Single-Payer Health Insurance Could Help Would-be Entrepreneurs Quit Their Jobs to Pursue Their Dreams
Sen. Bernie Sanders has rolled out a healthcare bill to expand what the Affordable Care Act has done to make health insurance affordable and available for the self-employed. Sanders’ bill would extend Medicare -- retirees’ health insurance -- to almost everyone in the country, making the federal government is the single health insurance payer for all Americans.
Polls show Sanders "Medicare for All" bill is supported by a majority of Americans but has no chance of passage with the current Congress and Administration. The bill is co-sponsored by 15 prominent Senate Democrats, so the issue is likely to be raised in the midterm elections and beyond.
While some are just coming to terms with the idea healthcare is “this complicated,” it’s worth exploring how Sanders' bill would impact entrepreneurs and the ecosystems all of us rely on to get our businesses humming. But before diving into “Medicare for All,” let’s take a look at what Sanders (and others) are hoping to replace.
ACA has unlocked "job lock.''
A 2008 Harvard study found 11 million Americans said they'd kept jobs they wanted to leave to avoid losing health insurance. The study popularized the term "job lock."
The Affordable Care Act gave Americans their first real opportunity, as individuals, to purchase affordable, portable health insurance. Millions of people pay premiums at least in part with subsidies based on incomes. This was a major change that freed many people to pursue entrepreneurial opportunities they could not have pursued previously without being uninsured after losing employer health insurance benefits.
The law freed many to create “non-employer” businesses -- freelancing -- which have provide the entrepreneurial ecosystem with flexible, skilled workers who run their own businesses. The rise in skilled labor supply has fueled a rise in demand, as skilled independents successfully build businesses for entrepreneur clients everywhere.
The law no doubt can be improved -- insurance costs have gone up -- but the ACA has allowed millions of Americans to take professional risks without depriving themselves or their families of affordable health insurance.
Taking things a step further.
What Sanders is proposing isn’t new for the rest of the world. Thirty other “free market” countries have adopted similar programs, and a cross reference of this list from the Commonwealth Fund points out how some of those countries rank as far as overall quality of care. Our global peers offer universal healthcare systems that get better overall results for less money.
Regarding Sanders’ bill, a detailed rundown of how specific groups would be affected is not possible given the lack of funding details, but the system would insure every American. It would increase taxes for some but do away with premiums and co-pays for everybody. Americans who currently get their insurance through their employer would shift into a new system.
That has its pros and cons. A single-payer entity would have the bargaining power to confront expensive elements of our healthcare system, like getting better prices on prescription drugs. The expectation is that out-of-pocket expenses would also go down.
It’s impossible to determine exactly how things would play out, but the one major takeaway is this: nobody would risk going without health insurance if they pursued independent work and entrepreneurship.
Recognizing the realities.
Sanders' bill won't become law soon, but the underlying principles will guide at least one political party’s efforts to change the healthcare system in the U.S. Whether it’s Medicare for All or some sort of public option that would still allow people to keep their private insurance, it’s safe to assume substantial changes will be offered.
Americans spent $3.4 trillion on healthcare in 2016, and healthcare is expected to account for 20 percent of the U.S GDP by 2025 (this could change, depending on legislative action). Those costs are only rising for every American, and especially the 24 million non-employer small businesses in the U.S.
Changing such a major part of the U.S. economy isn’t easy. So far, this year has already several failed attempts. At the end of the day, creating a system where those building businesses (including skilled freelancers) can rely on quality care will only create more long term opportunity and open the door for continued entrepreneurial innovation.