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Assumethatahealthypersonhas10percentchanceofgettingsick,requiring$40,000inmedicalexpenses.Supposeanobesepersonhasa60percentriskofbeingsick,costing$100,000inmedicalcosts.Whatwillastableindividualbedoinganactuarilyequalpremium?Whatwouldanunhealthypersonreceiveanactuarilyfairpremium?Ifeverybodyhastopurchasehealthinsurance,and20percentofthepopulationisunhealthy,and80percentofthepopulationissafe,whatwouldbeanactuarilyreasonablepremiumforanyindividual?

Assumethatahealthypersonhas10percentchanceofgettingsick,requiring$40,000inmedicalexpenses.Supposeanobesepersonhasa60percentriskofbeingsick,costing$100,000inmedicalcosts.Whatwillastableindividualbedoinganactuarilyequalpremium?Whatwouldanunhealthypersonreceiveanactuarilyfairpremium?Ifeverybodyhastopurchasehealthinsurance,and20percentofthepopulationisunhealthy,and80percentofthepopulationissafe,whatwouldbeanactuarilyreasonablepremiumforanyindividual?

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