A few weeks ago, I did the math and came to the happy conclusion that I could quit my full-time job to do what I loved to do, do it on my own time, and make significantly more money. (Ask me how you can make Herbalife™ work for you!) My math assumed Obamacare, which is pretty damn affordable for someone with my health history and in my demographic, would still be the law of the land. There was no way around that, unless I put off the move until we knew what might happen, if anything, to these healthcare proposals now stumbling through Congress.
I’m not crediting Obamacare for my choice, and I’m not blaming Ocare for whatever bad might come of it, but if private health insurance had been as unaffordable now as it was before Obamacare, I wouldn’t have made the move to the gig economy. Neither, I imagine, would many of the millions of Americans who have recently done the same, because it turns out that Obamacare made it a little easier to do what you love for a living. In fact, it played a critical role: Obamacare made health care available for people who don’t have coverage through their job.
It’s hard to overstate just how important this fundamental shift has been for our economy and our culture: Your ability to get insurance is independent from the type of job you have, how much you work, where you work, or how long you go between jobs. This isn’t perfect, but it’s a degree of freedom that made insurance (generally) more affordable than ever for freelancers, small business owners, and entrepreneurs, which in turn allowed more people to thrive in the gig economy and encouraged others, like me, to strike out on our own. If and when we catch a bad break, we have as close to a safety net that a freelancer has ever had. Unless you count those of us who had our dads bridge our foundering casino business by buying $3.5 million in poker chips then leaving it, illegally, on the table.
To be clear, Obamacare needs work. Badly. But I’m writing this to remind us that a repeal in any form will have a big impact on millions of independent workers and entrepreneurs, people from an array of backgrounds and talents who not only participate in our economy but are some of the biggest risk-takers and drivers of innovation and growth. Also, considering the size of that workforce, whatever happens to them will boomerang and have a big impact on the healthcare system.
I’m not so sure the potential scope has occurred to our esteemed GOP officials, but they’d do well to remember, as the supposed champions of American business, that before Obamacare the ability to get health insurance posed a pretty substantial obstacle to entrepreneurship. The AHCA or the BCRA or the All Americans Would Love to Do All They Can to Care for the Wellbeing of All People Equally No Matter What Act or whatever the hell they end up calling it has, in addition to being ill-conceived and staggeringly cruel, a huge blind spot: It might freeze or reverse growth in a critical sector of the American economy.
The Great Gig In The Sky
It’s tough to define the size of the gig economy, because the definition of a freelancer or independent worker itself is a little fuzzy. But some numbers will give you an idea of how big it is, and more importantly, how fast it’s growing. In 1995, about 9.3 percent of Americans were freelancers; ten years later that number was basically unchanged, but between 2005 and 2015 it grew to 16 percent. Sixteen percent of the workforce doesn’t sound like a lot, but in terms of growth it’s enormous: basically zero percent growth from ‘95 to ‘05, then 60 percent growth from ‘05 to ‘15. For the labor market, that’s an alarming shift. All in all, as many as 70 million Americans, somewhere between 20% and 40% of the labor force, work independently today. In five to ten years, that number will jump to 50 percent.
That said, there’s evidence the growth is topping off, and that people will drop out of gig work as soon as more reliable jobs open up. Many people treat these platform jobs, such as driving for Uber, as one station in an income buffet or as a way to fund another business or personal effort.
(Spare me some healthcare jargon quickly here. I’ll try to get us back on track.)
But there’s also evidence that these people play an outsized role in the healthcare exchanges. According to the U.S. Treasury Department, about one out of five people who enroll in an ACA marketplace are self-employed and/or small business owners. They’re three times more likely to buy into an ACA marketplace as other labor groups, and they’re generally on average younger and healthier. That is, they’re the exact kinds of people we need to convince to buy insurance: they’re the ones least likely to need it, and we need their contributions in order to help offset costs.
But a Kaiser study recently found that under the Senate’s beautiful new BCRA bill, insurance premiums after tax credits in the market would increase by 74% compared with Obamacare. (Premium = what you pay each month, no matter what.) If you’re a young, healthy person faced with these costs, you’d probably either not buy healthcare or not take the risk of striking out on your own. This is the opposite of the incentives the ACA created.
On top of this, add the uncertainty of living and working between different states with different policies, the fact that the self-employed pay higher taxes, and that other benefits, such as retirement accounts, aren’t readily available to us, either, and you can start to see why the people working in the gig economy might be some of the first casualties of an Obamacare repeal. Indeed, the choice between paying higher premiums (what you pay monthly), paying for plans with unknown essential care benefits and crippling deductibles (the amount you have to pay out of pocket before insurance even kicks in), and not paying for insurance at all looks pretty easy. It’s an especially easy choice if you’re young and healthy, or if you’re cobbling together income from multiple sources that aren’t always going to be flush, and there’s no longer an individual mandate.
This is exactly what the CBO anticipates would happen if the BCRA passes. The immediate effect is staggering: In the first year alone, 15 million people will lose their coverage. Again: Fifteen million people, in 2018 alone. Those will be the people who don’t have employer plans and must make the choice among a bunch of expensive options or roll the dice on a lucky streak of health.
It’s also important to note a second division in these demographics: Not all of us who work independently choose to do it. About one-third of independent workers do it out of necessity. In other words, they’d take a traditional job if they could get it, but those jobs aren’t as available as broad-stroke employment statistics might lead you to believe. Not only will these people lose their coverage, they’re at a higher risk of financial calamity should they fall sick or catch a foul ball to the eye. Compound that with the fact that their bank account, not their employer’s guarantee, determines their ability to access care, and you’ll see how cruel it would be for an independent worker to lose her ability to work. The net is there, but it burns up at the end of each month.
“Well maybe they should get a real job!” you say. Unfortunately for this ignorant and vaguely racist line of reasoning, the BCRA will even take insurance away from four million people who currently get their coverage through their employer. And a lot of those employers are the small business owners of white working class nostalgia porn, running bridal shops and appliance stores on Willow Street, but who also span every economic and demographic segment, from research labs to lawn care. Also unfortunately, what many people think of as “real jobs,” that is, careers, are all but dead.
From Gold Watch to Part Time
It doesn’t make much sense to force someone to get a full-time job in order to get health insurance. Not only do I find this stupid and mean in an ideological sense (why the fuck would anyone want to deny anyone access to a doctor?), it’s also stupid when you think about what our economy looks like today. Shit moves fast. I’ve worked for four tech-ish companies in the last year. Two of ‘em are basically gone, and the third is mortally wounded. One failed, fired everyone, almost disappeared, then morphed into something new and is slowly coming back as something else. And one of them is now worth many billions of dollars.
It’s a roll of the dice. These shifts happen far too frequently and far too quickly for us to expect that a young person starting out in the world (again, the exact type of person you need to persuade to buy insurance) would find it reasonable of you to ask them to depend on a steady job for steady benefits. They’d tell you you’re insane. We work, on average, between three and five years at one place, then we, or they, move on. Gold watches aren’t in style.
Any economic policy, healthcare included, that doesn’t account for this shift (let alone facilitate it) is shortsighted, outdated, and, if not intentionally cruel, intentionally unhelpful.
But Mr. Trump is the entrepreneur’s president, yes? He promises JOBS! JOBS! JOBS! and loves taking credit for low unemployment numbers. But if Americans don’t want to leave their jobs because they’re scared they’ll lose healthcare, Mr. Trump will have created “job lock.” A certain level of unemployment is considered healthy, because full employment means no one can afford to leave a job to try something new, and the economy stalls out. This discourages entrepreneurship and dampens small business growth, two main engines of the U.S. economy. A bill like the BCRA will not only make insurance less attainable and affordable for many entrepreneurs, small business owners and their employees, it will make it more difficult and less attractive to try being an entrepreneur in the first place.
Our policies shouldn’t make us scared to try new things or scared to trust ourselves. This comes right back to the same myopic nostalgia this administration has demonstrated since the campaign. Do we think the guys who are trying to resuscitate coal mines will be able to devise healthcare policy that supports an increasingly decentralized economy? If they can’t, the consequences are going to be even more profound than the CBO could estimate. If we’re messing with the fundamental shape and vectors of modern economic growth… we’re all going to need that insurance, for the pills if nothing else.
I’ll end, then, with an example from the poster child for the gig economy, Uber. A recent study found that about one in four Uber drivers actually gets health insurance through another job, not through the ACA marketplace. These people are using the gig economy to make some extra money on the side. About 16 percent of drivers said they got their coverage through a spouse, and another 15 percent reported they were on Medicare. Only 10 percent of these drivers said they got their insurance through the Obamacare exchanges. About thirteen percent chose to go uninsured.
That’s right: More drivers chose not to buy insurance at all than to go with the ACA. Another Obamacare disaster story.
But this is the very crux of the lie that permeates everything Trump has promised for the economy. All the policy we’ve seen from this GOP cohort is negative, and I mean that as literally acts of negation. Tear up NAFTA, but replace it with something. Build a wall, even though most undocumented people came here on a visa. Cut taxes for the rich, and trust they’ll do something good with it. Bomb the shit out of ISIS, then who knows what the fuck. We can’t create if we only think about how to destroy. Our reaction to that survey of Uber drivers shouldn’t be, “We need to eliminate Obamacare.” It should be, “We need to eliminate that thirteen percent.” How to do that? Maybe try asking an entrepreneur, not a bankrupted casino magnate. I’d extend the metaphor, but why bother.