Obamacare’s Impact on Entrepreneurship and Self-Employment

There’s no doubt the Affordable Care Act (ACA, or better known as Obamacare) has been a good for freelancers, the self-employed and other independent workers.

As the chart above shows, the percentage of full-time independent workers with health insurance has increased from 64% in 2013 to 83% in 2016.

This increase is clearly due to Obamacare, which took effect in 2014.

This means about 3.3 million more independent workers have health insurance than in 2013.

But it’s not just freelancers and independent workers who are benefiting. Small business owners and even high tech entrepreneurs are turning to Obamacare.

Sam Altman, president of the well known tech accelerator Y-Combinator, has a blog post with a series of quotes from Y-Combinator backed company founders who might not have been able to start their firms without Obamacare.

Reid Hoffman, a venture capitalist the founder of LinkedIn, has also weighed in on how Obamacare encourages entrepreneurship. Key quote from his article Obamacare Is More Than a Safety Net — It’s A Trampoline:

Because of its (Obamacare’s) provisions that make it much easier for individuals to obtain health insurance without having to do so through an employer, it increases the workforce’s capacity for risk, mobility, and innovation in ways that I believe have a positive impact on our overall economy.

Hoffman’s article references a recent U.S. Treasury study that shows in 2014 1 in 5 ACA marketplace consumers was a small business owner or self-employed.

This data only reflects the the numbers for the self-employed and small business owners who purchased their insurance through an ACA marketplace.

Many others who are self-employed or own small businesses (me, for example) aren’t buying their insurance through a ACA marketplace.

But despite not using an ACA exchange, we’re still benefiting from the key provisions of the ACA such as no limits on pre-existing conditions and the ability to have adult kids under the age of 26 on our plan.

So the impact of Obamacare on the self-employed is even greater than reported in the Treasury study.

Altman and Hoffman both point out the ACA is not perfect and it needs to be improved.

We agree. In particular rising co-pays and deductibles are resulting in many not getting medical treatment due to high out of pocket costs. Another growing problem is limited access to physicians.

The political reality is the new administration ran on repealing Obamacare and is going to do so.

Our hope is their replacement keeps intact the features of Obamacare that are helping entrepreneurs, small businesses and independent workers.