the difference between moral hazard and adverse selection is quizlet
Moral hazard and adverse selection? Moral hazard is defined as the risk that an individual has the motivation to take bigger risks before the contract is complete. It is the idea that a person will change th â¦ eir behavior by taking more risks.
Adverse selection is when the plans that provide most generous coverage will attract individuals with the greatest need for care, leading to elevated service use and costs for those insurers independent of their efficiency in service provision.