A particular health plan, whether indemnity or managed care, is selected against by the enrollee, and thus an inequitable proportion of enrollees requiring more medical services are found in that plan. Example: Low en4rollee out-of-pocket costs might lure those individuals requiring more health services into an HMO rather than an indemnity plan because the former does not have a deductible. Therefore, the HMO would have a greater proportion of less-healthy enrollees, thereby driving up costs and increasing financial risk.

The tendency for insurance to be purchased only by those who are most likely to need it, thus raising its cost and reducing its benefits.

The tendency for those most at risk to be those most likely to buy insurance.... more on: Adverse selection

The tendency of people who have a greater-than-average likelihood of needing health care to seek healthcare coverage to a greater extent than individuals who have an average or less-than-average likelihood.

The tendency of people with a greater-than-average likelihood of loss to apply for or continue insurance to a greater extent than do other people.

Occurs when a party to a transaction holds information not available to you regarding the value of a transaction. The term is used in insurance when people with a high probability of filing a claim withhold significant information regarding their risk profile from the insurance underwriter, thereby affecting the price the underwriter sets for the policy. An example would be someone who smokes and does not tell the insurer to whom an application for a life insurance policy is being made.

The tendency of persons with poorer-than-average health expectations (higher risk) to apply for or continue insurance coverage to a greater extent than persons with average or better-than-average health expectations (lesser risk).

The tendency of an individual to recognize his or her health status in selecting the option under an insurance plan that tends to be most favorable to him or her (and more costly to the plan). In insurance usage, a person with an impaired health status or with expected medical care needs applies for insurance coverage financially favorable to himself or herself and detrimental to the insurance company.

Also known as anti-selection, this is the tendency of persons to choose health options that are financially most beneficial to them (and least beneficial to the health plan) in light of their known physical conditions. Those with known health problems elect more insurance and healthy persons elect less or no coverage.

The process by which risks not contemplated by the insurer become insured. The tendency for poorer-than-average risks to continue insurance or to initially enroll in an insurance plan. The expectation is that such risks will experience heavy claims experience to the detriment of the plan. Employees or retirees opting to continue insurances on a self-pay basis would likely fall under this poorer-than-average risk group.

Situation in which insurance companies find that a disproportionately large share of their customers come from high-risk groups.

Occurs when the applicants for insurance represent a sample of the population that is biased toward those with a greater loss exposure rather than a true random sample. In flood insurance, those persons and businesses with serious flood exposures are likely to purchase flood insurance.

Persons poorer-than-average health (or health expectations) tend to apply for greater insurance coverage than do persons in average or better health.

The tendency of people who know that they have a greater-than-average chance of loss to seek insurance or more than an average amount of insurance.

A tendency which occurs when a person makes a decision based on his/her diminished health condition or frequency of needed treatment and is, therefore, considered a poorer claims risk than most others in the group.

The tendency for people with greater needs to be more likely to sign up for insurance, or to enroll in one plan over another, resulting in a health insurance pool containing a disproportionate share of people with medical conditions. Such a situation leads to higher premiums, which will drive healthier people out of the pool.

A situation in which those on the informed side of the market self-select in a way that harms the uninformed side of the market.

Advising bank Advisory letter Affidavit of Loss

Situation in which only higher-risk employees select and use certain benefits.

When a payer has a disproportionately large share of high-risk enrollees (i.e., those with high service use and high costs) due to offering relatively generous benefits for certain types of care; to avoid adverse selection, some plans limit coverage of certain services.

The tendency for higher-risk banks to opt for deposit insurance and lower-risk banks to opt-out of deposit insurance when membership in a deposit insurance system is voluntary.

The tendency of persons who present a poorer-than-average risk, to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss. An insurance company that experiences adverse selection will also experience poor financial results.

The tendency of persons with higher risk health expectations to apply for or continue insurance coverage to a greater extent than persons with lesser health expectations.

The reason why many insurance companies would rather go to you than have you come to them. People with poor health are more apt to apply for or continue insurance than those with average or better-than-average health expectations.

The process by which an insurer is left with a disproportionate share of unwanted, higher-risk business. Particularly common in the life and health lines, adverse selection can occur when higher-than-expected claims experience leads an insurer to raise rates, which in turn causes the migration of "good" risks to companies charging less. Adverse selection may be attributable to improper underwriting and risk selection by the insurer or by superior knowledge of the risk by the insured. Among applicants for a given group or individual program, the tendency for those with an impaired health status, or who are prone to higher-than-average utilization of benefits, to be enrolled in disproportionate numbers and lower deductible plans.

The tendency of less favorable insurance user to seek or continue insurance to a greater extent than others.

When those with below average health conditions make application for or continue health coverage to a greater extent than those with average or better health

Situation where a health care organization has a disproportionate share of high utilizing, high risk recipients and/or expensive-to-treat enrollees.

Occurs when those insured select coverages that are most likely to have losses.

principle that says that those who most want to buy insurance tend to be those most at risk, but charging a high price for insurance (to cover the high risk)will discourage those at less risk from buying insurance at all

The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all, as in the case of floods. (Flood insurance is provided by the federal government but sold mostly through the private market.) In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance works best when risk is shared among large numbers of policyholders.

The problem of attracting members who are sicker than the general population, specifically, members who are sicker than was anticipated when developing the rates of reimbursement for medical costs.

Tendency of those who are poorer-than-average health risks to apply for, or maintain, insurance coverage.

The tendency of poorer than average risks to buy and maintain insurance. Adverse selection occurs when insureds select only those coverages that are most likely to have losses. (G)

Plan enrollees include a higher percentage of high risk enrollees than the percentage of high risk persons in the average population, resulting in the potential for greater utilization of health care services, and higher expenses, than estimated for an average population.

The tendency for people requiring more medical attention to more likely sign up for insurance. This results in a health insurance pool containing a disproportionate share of people with medical conditions, and leads to higher premiums that drive healthier people out of the pool.

A health plan’s tendency to have a larger proportion of individuals who are more likely to file claims and use services because of their poor health risk, while persons with better health enroll in other plans.

The tendency for people to enter into agreements in which they can use their private information to their own advantage and to the disadvantage of the less-informed party.

The insuring of one or more risks with a higher chance of loss than that contemplated by the applicable insurance rate. The selection of such risks is adverse because the rate is inadequate. Also called anti-selection.

Selection against the insurance company. It is the tendency for those who know that they are highly vulnerable to specific pure risks to be most likely to acquire and to retain insurance to cover that loss.

The phenomenon of the enrollment of a disproportionate percentage of persons who are poorer risks--that is, persons who are more ill, more prone to suffer loss, or to make claims--than the average person.

The tendency of higher risk persons or groups to seek coverage more than less risky persons or groups, for example, people with poor health applying for individual coverage while those with excellent health do not.

The tendency of persons, because of their known physical condition, to choose health options that are most beneficial financially to them and least beneficial to the health care program or insurer. Healthy people generally choose less or no health insurance. Those people with known health problems, on the other hand, select more insurance, creating an inequitable proportion of enrollees needing more medical services in a particular plan. Adverse selection is also known as antiselection.

Same as Selection against the insurer.

the tendency of insureds with a greater than average chance of loss to purchase insurance.

Tendency of persons with a higher-than-average chance of loss to seek insurance at standard (average) rates, which, if not controlled by underwriting, results in higher-than-expected loss levels.

the risk that someone who expects to need the insurance is more likely to buy it than others, thus negatively skewing the company's claims experience - e.g., in an open enrollment for group health insurance, all unhealthy people might enroll, while many healthy ones might not.

A tendency for a person to make a decision based on his/her diminished health condition or frequency of needed treatment and who is, therefore, considered a poorer claims risk than most others in the group.

a category of policyholders most likely to suffer loss or to make more than an average number of claims ‹t‘I‘ði•ÛŒ¯‰ïŽÐ‚©‚ç‚Ý‚ÄŠ1/2Œ}‚Å‚«‚È‚¢A‚·‚È‚í‚¿•ÛŒ¯Ž–ŒÌ”­¶—¦‚̍‚‚¢ŠëŒ¯‚قǁA•ÛŒ¯Œ_–ñŽÒ‚ª•ÛŒ¯‚ð‚©‚¯‚悤‚Æ‚·‚éŒXŒüj

One of the following: Occurs when premium doesn't cover cost. Some populations, perhaps due to age or health status, have a great potential for high utilization. Some population parameter such as age (e.g., a much greater number of 65-year-olds or older to young population) that increases the potential for higher utilization and often increases costs above those covered by a payers capitation rate.

Adverse selection or anti-selection is a term used in economics and insurance. On the most abstract level, it refers to a market process in which bad results occur due to information asymmetries between buyers and sellers: the "bad" products or customers are more likely to be selected. A bank that sets one price for all its checking account customers runs the risk of being adversely selected against by its high-balance, low-activity (and hence most profitable) customers.