A study conducted by a research firm revealed that RiteCure Health Insurance charges higher premiums than most of its rivals. The study also revealed that unlike its rivals, 60% of RiteCure's customers have chronic illnesses

a) What is the link between these two findings? b) What is likely to happen if the premium continues to rise?

a) Because 60% of RiteCure's customers have chronic diseases, they are more likely to fall ill. As a result, RiteCure needs larger amounts of money to cover the medical costs of its customers. It therefore charges a higher premium than its rivals do.

b) If the premium continues to rise, low-risk individuals are less likely to buy the insurance. This will cause the proportion of high-risk customers to increase, further pushing up the premium.

Economics

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Which of the following does not affect the wages a worker earns?

a. natural ability b. effort c. chance d. All of the above affect the wages a worker earns.

Economics

The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of

a. medical advances that provide new, better, but often more expensive medical treatments. b. a rising population of the elderly in the economy. c. health insurance reform that will include government subsidies for health insurance for many low-to-moderate income families. d. All of the above are important factors.

Economics