Health Care Administration Practice Exam 2026 – Complete Study Resource

Adverse selection describes the situation where the people who are more likely to need health care enroll in a plan, shifting the insured population toward higher-risk individuals. That higher-risk mix means more health services are used and overall costs rise for the plan. The term specifically captures how a population characteristic—in this case, higher health risk—drives increased utilization and costs. The other terms refer to different ideas: alliance is about cooperation between groups, advocacy is about supporting patients, and access concerns the ability to obtain care. They don’t explain why a population’s risk profile would lead to higher use and costs.