“Will health care reform lead 1.5 million Americans to become self-employed next year?
Researchers from the Urban Institute and Georgetown University think so. They’ve concluded that the reforms under the Affordable Care Act will end “job lock” — people staying with their current employer just for the health coverage — and encourage folks to strike out on their own.
Beginning next year, insurers won’t be able to deny coverage to individuals because of pre-existing conditions or charge higher premiums because of an individual’s health status. Plus, the federal government will provide subsidies to low- and moderate-income individuals to help them purchase health insurance.
“By ensuring that people can’t be discriminated against when they buy health insurance and helping those with modest incomes cover the cost of premiums, the ACA could help create a new generation of self-employed entrepreneurs,” said Andy Hyman, who heads health coverage programs at the Robert Woods Johnson Foundation. “Having access to affordable insurance on the open market is what millions of people need to become their own boss.”
That’s what proponents of health care reform have been saying ever since Congress starting debating the legislation in 2009.
But how did the foundation come up with the 1.5 million number? They cite a previous study that shows that people are less likely to start their own businesses if they don’t have a spouse with employer-based insurance and a family member in bad health. American. Plus, this study found that becoming eligible for Medicare coverage increases the likelihood that Americans will start businesses when they turn 65. They used these findings, and other research, to calculate how many additional Americans would become self-employed due to health care reform.
Any projection involves a lot of assumptions, so take this estimate with a grain of salt. The jury is still out on how affordable health insurance will be next year, once all of the Affordable Care Act’s reforms kick in. Critics contend the law will jack up premiums, thanks to new taxes on health insurers and requirements for policies to provide richer benefits.
If that occurs, many of these would-be entrepreneurs might stick with their current jobs, because they still won’t be able to afford insurance on their own.”