Which of the following statements about health insurance is FALSE? A. People use insurance to reduce their risk of having very large medical expenses. B. Insurance plans with different premiums and deductibles let you decide how much financial loss you are willing to risk C. Paying for health insurance is always cheaper than paying for your own medical expenses. D. None of the above.

Question

Which of the following statements about health insurance is FALSE? A. People use insurance to reduce their risk of having very large medical expenses. B. Insurance plans with different premiums and deductibles let you decide how much financial loss you are willing to risk C. Paying for health insurance is always cheaper than paying for your own medical expenses. D. None of the above.

Answer 1

C. Paying for health insurance is always cheaper than paying for your own medical expenses.

Answer 2

Health insurance is designed to mitigate financial risk associated with significant medical expenses. While statements A and B accurately describe aspects of health insurance—for example, A correctly states that insurance is used to reduce the risk of large medical expenses, and B rightly describes the variability in premiums and deductibles affecting personal financial risk—statement C is incorrect. Paying for health insurance can sometimes be more expensive than paying out-of-pocket for minor medical expenses, particularly if the insured does not utilize many medical services. Lastly, D is not applicable as it assumes all given statements are true.

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