Uncertainty and insurance An unforeseen broken leg or heart attack can suddenly create demand for expensive health care services. Because most people are risk averse,health- related uncertainty motivates individuals to demand health insurance. This in turn creates problems that arise in insurance markets:adverse selection and moral hazard. These two phenomena are what make health policy really difficult(and really interesting). Bhattacharya,Hyde and Tu-HealthEconomics Bhattacharya, Hyde and Tu – Health Economics Uncertainty and insurance  An unforeseen broken leg or heart attack can suddenly create demand for expensive health care services.  Because most people are risk averse, health￾related uncertainty motivates individuals to demand health insurance.  This in turn creates problems that arise in insurance markets: adverse selection and moral hazard.  These two phenomena are what make health policy really difficult (and really interesting)