Adverse selection may be making health insurance prohibitively expensive for the unemployed. In this negative feedback loop, rising insurance premiums cause the healthiest consumers to opt out of their plans, increasing the average risk of the pool. Insurers raise prices to offset that increased risk and the cycle begins again. Health insurance companies typically establish a standard rate, based on the average risk of the group, for a particular segment of the population. Among those who purchase individual insurance, consumers in poorer health are more willing to pay for such insurance because they have higher-than-average health care costs. Healthier consumers however, often forgo such insurance, reasoning that it is cheaper to pay directly for their lower-than-average health care costs. Among employers that offer health insurance, most obligate all employees, healthy or otherwise, to enroll in the employer's group plan. Further, because a minimum health level is often required in order to fulfill job requirements, employer group insurance plans effectively pre-screen for a minimum level of health. Insurance companies can typically charge a lower premium to these groups, based on the lower average risk of the entire employee pool, without worrying that healthy employees will opt out of the plan as individual consumers might.

The primary purpose of the passage is to

advocate for change on behalf of a particular group

make and support a claim

introduce recently discovered information

challenge a widely accepted explanation

argue that a situation is morally wrong