CMFAS HI Pricing & Underwriting question: anti-selection and moral hazard in Health Insurance

Answer: D. A high level of participation in a voluntary group plan increases anti-selection

The false statement is that a high level of participation in a voluntary group plan increases anti-selection. It is LOW participation that increases anti-selection, because a higher-than-normal proportion of members with health issues enrol; high participation brings a good mix of healthy lives and reduces anti-selection. The other three statements are true: they correctly describe anti-selection, the underwriter's gatekeeper role, and how deductibles and co-insurance curb over-utilisation and moral hazard.