previously uninsured Americans now have coverage, but the increased taxes to pay for ACA and increased deficit

spending have created significant political opposition. Whether or not that opposition eventually succeeds in

overturning the ACA remains to be seen.

Access for free at openstax.org
16 • Key Terms 403

Key Terms

adverse selection when groups with inherently higher risks than the average person seek out insurance, thus

straining the insurance system

asymmetric information a situation where the seller or the buyer has more information than the other

regarding the quality of the item for sale

coinsurance when an insurance policyholder pays a percentage of a loss, and the insurance company pays the

remaining cost

collateral something valuable—often property or equipment—that a lender would have a right to seize and sell

if the buyer does not repay the loan

copayment when an insurance policyholder must pay a small amount for each service, before insurance
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