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__________ better to be rich and healthy than poor and sick.
Its can only appear after a singular non-human noun from which it derives its meaning. Since the missing word is the first word we encounter, there is no such noun (there is nothing) before it. Thus, its cannot be the correct answer.
The correct answer is it's, a shortened way of writing it is.
It is better to be rich and healthy than poor and sick.
I don't know