ERISA, Agency Costs, and the Future of Health Care in the United States

36 Pages Posted: 31 Mar 2008 Last revised: 17 Aug 2010

See all articles by John Bronsteen

John Bronsteen

Loyola University Chicago School of Law

Brendan S. Maher

Texas A&M University School of Law

Peter K. Stris

Whittier Law School; Stris & Maher LLP

Abstract

Because so many Americans receive health insurance through their employers, the Employee Retirement Income Security Act of 1974 (ERISA) plays a dominant role in the delivery of healthcare in the United States. The ERISA system enables employers and insurers to save money by providing inadequate healthcare to employees, thereby creating incentives for these agents to act contrary to the interests of their principals. Such agency costs play a significant role in the current healthcare crisis and require attention when considering reform. We evaluate the two major healthcare reform movements by exploring the extent to which each reduces agency costs. We find that agency cost analysis clarifies the benefits, limits, and uncertainties of each approach.

Keywords: ERISA, agency costs

JEL Classification: K19

Suggested Citation

Bronsteen, John and Maher, Brendan S. and Stris, Peter K., ERISA, Agency Costs, and the Future of Health Care in the United States. Fordham Law Review, Vol. 76, p. 2297, 2008, Available at SSRN: https://ssrn.com/abstract=1114670

John Bronsteen (Contact Author)

Loyola University Chicago School of Law ( email )

Chicago, IL 60611
United States
312-654-1511 (Phone)
312-915-7201 (Fax)

HOME PAGE: http://www.luc.edu/law/fulltime/bronsteen.shtml

Brendan S. Maher

Texas A&M University School of Law ( email )

1515 Commerce St.
Fort Worth, TX 76102
United States

Peter K. Stris

Whittier Law School ( email )

3333 Harbor Blvd.
Costa Mesa, CA 92626
United States

Stris & Maher LLP ( email )

1920 Abrams Parkway, #430
Dallas, TX 75214
United States

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