Years ago, a tenured university professor told me his secret:
He was desperate to quit and start his own business. He had enough in savings but didn’t dare leave his job.
As a man in his mid-50s, he couldn’t get health insurance on his own.
The Affordable Care Act, which some call Obamacare, was supposed to change that. Supporters said the law would end “job lock” — people stuck in jobs because they couldn’t get or afford health insurance elsewhere.
Health insurance exchanges offering reasonably priced medical plans would enable entrepreneurs to launch companies, stay in business and create new jobs.
Has the new law worked? For many, the answer is a resounding yes.
“We couldn’t have taken the business to the next level without Albert quitting his job,” said Eleanor Leger, co-owner of Eden Ice Cider in Newport, Vt. Eleanor Leger and her husband, Albert, started the business making ice cider, a dessert wine fermented from apples, in their basement in 2007.
“Albert being able to work here full time allowed us to move to new space, increase our production, create a retail space,” she said. “The number of employees increased from four to 11.”
Before the Affordable Care Act, Albert Leger was tied to his job teaching chemistry at a New Hampshire boarding school. He is the sole cider maker, so the company couldn’t grow.
“Each of us has just turned 50 and health care’s important,” Eleanor Leger said. “All of our money is going into growing the business. … Paying full premiums on an individual market (policy) was just beyond our means.”
Individual health insurance for the two of them would have been close to $2,000 a month. The Legers now pay $360 a month on the Vermont’s health-insurance exchange because they qualify for subsidies.
Carrie Stewart’s entrepreneurial story is similar.
“I would have absolutely been forced to return to full-time employment in order to get a decent health policy if not for the availability of ACA coverage,” said Stewart, owner of a content marketing and public relations consultancy in Raleigh, N.C.
Stewart started her business in June 2012 after leaving a public-relations agency.
“I was working full time and had been talking to several colleagues about breaking off and starting our own small agency,” she said. “They declined because they didn’t want to lose their health coverage.”
Stewart had coverage under her domestic partner’s company policy.
“Within a year, I had built a solid roster and was hiring independent contractors,” she said. Then in fall 2013, her boyfriend’s employment situation changed; her health insurance was ending.
“Individual coverage was astronomically expensive. I shopped around, and for a middle-of-the-road plan, not a Cadillac plan by any means, $620 a month was the best I could get,” Stewart said. “I was in the 30-39 age bracket and knew that once you turn 40, it was only going up. It did not seem viable” to stay in business.
The Affordable Care Act changed that. Stewart pays $344 a month and is more than satisfied.
“The quality of coverage I have far surpasses any employer plan I’ve ever been on,” she said.
Before she bought insurance under the new law, she was surprised by another quirk of individual medical policies.
“I had heard that women paid more for health insurance than men, but I didn’t have any idea it was over twice what a man would pay for a comparable policy,” Stewart said. “Over 10 years, the difference was $40,800. That puts female entrepreneurs at a big disadvantage. I was pretty incensed that I was paying so much more.”
Administration officials and those who study small businesses say not enough time has passed to assemble data on the number of businesses started or saved because of Obamacare, but experts say the law has been a help, not a hindrance.
“Exchanges don’t ask if you’re self-employed,” said David Chase, health care policy director at Sausalito, Calif.-based advocacy group Small Business Majority. “But with over a million people in the exchange, … it’s reasonable to assume they’re a large part of that number.”
“Prior to ACA, about one-third (of the self-employed) were uninsured, more than twice as likely to be uninsured as everyone else,” Chase said. “They were either denied coverage or offered insurance but rated in such a way they weren’t able to afford it.”
Affordable insurance is the key to keeping many entrepreneurs self-employed.
“For all the naysayers’ claims of the ACA infringing on our liberty, my American dream would’ve remained nothing but a dream in the absence of the ACA,” Stewart said.
So You Think You Want to be a Consultant?
