Reform law’s backers say it boosts economy by freeing ‘job lock;’ foes cite estimate that it will make some drop out of job market

As the Patient Protection and Affordable Care Act’s second enrollment period gets underway, supporters of the law say it boosts the economy by creating an affordable, accessible insurance market that’s not dependent on employer-based insurance.

Travis Kalanick, co-founder of Uber, said the law has been “huge” for his personal-transportation business. Uber’s drivers are independent contractors, so the company does not provide them with health insurance. But because the ACA creates a functioning individual market for health insurance, making it easier and more affordable for Uber drivers and others to buy coverage on their own, Americans don’t have to stay in a job just to keep their health insurance.

“The democratization of those types of benefits allow people to have more flexible ways to make a living,” Kalanick said during dinner for reporters, according to Buzzfeed. “They don’t have to be working for The Man.”

This is why Uber loves Obamacare, reports Jason Millman of The Washington Post. For a company like Uber, it’s about liberalizing the workforce so that people are able to take jobs they do like that don’t provide health care, he writes.

Numerous sources cite the ability of individuals to obtain affordable coverage outside of the workplace as a boon to the labor market. A Congressional Budget Office analysis earlier this year said giving families more options for obtaining affordable health insurance outside the workplace, the PPACA removes a barrier to job mobility and boosts the economy.

Before the PPACA, many Americans’ only source of secure health-insurance coverage was through their jobs because without work-based plans, people often found coverage to be too expensive or impossible to obtain due to pre-existing conditions. This created a health-insurance obstacle to labor mobility, which is sometimes called “job lock”, writes the Jason Furman in an online post from the White House Council of Economic Advisers.

Job lock can prevent individuals who want to look for a better job, change careers or start a new business from doing so for fear of not having health coverage, the CBO said. Now, because of both the PPACA’s patient protection measures and ban on discrimination against people with pre-existing conditions, Americans have reliable access to health insurance without having to count on employers to provide it, says the report. CBO also said many Americans will be able to start small businesses or take new positions where they can be more productive because they don’t have to worry about health insurance.

Opponents of the law argue that it shrinks the labor market. For example, in a Forbes article, Avik Roy writes that the law hampers job growth by imposing one of the largest tax hikes in U.S. history, increasing the cost of employing workers and establishing exchange subsidies that encourage workers to drop out of the job market. They cite a CBO estimated that by 2024, 2.5 million full-time-equivalent workers will drop out of the job market. Jay Carney, then White House press secretary, celebrated the findings, arguing that they mean that Americans would no longer be “trapped in a job,” Roy writes.

Previous Article
Next Article

Leave a Reply

Your email address will not be published.