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Saving Small Employer Health Insurance, Daniel Benjamin Schwarcz
Saving Small Employer Health Insurance, Daniel Benjamin Schwarcz
Daniel Benjamin Schwarcz
Health care reform devotes substantial attention to resuscitating the small group health insurance markets that serve employers with fewer than fifty full time employees. Unfortunately, a number of interweaving provisions embedded within the Affordable Care Act create strong incentives that, starting in 2014, will tend to undermine this market and, in the process, increase the fiscal cost of reform. First, small employers with predominantly low-income employees will tend to opt out of the small group market. Second, small employers with mixed-income employees will have strong incentives to offer coverage that is neither technically “affordable” or of “minimum value” in order …
Will Employers Undermine Health Care Reform By Dumping Sick Employees?, Daniel Benjamin Schwarcz, Amy Monahan
Will Employers Undermine Health Care Reform By Dumping Sick Employees?, Daniel Benjamin Schwarcz, Amy Monahan
Daniel Benjamin Schwarcz
This Article argues that federal health care reform may induce employers to redesign their health plans to encourage high-risk employees to opt out of employer-provided coverage and instead acquire coverage on the individual market. Although largely overlooked in public policy debates, this prospect of employer dumping of high-risk employees raises serious concerns about the sustainability of health care reform. In particular, it threatens the viability of individual insurance markets and insurance exchanges by raising the prospect of adverse selection caused by the entrance of a disproportionately high-risk segment of the population. This risk, in turn, threatens to indirectly increase the …