James has to take an expensive prescription to manage a chronic medical condition. His employer offers several different health insurance plans with the more expensive "Elite" plan having the lowest annual deductible and prescription co-pays. Employees like James, who expect high medical expenses are more likely to select the Elite plan. If the insurer did not anticipate this outcome and price premiums accordingly, the result would be:

• morale hazard

• imperfect information

• inefficiency

• adverse selection

• moral hazard

James has to take an expensive prescription to manage a chronic medical condition. His employer offers several different health insurance plans with the more expensive "Elite" plan having the lowest annual deductible and prescription co-pays. Employees like James, who expect high medical expenses are more likely to select the Elite plan. If the insurer did not anticipate this outcome and price premiums accordingly, the result would be: O morale hazard O imperfect information O inefficiency O adverse selection O moral hazard