Implications of Asymmetric Information The Market for Insurance Medical Insurance Question Is it possible for insurance companies to separate high and low risk policy holders? o If not, only high risk people will purchase Insurance Adverse selection would make medical insurance unprofitable Chapter 17 Slide 9Chapter 17 Slide 9 Implications of Asymmetric Information Medical Insurance ⚫ Question ◆Is it possible for insurance companies to separate high and low risk policy holders? ⚫ If not, only high risk people will purchase insurance. ⚫ Adverse selection would make medical insurance unprofitable. The Market for Insurance