In the market for health insurance, asymmetric information problems arise becaus

Question

In the market for health insurance, asymmetric information problems arise because A. health insurance policies always include clauses that only the companies understand O B. buyers of health insurance policies always know more about the state of their health than do the insurance companies. ° C, privacy laws prevent the sellers of health insurance from asking buyers pertinent lifestyle questions O D. the sellers of health insurance require medical exams that give them more information than the buyers normally have.

Explanation / Answer

Answer:

B) Buyers of health insurance policies always know more about the state of their own health than do health insurance companies.

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