Final answer:
Group-rated health insurance is designed for groups with constantly changing composition and helps insurers balance risks by covering individuals with varying health profiles.
Step-by-step explanation:
The type of health insurance issued to cover a group who may be exposed to the same risks, but where the composition of the group is constantly changing, is group-rated (c). Group-rated insurance plans are commonly provided through an employer and include a mix of individuals with varying health risks.
This approach helps to mitigate adverse selection problems by balancing out the risk among those with higher chances of requiring health services and those with lower chances. In many cases, small companies may not provide health insurance, which can present challenges for individuals seeking coverage. Additionally, when an insurer charges a single actuarially fair premium to the entire group rather than adjusting it for separate risk groups, this can lead to issues with risk assessment and financial sustainability for the insurer.