The solution of the Affordable Care Act (Obama Care) to the adverse selection
problem was to force everyone (whether sick or health) to buy health insurance or
pay a penalty for not buying it.
O True
O False



Answer :

Final answer:

The Affordable Care Act (ACA) implemented an individual mandate to address the adverse selection problem in health insurance markets by requiring all individuals to buy health insurance or pay a penalty.


Explanation:

True

Under the Affordable Care Act (ACA), also known as Obamacare, an individual mandate was implemented to address the adverse selection problem in health insurance markets. This mandate required all individuals to purchase health insurance or face a penalty if they did not, aiming to ensure a mix of healthy and sick individuals in the insurance pool and stabilize prices.

The goal of this mandate was to prevent adverse selection, where only high-risk individuals opt for insurance, leading to higher costs. By mandating insurance coverage for all individuals regardless of health status, the ACA sought to create a balanced risk pool and promote affordability in the health insurance market.


Learn more about Individual mandate under the Affordable Care Act (ACA) here:

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