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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 …