Final answer:
Managed-care health plans like HMOs usually offer fewer choices and are lower priced compared to fee-for-service health plans. These plans restrict patients to a network of providers and emphasize prevention. Adverse selection affects insurance markets by creating imbalances in risk assessment between buyers and the insurer.
Step-by-step explanation:
True or False: A managed-care health plan generally offers you more choices at a lower price. This statement is generally false. A managed-care health plan, like an HMO (Health Maintenance Organization), often provides fewer choices in terms of healthcare providers and services compared to fee-for-service health plans. However, they do tend to be lower priced. Managed-care plans require patients to choose providers within a prescribed network and typically focus on prevention and wellness.
Under a fee-for-service system, healthcare providers are reimbursed for each service they perform, usually allowing for a broader selection of providers and services, potentially at a higher cost. Adverse selection can complicate insurance markets, as it entails a scenario where there is an imbalance in understanding the risks between the insurance buyers and the company, leading high-risk individuals to opt for insurance that seems favorable while low-risk individuals might avoid overpriced options.