A health insurance company sold insurance policies that allow policyholders to obtain services from selected hospitals. The policies fully disclosed the names of these hospitals. However, the insurance company did not mention that the hospitals did not have the capability to perform certain costly procedures, such as heart bypass operations. As a result, if a policyholder one day developed a severe heart blockage, the patient would not have insurance coverage to pay for such a heart bypass procedure.

a. If the insurance company, to save money, deliberately selected hospitals that lack the capability of performing heart bypass operations, was its dis- closure of the names of the hospitals available to patients adequate?

b. If the insurance company did not deliberately select hospitals that lack the capability of per- forming heart bypass operations, but it knew that these hospitals were smaller regional hospitals that were likely to lack certain advanced capabilities, was its disclosure of the names of the hospitals available to patients adequate?

c. If the insurance company deliberated selected low-cost hospitals that lack certain capabilities and passed these reduced costs along to policy- holders, did the insurance companies act unethically?