Unlike perfectly markets, health insurance and health care markets contain asymmetric information in many forms. To see the consequences, consider the following model The population is evenly divided between 2 types of people: healthy people and unhealthy people. Healthy people have expected health care costs at S1000per year. Unhealthy people have expected health care costs of $5000 per year. Unhealthy people can become healthy by working out, eating healthier, and taking entive care. Assume that the cost becoming healthy, in terms of time and effort is $2000 per year hese people live in a city with one employer who will hire anyone who is willing to work. This employer provides complete health care to all its employees, all health care costs are covered by the insurance, What is the actuarial fair oost of Do the employees have incentive insurance for all the workers? to become hea O Yes O Not enough information. O No What would the new actuarially fair cost of a new employer enters who pays S1500 If insurance be at the original firm? surance), which people will go and work for the new employer? O None O Unhealthy O Both O Healthy O Previous ® ove up s view 2Check Answer terms of use contact us br