Reclassification Risk in the Small-Group Health Insurance Market

A key question in debates over Obamacare is whether its community rating provisions are necessary to provide complete risk protection to consumers. A new study of one insurer by Anthony LoSasso and colleagues finds that the insurer did increase premiums for small employers whose expected claims were above average, but the increase in premiums only ranged from 5 percent to 43 percent of the increase in expected costs. These findings suggest that even before Obamacare, the market for small-employer coverage did a lot to protect high-cost employees from having to pay premiums that reflect their higher health risk. Come hear leading scholars on the economics of health insurance, Mark Pauly and Anthony LoSasso, discuss these findings and their implications.

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