Question

How can a group dental insurer discourage adverse selection?

a. allow pre-existing conditions
b. eliminate deductible and coinsurance
c. extend open enrollment period
d. limit the duration of coverage

Answer 1

A group dental insurer can discourage adverse selection by allowing pre-existing conditions, extending the open enrollment period, and limiting the duration of coverage.

Step-by-step explanation:

In order to discourage adverse selection, a group dental insurer can take several measures:

• Allow pre-existing conditions: By allowing coverage for pre-existing conditions, the insurer can attract a broader range of individuals and discourage those with high risks from opting out.
• Extend open enrollment period: By extending the period during which individuals can enroll in the dental plan, the insurer gives more opportunities for healthy individuals to join and balance out the risk pool.
• Limit the duration of coverage: By limiting the duration of coverage, the insurer can discourage individuals with high risks from enrolling and dropping the coverage once their immediate needs are met.