Final answer:
To address adverse selection, health insurance in the U.S. is often provided through employer-sponsored groups or state-sponsored health exchanges under the ACA. The ACA expanded coverage and aimed to create balanced risk pools, but many Americans, especially those with lower-paying jobs or working for small companies, remain uninsured.
Step-by-step explanation:
In the United States, addressing the issue of adverse selection in the health insurance market is done primarily through employer-sponsored groups or via state-sponsored health exchange markets under The Affordable Care Act (ACA or Obamacare). One of the challenges faced by the insurance industry is balancing the risk pool, ensuring that there is a mix of individuals with high and low health risks. The ACA made strides in increasing health coverage by mandating that all Americans purchase health insurance and preventing providers from denying coverage based on pre-existing conditions.
Despite these improvements, many Americans, particularly those in low-paying jobs or with small employers, still lack access to employer-provided health insurance. Government programs like Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) help to fill these gaps, yet a significant number of Americans remained uninsured. The ACA's creation of health care exchanges and the expansion of Medicaid in some states aimed to increase access to healthcare for those who did not have employer-provided insurance, were not eligible for Medicare or Medicaid, and to create large, balanced risk pools.
Particularly, the ACA's individual mandate sought to prevent the issue of adverse selection by broadening the insured population to include healthy individuals who might otherwise opt-out, thus supporting the financial viability of health care exchanges.