Obamacare Fail: Law may allow employers to dump sicker employees from company plans

This is why our elected officials in Congress should read a bill before they pass it.

Via Weekly Standard:

Minnesota Public Radio reports, “A loophole in the federal health care overhaul would allow many employers to game the system by dumping their sicker employees [into] public health insurance exchanges, according to two University of Minnesota law professors.” Such “targeted dumping” of sicker employees would cause Obamacare’s taxpayer-subsidized exchanges to cost more — potentially far more — than the Congressional Budget Office (CBO) has projected. [...]

In their study, published in the Virginia Law Review, authors Amy Monahan and Daniel Schwarcz write,

“[T]here is a substantial prospect that ACA [Obamacare] will lead some, and perhaps many, employers to implement a targeted dumping strategy designed to induce low-risk employees to retain ESI [employer-sponsored insurance] but incentivize high-risk employees to voluntarily opt out of ESI and instead purchase insurance through the exchanges that ACA establishes to organize individual insurance markets. Although ACA and other federal laws prohibit employers from excluding high-risk employees from ESI, these laws do little to prevent employers from designing their plans and benefits to incentivize high-risk employees to voluntarily seek coverage elsewhere. If successful, such a targeted dumping strategy would allow employers and low-risk employees to avoid the costs associated with providing coverage to high-risk employees. . . .”

Read more here…