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They're essential to insurance being a good idea to purchase.
People are certainly avoiding getting legal jobs and working under the table so they can continue to collect welfare payments.
In theory, yes, but have you ever questioned an insurance company's underwriting standards before purchase?
And those people are prosecuted for fraud. Here in PA, the OIG has an entire section dedicated to public benefits fraud that prosecuted between 30 and 100 cases per month, most of them felonies, most of them for making these exact kinds of misrepresentations regarding eligibility requirements. The liberal appointees running these agencies don't shy away from this, and they talk in press releases about how fraudsters divert funding from people who actually need it. People complain about welfare queens that they know, but if they have specific knowledge of fraud they should report it, just as they would any other crime, not complain about it on the internet.
This is just an anecdote, but my father happened to work in another state's equivalent department, and he once (three or four years ago, I think) complained to me about how his bosses would regularly fail to prosecute the fraudsters that it was his job to uncover. IIRC, he said that over multiple years he nagged his bosses to prosecute one particular person, and eventually the culprit was diagnosed with cancer and his bosses used that excuse to close down the investigation as bad PR.
But this was in a different state, and he may be biased against the department. But on the third hand it's the same state as @The_Nybbler's.
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I haven't actually purchased any insurance I wasn't required to.
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