After hitting his head on a wall, Andy tries to seek medical help, but it turns out that he hasn’t had health insurance for the past two years. He casually explains that he didn’t think he needed it unless something bad happened. His misunderstanding of how insurance works leads to financial vulnerability when care is suddenly needed.
Andy’s situation illustrates issues of adverse selection (healthy people opting out of insurance) and moral hazard (people taking more risks because they’re insured or not getting insured because they misjudge their risk).
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