Health-insurance premiums have increased and been accompanied by higher deductibles, which means that out-of-pocket costs have increased. Some say higher out-of-pocket costs lower prices and send buyers to efficient healthcare providers. Others say higher out-of-pocket costs puts quality healthcare out of reach for those with lower incomes.

1. How do larger deductibles and larger out-of-pocket costs change the incentives that people face in the market for health insurance?

2. How do larger deductibles and larger out-of-pocket costs influence adverse selection and moral hazard in the market for health insurance?