When Greg Ptacek made the leap from employee to independent contractor three years ago, he struggled to find affordable health care. Even though he didn't have any preexisting medical conditions, the Los Angeles marketplace offered nothing in Ptacek's budget for his profile as a 48-year-old married man.
"I could only afford plans that consisted of bare-bones, catastrophic medical insurance," Ptacek says. "I had to absorb all out-of-pocket expenses for medical care."
But with Covered California, California's new health insurance exchange, he'll now receive coverage for preventative care. "It's better than the employee-provided insurance I had previously," Ptacek says. "What's more, I have the peace of mind in knowing that it's a plan that's not going away next year because someone at the insurance company is having a bad day."
The Affordable Care Act and government-run health insurance plans are expected to provide millions of uninsured Americans with access to affordable health care. For small-business owners, independent contractors and entrepreneurs, the ramifications are significant. Preexisting conditions and health insurance costs will no longer be the barrier that they once were to starting a business.Â
Enabling Freelancers
After leaving his last job, Walter G. Meyer had been doing well enough as a freelance writer to support himself financially. When his COBRA plan ran out last summer, he went on the hunt for new insurance.
"I shopped for insurance and found that due to my preexisting condition—too many knee surgeries—the cheapest insurance I could get was $897 per month," Meyer says. "It was so prohibitively expensive that I couldn't afford it."
Even though he preferred to keep building his freelance business and had several paying projects in the works, he began looking for a full-time job just to have affordable health insurance.
After joining with his local state exchange, according to Meyer, "My rates starting January 1 will be very affordable—$142 a month—for better coverage than I've ever had in my life."
Boosting Demand for Entrepreneurship
Rob Biederman, co-founder of Hourly Nerd, believes that Obamacare will help boost employer demand for project-driven talent. He says he's seen a positive uptick in his business, a marketplace that connects small and mid-sized businesses with top MBA students and graduates for part-time, freelance consulting projects.
"While some companies are hiring, others are anxious about the costs and the unknowns of the Affordable Care Act and have instituted hiring freezes," Biederman explains. "Some of those companies that are freezing full-time hires are turning to us to supply part-time and freelance workers."
An increasing demand for workers has the potential to boost entrepreneurship. When high-performing employees realize they can find higher paying, more-meaningful work through self-employment—without the risk of losing affordable health-care coverage—they'll have a stronger incentive to start their own companies.
Looking Past The Controversy
It's an understatement to say that the Affordable Care Act is controversial. But political debates aside, the fact is simple: The inability to find affordable health insurance may no longer be a hurdle to business startup. Would-be entrepreneurs can now jump into the startup pool knowing they'll have access to affordable, quality health care.
"My decision to find a job was not based on [a lack of freelance] opportunities or available work," Meyer says. "It was very much due to my not being able to get health coverage. In six weeks, I'm set to get health care." And with that opportunity, Meyer has been able to carry on freelancing, his preferred form of financial support.
Ritika Puri is a writer specializing in business, entrepreneurship, marketing and quantitative analysis. She has written for Forbes, Investopedia, CrazyEgg, Unbounce, the Contently Blog, the SAP Innovation Blog and others.
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