A divorced economics professor applies the principles of microeconomics to his online search for a new life partner, attempting to find insights from search theory, signaling,
adverse selection, statistical discrimination, supply and demand in thick markets, positive assertive matching, and network externalities.
In one of the best sections of the book, they put to rest the idea that there is rampant
adverse selection in the market for health insurance; this mistaken belief seems to have been behind many health insurance economists' support of the Patient Protection and Affordable Care Act, better known as Obamacare.
Steve McKay, CEO of DriveFactor, said, 'With DriveFactor, we're giving the auto insurance market more flexibility to expand usage-based insurance, reduce
adverse selection, and reward safer drivers.
(SIIA) today announced the release of a new white paper, Self-Insured Group Health Plans, Stop-Loss Insurance &
Adverse Selection, which has been published to correct inaccurate information that state and federal policy-makers have been provided about how the self-insurance marketplace operates.
Such "
adverse selection" drove prices up, which pushed firms with healthier employees out.
Unfortunately, while these cost savings may be attractive to the employer, they may, unintentionally, compound the problem through
adverse selection. That is, the healthiest employees will, if so motivated and allowed by the organization's benefit package, simply drop the insurance or part of the insurance (e.g., family coverage) and seek a less expensive personal policy.
One thing the insurance company board spent a lot of time on was a seemingly endless discussion of
adverse selection, one of the two bogeymen of the insurance industry.
We begin by using this framework to review the "textbook"
adverse selection environment and its implications for insurance allocation, social welfare, and public policy.