adverse selection

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Related to Antiselection: Adverse selection

Adverse Selection

Clinical genetics An event in which an insurer avoids underwriting a person whose genetic profile indicates a high chance of suffering an "expensive" condition in the future—e.g., Huntington’s disease (Armed with such information, an insurance carrier may deny coverage—i.e., adversely select—a person with a high risk of suffering the disease in question; alternatively, that person may take out a large insurance policy on standard terms).
Health insurance The tendency of those with greater-than-average health risks to apply for, or maintain, insurance coverage.
Managed Care
(1) A stance adopted by health care insurers, which fiercely compete among themselves to insure the healthiest and wealthiest segment of a particular population, and thus adversely select the population which they target for selling insurance policies.
(2) The selection of a health plan, whether indemnity or managed care, over other plans by those enrollees who are more likely to file claims and use services, causing an inequitable proportion of enrollees requiring more medical services in that plan.

adverse selection

Managed care
1. A stance adopted by health care insurers, which fiercely compete among themselves to insure the healthiest and wealthiest segment of a particular population, and thus adversely select the population which they target for selling insurance policies. See 'Safety net' hospital.
2. A health plan, whether indemnity or managed care, is selected over other plans by enrollees who are more likely to file claims and use services, causing an inequitable proportion of enrollees requiring more medical services in that plan.

adverse selection

The enrollment in a health plan of those who are sicker or use more health care services than the general population.
See also: selection

adverse selection,

n a statistical condition within a group when there is a greater demand for dental services and/or more services necessary than the average expected for that group.
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References in periodicals archive ?
The Conning Research study, "Arbitrage and Antiselection in Life Insurance: The Information Opportunity," identifies specific threats and opportunities to the industry, quantifies the possible impact, and analyzes what companies can do to prosper in this new environment.
Camm explains that antiselection can quickly skew risk assessment in underwriting.
There has, however, been a more subtle cost to the plan, and to the plan sponsor - antiselection.
On the other hand, online taking of risk histories is, in my view, Inadvisable for fully underwritten products, unless, of course, said products have been priced (into sales obscurity) to pacify actuarial apprehension for florid antiselection and its aftereffects.
His areas of concentration include antiselection, appraisals, strategic planning, model-based analyses, risk-based capital, regulation and reform.
This underwriter would broadly define antiselection as a state that exists when the proposed insured is aware of facts in his health habits (or lack thereof), medical history, avocations, and other scenarios that are intentionally not disclosed at the time of application.
Thus, in addition to precluding whole life and other more complicated forms of insurance, we do not allow for stochastic mortality rates or antiselection effects that might complicate the insurance purchase problem.
Companies also should consider how changing their underwriting requirements might influence the risk of antiselection and how antiselection may change the frequency of an impairment among those applying for insurance.
Much discussion of risk classification is concerned with the phenomenon of adverse selection or antiselection.