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Affordable Care Act may free some from working for health insurance

There are lots of predictions the Affordable Care Act will force employers to lay off employees, reduce hours, and cut seasonal positions. But a report released Monday from the National Bureau of Economic Research finds that up to nearly 1 million workers may voluntarily leave their jobs because of the new health care law.

For empirical evidence of this, the authors point to something dramatic that happened in Tennessee back in 2005. Finances forced state officials to kick 170,000 people off the Medicaid program, which primarily serves low-income residents.

“That’s the largest disenrollment in the history of Medicaid. So this was a pretty big change,” says Tal Gross, a health economist at Columbia and co-author.

What happened next, says Gross, is critical to understanding the potential impact of the Affordable Care Act.

“Roughly half of the people who lost public coverage, regained private coverage through an employer,” he says.

That’s right, people went back to work just so they could have health insurance. Gross believes we’ll likely see the exact opposite under the Affordable Care Act with about 900,000 people leaving their jobs. That’ll happen because for some, the option of subsidized insurance is better than work.

Economist Joe Antos with the American Enterprise Institute says this is a kind of test for the Affordable Care Act.

“If we see over time, that people do in fact migrate from employers, then that’s a pretty good indicator that things worked out well,” he says.

Antos says leaving a job behind is a sign there are affordable insurance options out there. But he says it also means so-called able-bodied adults will get taxpayer subsidized health coverage, when they could be at work.

“The question I think we have is what is the cost to taxpayers, what is the cost to society,” he says.

This report though, gets at something bigger. The Affordable Care Act weakens the bond between your job and your health insurance. MIT economist Amy Finkelstein says it’s hard to make good choices with those two linked.

“It’s like, let’s take a crazy example, suppose we said you know the only way you get food is you have to work 20 hours a week as a Marketplace reporter," Finklestein says. "You’d be better off if you could choose them separately. Some people like to be Marketplace reporters and some people don’t. Most people, though, do want food,” she says.

This report makes it clear the new law gives people choices they didn’t have before.

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.
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So let's see ... we have a dearth of jobs (regardless of what the H1B pimps say), and this law will give some folks who have jobs - presumably "senior" workers who are otherwise ready to retire, but haven't because because they haven't been able to buy an individual policy - an incentive to quit, thereby opening up a position for some younger un- or under- employed worker. Sounds good to me!

I personally was able to turn down a "permanent" position at a company where I am contracting because my state was proactive about setting up some provisions before they were required. My COBRA was running out and I couldn't find affordable individual care until the new state options kicked in. As a contractor, I'm making 25% more than was offered for the permanent position, even taking the $480/month health care premium into account. And as a contractor, I get paid for every hour I work. Compared to my last "permanent" position, which required at least 10/hrs per day, plus they expected me to be on call all weekend, the Affordable Care Act has been a Godsend. Those hours, by the way, were required because the company had laid off so many others and expected the remaining employees to take up the slack. And then I eventually got laid off. I do see more people leaving jobs because of the Affordable Care Act, but not to stay home and collect benefits. I think it will prove to be one of the greatest boosts to entrepreneurship that this country has ever had.

The largest organizations are the ones that are able to offer the best medical insurance to their employees. They often get the best deals from private insurance companies due to sheer volume if nothing else. Smaller businesses have a harder time competing for affordable health insurance for their employees. Individuals get the worst deal.

One major decision people must make when deciding whether to start a business or work as a freelancer is what to do about health insurance. Perhaps here in the U.S., we would have more growth and innovation if so many people didn't find themselves corporate slaves to their company's medical insurance.

There are also many people who can't get insurance through their employer because of how they are classified (part-time, casual, temporary) or because their company simply can't offer insurance. Do they, then, need to abandon those jobs and find ones that can offer medical insurance?

I can speak as someone who has worked full-time hours for years in such a position, ironically, at a very well-funded non-profit hospital where I couldn't possibly afford care for myself or my child, and have had to face the opposite problem. Should I leave my job so as to be eligible for state insurance?

This has got to be one of the most unprofessional, unsubstantiated pieces of health care coverage I've heard in a long, long time. Taking figures from the state of Tennessee (hardly representative of the country as a whole) and drawing conclusions based on some economic "theories" without providing any data is simply nonsense. How about I pose a much different scenario that doesn't fit the "pro business side" pointed out in this piece:

When the ACA was being hotly debated I asked a friend of mine who owns a small manufacturing business what he thought about "portable" health care options for his employees. His answer was swift and to the point: "It's the worst possible scenario for me because I wouldn't be able to keep my employees as long as I do now. I use health care to attract people and it's what keeps many of them working for me." OF COURSE when I asked him if he simply paid his employees more (a good incentive) within a system where employees had "choices" for their own health care, he just shrugged it off. Basically, he's typical. He would rather his employees be his indentured servants with no options.

As others have pointed out on this thread already: employers don't want employees to have choices. This way they can perpetuate the master/slave relationship that exists between companies and their workers. Anyone who has studied the history of health coverage in the U.S. knows that employer-based coverage is not necessarily "the" only system, it just happens to be what emerged during WWII. As is usually the case, when economists make predictions about things, they're usually wrong and (as it seems in this case) grinding an agenda based on the agendas of their benefactors.

Since the state of Tennessee has this large data base, how about doing something "evidence-based" AND honest with it? For example, a survey showing how many people are staying out of paid work to look after small children or aging, ill relatives? Thus keeping them out of nursing homes and daycare subsidized by taxpayers? Somehow, no-one seems interested in monitoring and data collection on longer term benefits. And if (gasp!) poverty-level employers actually had to pay a living wage to retain decent workers?

I am one of those who has resigned because of this law.

My husband is retired in his early 60's and due to a heart attack was "un-insurable at any cost". As an accountant I was trapped working for a business that required 50 hour weeks in the slow season and even more during the busy season. Because of my skills we could afford for me to do contract work but we couldn't chance going without benefits.

Now I am liberated. I can work on my terms! I am no longer a serf tied to the corporate manor. This law will change the relationship between employer and employee and at least for us knowledge workers it will be for the better.

If the Afforable Care Act has the added benefit of increasing social mobility by breaking people free of being enslaved to a job that offers less than enough money to live on and little to no health coverage, I say hip-hip hurrah! Social mobility has taken a huge hit in the last few years.

I am a big fan of providing healthcare to those who have limited or no access, and I think requiring people to have health insurance is not too far different from requiring people to have motor vehicle insurance. That being said, there have been a few details of the Affordable Care Act that have turned me off. But to hear an economist who portrays himself as knowledgeable about the relationship between healthcare and the economy say that people leaving their jobs to take advantage of healthcare subsidized by my tax dollars is an "indicator that things worked out well" is outrageous. I know there are some people that truly need public assistance and are not getting it, but we should not be making public assistance programs that are better options than a job. I used welfare and food stamps for a short period when I needed it, and I was grateful for the support for a few months while I got back on my feet. I found a job asap (with no health insurance), and later went back to school (where i was able to get student health insurance). Now I'm a father, engineer, and first-time homeowner. I don't wish to take that opportunity away from people who need it. But I'm sickened by how easy we make it for people to take advantage of these programs. And I'm sickened by the idea that trying to help people may turn into encouraging them to free-load off of me and you. It's a really hopeless feeling to realize that even the politicians and programs I support are only bending us all over a different side of the barrel.

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