Question

Morale Hazard is the phenomenon that occurs when there are not enough patients in a managed care plan to support the P/L.

true or false

Answer 1

Answer: False

Morale hazard is a term used in correspondence to the insurance field . It describes the attitude of an insured person towards his belongings. It refers to the indifference towards towards loss as it is covered by insurance. It is irrespective of the number of clients insured. Example is not being bothered about an equipment being damaged or price hike for a health care service as it is covered under the insurance plan.

Moral hazard is an entirely different term which describes a conscious change in behavior to attain gain. For example doing risky activities after taking an insurance with the thought that in case an unfavorable events occurs the cost will be covered by insurance company.