What Is Adverse Selection in Health Insu...

Adverse selection happens when there is an imbalance between high-risk or sick policyholders and healthy policyholders within the realm of health insurance. The most common way of adverse selection occurring is when sick people who need more protection and coverage begin purchasing up policies in a higher rate than those who are healthy who need little to no coverage and may not purchase a plan at all.   This can eventually lead to significant financial issues within the insurance industry, amounting to higher health insurance premiums for users. While the Affordable Care...