NEW YORK — Stay in business for yourself or go back to working for someone else?
That’s the choice some small business owners and freelancers are worried they may have to make, depending on what changes Congress makes in the health care law.
With Republicans working on legislation to repeal and replace the Affordable Care Act, people who traded a full-time job for entrepreneurship are concerned that new insurance policies may be too expensive or not available at all — and possibly force them to find new jobs that offer cheaper and more comprehensive group plans.
“From a safety and stability standpoint, I have to look for a job now,” says Michael Duffield, owner of Fruition, a marketing business based in Palm Springs, Calif., that he started in 2011. He’s the sole owner, without employees.
Duffield, who has high blood pressure and a pacemaker, buys individual coverage that he’s happy with on the state insurance exchange. He’s worried that under a new health care law, coverage might cost more than he can afford. And while GOP lawmakers and President Donald Trump have said they want a new law to keep the ACA’s requirement that insurers cover pre-existing medical conditions, Duffield is anxious about what coverage might look like in the future.
“I don’t feel safe at this point without actual insurance, and I don’t know how safe I feel that my insurance is going to continue,” says Duffield.
Health insurance is one of several considerations when people think about starting a business. For many, leaving a job with a group insurance plan, especially one that their employers contribute to, means they’ll have to buy individual policies that are more expensive and may cover less.
The ability to buy individual insurance on exchanges in each state helped some of Merredith Branscombe’s clients decide to leave their jobs for entrepreneurship.
“They felt like it emboldened them a bit. They had a safety net,” says Branscombe, a consultant to small businesses who’s based in Boulder.
The law also has made it possible for new business owners to attract employees when they couldn’t yet afford to provide coverage, Branscombe says.
While Branscombe is concerned for her clients, insurance is also a personal issue. Her husband, who has coverage through his full-time job in the food industry, wants at some point to start his own business. If the couple can’t get affordable and adequate insurance, his dream may have to stay on the back burner.
Members of the National Association for the Self-Employed have been calling in recent weeks, asking if the advocacy group will reinstate the health insurance plan it discontinued when the ACA went into effect, says Katie Vlietstra, the organization’s vice president for government relations and public affairs.
“People are putting their feelers out there,” Vlietstra says. So far, the group has no plans to revive its coverage.
It’s not known how many freelancers and small business owners in the U.S. buy individual health insurance, but the number is likely well into the millions — about 80 percent of the nation’s nearly 29 million small companies don’t have employees and therefore don’t buy group coverage. But some of the nation’s largest small business advocacy groups, including the National Federation of Independent Business and the National Small Business Association, oppose the ACA at least in part because of the costs of complying with the law.
In a November survey released by Wells Fargo, 70 percent of 602 small business owners said that changing the requirements for small companies would help companies grow.
The public is divided over health care. In a survey released last week by the Associated Press-NORC Center for Public Affairs, 53 percent of those surveyed want to keep the ACA in some form, while 46 percent want it repealed. Fifty-six percent of the people surveyed said they were “extremely” or “very” concerned that many will lose health insurance if the ACA is repealed.
A survey released by the Kaiser Family Foundation in November found that 69 percent or more of participants said they had a favorable opinion of a number of the law’s requirements, including coverage for pre-existing medical conditions, the ability of young adults to stay on their parents’ plans until age 26 and subsidies to help low-income people buy insurance.
Nicole Lewis-Keeber doesn’t want to risk being without insurance, so she’s holding onto a part-time job with benefits while she builds her business as a life and career coach. The workload is wearing, especially since the part-time work requires her to be on call during overnight hours three days in a row each week doing emergency mental health evaluations.
Lewis-Keeber has health issues, and not knowing what the laws governing health insurance will look like makes her anxious about committing to entrepreneurship.
“I keep feeling pulled — go back to full-time work or just take a risk,” she says. “I’m worried; I don’t know what plan I’ll get.”
Lewis-Keeber, who lives in Lancaster, Pa., is willing to wait several months and see what happens. But, she says, she can’t keep getting little sleep.
The availability of cheaper health insurance because of the ACA helped Anitra Budd make the transition from full-time work to freelance writing. Her premiums are about 25 percent less than what she paid in the past when, in between jobs, she had to buy her own insurance. But she can’t afford more expensive insurance on a long-term basis.
Budd, who lives in Minneapolis, takes daily medication for a health condition. Before the ACA, her applications for insurance were rejected by several carriers. Those that would cover her were very expensive.
“I don’t know at this point what health insurance companies are going to be allowed to do,” she says. “When you work on your own, you always have to think about the ‘what ifs.’”
More expensive health care isn’t a cost that business owners can easily pass along to customers.
Josh Lapp, who co-owns Designing Local in Columbus, Ohio, notes that he and his partners in the community planning and design business can’t increase what they charge their mostly municipal clients; if their individual health insurance is more expensive, that’s something they’ll have to absorb.
Lapp was able to quit his full-time job in 2014 because he could buy insurance on the Ohio exchange. But Lapp, who has a pacemaker, is concerned that it might need to be replaced in the future, and isn’t sure of the choices.
“The only option I can see at this point would be to disband my business and try to get a job that will provide health insurance,” he says.