-4957-9a3e-8b78ddd7685d%2Fddc250f8-6bdf-4821-9f14-af560decb530%2Fbnmblmi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Why may cost differences across plans be partly due to enrollee selection?
Low-risk users are less likely to require medical services
All plans inherently cost the same to administer
Plans can segment their market to attract low-risk users and avoid high-risk
users
High-risk users tend to choose plans with higher premiums for more
comprehensive coverage
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