The Gig is Up

Before the ACA, many self-employed individuals found it challenging to find a health plan on the individual market that met their needs, let alone to pay for it. Post ACA, the ability to obtain affordable coverage not tied to an employer has givenentrepreneurs in the growing ‘gig’ economy the flexibility to pursue their goals without having to worry about maintaining health coverage.

These days may be coming to an end if the new GOP health care bill passes, however. Under theAmerican Health Care Act or AHCA, subsidies are dependent on age, as opposed to income (like under the ACA), and are not adjusted for geography, even though health costs vary widely depending on where you live. This could mean big changes in the amount of assistance an individual would receive under the AHCA compared to under the ACA. As cited in the article, a 40 year-old in San Francisco making $30,000 a year would receive $800 less a year under the new plan, and a 40 year-old living in Santa Cruz County, CA would see a $2,490 less per year -- potentially putting coverage out of reach. 

A study published by the McKinsey Global Institute estimates that U.S. has between 54 million and 68 million ‘independent workers’, with some working independently full-time and others using independent/freelance work to supplement their primary income. With the proposed changes under the AHCA, some individuals may try to seek traditional employment for the purpose of healthcare coverage, or they may just choose to go without coverage completely. While critics of ACA subsidies have said they discourage people from seeking employment or advancing their careers since an increase in income would result in a decrease in subsidies, this new plan could have the same discouraging impact on the next generation of entrepreneurs.  

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Emily Ferreira
by Emily Ferreira

Associate, Health & Benefits Survey Research, Mercer

Emily Ferreira supports the Mercer Health & Benefits Survey Research team as a consultant liaison where she assists consultants nationwide with benchmark reports and other survey-related needs. She works with the Survey Research team to develop and deploy in-depth benchmarking surveys and reports in the area of health care, health management and disability and absence for Mercer Health & Benefits.

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