Is Obamacare Good For Entrepreneurs and Startups?
December 18, 2013
Regardless of which political party you align yourself with, the Obama Administration's October rollout of the Patient Protection and Affordable Care Act, commonly called the Affordable Care Act or Obamacare, was a disaster. The HealthCare.gov website was — and remains — overrun with traffic and technical glitches, and it appears that the number of Americans signing up for coverage is well below the number forecasted by the Administration. Six days ago, the Department of Health and Human Services Secretary Kathleen Sebelius announced an internal review of what happened and why, stating that the Inspector General for the Department would review what happened with the "flawed and simply unacceptable" launch of the website. The Department also released the latest enrollment figures, which shows a promising jump in sign ups during the month of November of 365,000, up from the 106,000 people who signed up in October.
The Affordable Care Act was signed into law by President Barack Obama on March 23, 2010. The goals of the Act are to (1) increase the quality and affordability of health insurance; (2) lower the uninsured rate by expanding public and private insurance coverage; and, (3) reduce the costs of healthcare for individuals and the government. Though there are many critics of the Act, including those who are opposed to specific provisions of the Act and the promised insurance reforms, and those who object to the way in which the Act was passed in 2010, it appears that one group of individuals may be applauding its implementation.
According to a report from the Robert Wood Johnson Foundation, the Urban Institute, and Georgetown University's Health Policy Institute, the Affordable Care Act is expected to produce a significant increase in entrepreneurship. One of the major roadblocks to entrepreneurship in this country is difficulty obtaining health-insurance coverage on the open market. The report finds that because of the Affordable Care Act, the number of self-employed Americans will be 1.5 million higher in 2014 (an increase of 11 percent). Why? The Affordable Care Act means that access to quality, affordable health-insurance coverage is no longer tied to employment. The report finds strong evidence that without this barrier, the number of self-employed people in the United States will increase with "full implementation" of the Act and lead people to start their own businesses as self-employed entrepreneurs.
Engine, the voice of startups in government, is also reporting that the Act may boost entrepreneurship. Noting that many risk-takers remain with their employers because of the guarantee of health insurance coverage, Engine is reporting that the pressure to stay locked in a job may be loosening because the Affordable Care Act makes it easier and less expensive to obtain individual health insurance coverage. Engine also points out that the Act encourages entrepreneurship and small business growth by providing assistance to high-growth new and young businesses in the form of an exemption from the employer mandate.
Given the new landscape produced by the Affordable Care Act, now be a perfect time to start your new business. The Law Office of Kristina M. Reed is committed to helping entrepreneurs and all small business owners achieve their dreams by providing the foundation needed for success. Our goal is to help you grow into a successful business. We are highly experienced in all phases of business law, from startup to profitability, and we can help guide your young company through all phases of its growth and success. If you have questions about your California business or startup, please contact us.