Could health reform relieve “job lock”?
Monday, November 2nd, 2009
Changing jobs means changing — or losing — health insurance. Surveys have found a majority of workers consider health insurance a major reason to stay put in their position. But small business advocates say the risk of disruption in health coverage has been stifling entrepreneurship. WHYY’s health and science reporter Kerry Grens looks at whether the health care bills could make a difference.
More than 30 years ago, when Arthur Holst was a college student, he got a kidney transplant. Since then, living without health insurance has not been an option. That made starting his own business all but impossible.
Holst: When I first got out of school I would have done a lot of different things. Even though I had had a transplant I did have ideas. But the real burden of being able to pay for your drugs and have medical coverage just became a total disincentive…why bother, I’m not going to be able to do it.
That’s because any business founder has to buy his own insurance – and cost can become prohibitive.
Arensmeyer: People who want to start small businesses who have a pre-existing condition can’t do it and hope to keep insurance.
John Arensmeyer is the head of Small Business Majority, a group that supports health care reform.
Arensmeyer: And it’s a phenomenon of job lock where people end up staying in their job solely based upon insurance.
The result is that good ideas for new businesses lay fallow. Health care bills under consideration in Congress would eliminate penalties for having pre-existing conditions.
Stephen Sammut says that change could tip the scale in favor of becoming an entrepreneur. He is a lecturer and senior fellow at Wharton Business School.
Sammut: If we address the health insurance issue, some people who are inclined to make the entrepreneurial leap now have a better reason to do so. But it is also going to depend on those other factors, principally, the availability of capital.
And cheaper insurance is not a slam dunk. Insurance companies have said that the health care proposals could actually increase people’s premiums.