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Health Insurance & the American Dream

Lawmakers who oppose the Affordable Care Act often cite the effect on small business owners as one reason to repeal it. They say it costs small businesses too much and discourages them from growing. Earlier this year, the New York Times reported on the results of two polls showing that 60% of small business owners would like the ACA repealed.

The way this story is often told, though, oversimplifies it. Most of those small business owners who oppose the law aren’t saying they want it repealed so they can go back to the way things were before. They are looking for something better, something that addresses the shortcomings of the ACA and reduces healthcare costs overall so they can invest in their businesses and obtain coverage not only for themselves but also for their employees.

There is also an important but often overlooked fact here: A significant number of entrepreneurs, sole proprietors, and small business owners rely on the ACA to allow them to start or maintain their businesses. The ACA doesn’t just allow people to get insurance, it allows them to build something of their own.

“Obamacare is a game-changer.”

Entrepreneur Eryka Peskin makes her living by helping people achieve their dreams. When I talked to her recently she said she was calling her representatives in Congress to demand they keep their hands off the ACA. Otherwise, she’s not thinking too much about the potential barrier to her own dreams that is contained in the Republican tax bill: The elimination of the individual mandate, which could drive up her health insurance premiums and force her to alter her life in some way.

Over the years Eryka has worked both as a social worker and as a financial advisor. She also co-founded a nonprofit organization. And in 2012, she launched her current venture: Abundance Coaching. Eryka uses her background in social work and finance to counsel others on overcoming their fears, limiting beliefs and financial obstacles so they can identify and achieve that which they desire most, professionally and personally. (In the interest of full disclosure, Eryka and I were friends in high school. We reconnected recently through Facebook.)

Entrepreuner and Abundance Coach Eryka Peskin. Before the ACA, she sometimes went without health insurance.

Eryka is 43 years old and has some medical issues. She gets her insurance through the federal marketplace, Her income qualifies her for subsidies, making coverage relatively affordable.

Eryka signed up for the first time as soon as the marketplaces opened up in 2014. She was far from alone. According to a comprehensive 50-page working paper released by the Treasury Department’s Office of Tax Analysis (OTA) just before Donald Trump’s inauguration (literally days before, in fact), one in five people who purchased insurance through a marketplace in 2014 was a small business owner or was otherwise self-employed. Data from subsequent years isn’t currently available publically, and it’s unlikely a similar analysis will be done for 2015 and 2016, given the current administration’s hostility toward the ACA. But according to one of the authors of the OTA paper, Adam Looney (as reported by Rob Mandelbaum on data for 2015 and 2016 were just coming in at the time of Trump’s inauguration and preliminary indications were that “a lot more [entrepreneurs] were opting for coverage” than in 2014.

According to policy experts, before the ACA was implemented, “job lock,” or staying in a job in order to receive benefits, was a serious obstacle to entrepreneurship and self-employment in the United States. Eryka sees this firsthand in her work. As a coach, she has a lot of clients who are looking to strike out on their own professionally. Many of them are married, she says, and have access to insurance through their partners, making healthcare costs less of a risk for them. (I personally fall into this category. Right now, I write part time and also have a part-time job that provides me with great benefits, including comprehensive health coverage. But in the not-so-distant future, I plan to write full time—and will most likely go onto my husband’s employer-provided insurance.)

“I’ve had a chronic illness since childhood, so no or non-comprehensive insurance is not an option.” Sara, freelance writer/editor/teacher

For those who are not married, Eryka says, “Obamacare is a game-changer,” giving them greater security and making it easier for them to decide to take the leap. This has certainly been the case for Sara, a 37-year-old freelance writer, editor and teacher. Sara, who asked that I not use her last name, started freelancing “in earnest” in November of 2016, something she says it would have been very difficult to do without the ACA. Still, the ACA doesn’t solve all of Sara’s problems when it comes to health coverage. Because she doesn’t qualify for subsidies she pays the full cost of her coverage, which averages around $10,000 a year. She’s privileged, she said, that her family is willing to help her with the expense.

What if premiums rose even further as a result of the proposed repeal of the individual mandate, as has been predicted by the Congressional Budget Office?

She’d leave the country, she said. She’d rather put her money toward attending a degree program abroad than “have to pay a ridiculous amount of money for healthcare.” I asked her in an email what this would mean for her.

“I’d leave family and friends,” she wrote back. “I would also have to balance building my business with whatever degree I would have to half-ass to stay in my new home, and I could get kicked out at any time. I would also lose all citizenship privileges and be away from certain aspects of my life that have become more important recently, primarily social justice work.”

But, she wrote, “I’ve had a chronic illness since childhood, so no or non-comprehensive insurance is not an option.”

When I asked Eryka what she’d do under the same circumstances, she also said she’d most likely have to move, albeit to another state not another country. Currently she’s based in Asheville, North Carolina, though she calls herself “location independent” and takes frequent road trips to visit family and friends elsewhere (she does most of her coaching and runs programs and retreats virtually). She’d probably move to California, she said, where she has lived previously, or to New York, where she’s from and has some family.

“I’m assuming they will still have some form of accessible insurance,” she said.

To be sure, the insurance question doesn’t keep everyone without ready access to coverage from self-employment. Eryka started her business before the ACA was implemented and was, at various times, covered through New York State’s Healthy New York program, Medicaid, or nothing at all. But with her medical issues, living without coverage was far from ideal and finding providers who accepted Medicaid was often challenging. For her, being able to purchase individual coverage has been a much better option.

“I will do what I want to do and figure out how to pay for it.”

Amanda Berlin, a 39-year-old independent communications consultant for entrepreneurs, said insurance wasn’t a consideration for her at all when she started her business in 2012. She isn’t currently covered by a marketplace plan, but she had one for both herself and her young daughter in the past. It was expensive, she said, but the coverage was good. Now she and her daughter are covered by her husband’s employer-based insurance, but she and her husband are separated. What if things changed and the cost of obtaining coverage for herself went up?

“This is more of a personal philosophy,” she told me in an email. “I will do what I want to do and figure out how to pay for it.”

With a child to support, this isn’t something Amanda takes lightly. She acknowledges that “insurance is a huge concern.” It’s also, in her words, “a racket.”

Amanda Berlin, Communications Consultant to Entrepreneurs, says insurance is “a huge concern” but she won’t let that stop her from continuing on the career path she’s chosen.

“It’s a bizarre system,” she said, “an elaborate gambling ring” in which consumers are compelled to bet that they’ll get sick, and to pay thousands of dollars to insurance companies to protect themselves if that happens, while insurance companies do everything they can to avoid paying out. The medical industry is also to blame, she said. They are the “house,” and they and the insurers are in cahoots when it comes to the costs of care.

I don’t fully agree with Amanda’s statement regarding the “medical industry,” but it’s a common perception and I think there’s some kernel of truth there. The interrelationship between providers and insurers is complex, and varies with the size and type of medical practice and institution—for example, many solo practitioners and small practices are struggling, pinched as much by the insurance companies as consumers are and overwhelmed by a system that favors large health systems. But there’s no question that insurers, as businesses, will make every effort to maximize their profits and that other players in the system are contributing to the ballooning costs of care, all of which leaves consumers on the losing side.

“You could go bankrupt if you don’t have insurance and something catastrophic happens,” Amanda said. “This is why I carry insurance. But why are medical costs so astronomical to begin with? Why do we need insurance for health-related expenses? This is just not right. Healthcare should be accessible, whether through lower costs or subsidies, to everyone.”

The bottom line for Amanda, though, is this: As important as it is to her to make sure she can cover herself and her daughter, “it will not stop me from doing what I want in my life.”

What’s at stake for entrepreneurship in the United States?

Eryka, Sara, and Amanda all exhibit the passion, dedication and, frankly, stubbornness we’re not surprised to see in a successful entrepreneur. They all say they’ll continue down this independent path on which they’ve embarked regardless of what happens to the individual health insurance market, though they might have to do something as dramatic as move, even to another country.

But what about those for whom the costs are simply too great to continue, or those who never launch their great ideas to begin with? What would we lose as a country if those great ideas never had a chance to come to fruition because people fear being bankrupted by a medical crisis and stay put in jobs that give them insurance but little satisfaction?

Maybe you don’t think it’s that big of a deal if there’s one less artist, craftsperson, caterer, artisanal baker, writer/editor, Abundance Coach, communications consultant or healthcare blogger. Maybe you think not much would be lost at all if not everyone was able to pursue their dreams, if we all just sucked it up and got “real jobs.”

You would be wrong.

By linking insurance to employment we have created a system that stifles innovation and discourages risk-taking. Isn’t this counter to the American dream, the notion that anyone, regardless of who they are or where they come from, can build something great? The OTA report found that lower income entrepreneurs were much more likely to purchase coverage through the marketplaces than those making more money. How many more women, people of color and lower-income people—groups with less means to start with—are now able to launch their businesses because this obstacle has been mitigated?

It’s patriotic to support entrepreneurs this way, Eryka told me.

“We give a lot of lip service to small business and following our dreams,” she said. “This [the ACA] lets you do that.”

Plus, Eryka said, “The world doesn’t need more people who are stifling their dreams and are miserable because of it.”



Title Image Photo Credit: © Can Stock Photo / luissantos84


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