Suppose Inverness was considering offering a special add-on to its standard Dental insurance. For an additional 1 dollar a month a family could be fully covered for professional teeth whitening, something that normally would cost five thousand dollars a treatment. The whitening procedure would erase any stains that build up over time as a result of drinking too much coffee. Would this benefit create an adverse selection and/or moral hazard problem? If so explain why, and how the benefit could be better designed to address these issues.

Suppose Inverness was considering offering a special add-on to its standard Dental insurance. For an additional 1 dollar a month a family could be fully covered for professional teeth whitening, something that normally would cost five thousand dollars a treatment. The whitening procedure would erase any stains that build up over time as a result of drinking too much coffee. Would this benefit create an adverse selection and/or moral hazard problem? If so explain why, and how the benefit could be better designed to address these issues.

Essentials of Pharmacology for Health Professions

7th Edition

ISBN:9781305441620

Author:WOODROW

Publisher:WOODROW

ChapterCRE2: Comprehensive Review Exam For Part 2

Section: Chapter Questions

Problem 4CEP2

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