Health insurers face financial risks when they assume liability for the difference between difference between premium revenues and their estimates of future claims costs for a group. Market reform proposals vastly increase the amount of risk health plans of all types will face. A case study is used to show how insurers bidding in an alliance environment must either commit contingency reserves to cover these risks, increase premiums to reduce them, or forgo the business. Unless legislation includes measures that reduce these risks or enable health plans to carry them, premiums are likely to increase greatly.