6 reasons Obamacare is good for entrepreneurs

Obamacare really shines when it comes to people thinking of starting their own business, or those who already have.  Which got me thinking of a whole slew of ways that health care reform will help people who decide to follow their own American dream and strike out on their own.

I started working on my own in 1997.  I was 34 years old (or so), went looking for insurance on the individual market, and it was confusing as hell.  Back then, in pre-Internet days (at least pre the ubiquity of information we have online today), you had to phone up the insurance company and meet with a rep.  That was fun.  I still remember the woman from whichever company it was asking me if I’d ever gone to a therapist. I said, honestly, “no.”  And she said, “phew – we find that people who to therapist tend to be hypochondriacs.”

1. Easier to compare health insurance plans

Granted, it’s easier today with the Internet, but the amount of information, and the way it’s packaged, is still overwhelming.  Fortunately, Obamacare is going to make that easier with the new “exchanges” we’ve been hearing about.  From what I can gather, they’ll be online forums where all the different plans being offered in your state will be posted in a comparable fashion so that it’s easy to compare, and know which one is better.  And what that does is provide a greater incentive for insurance companies to then compete with each other, which we’re already seeing in Oregon and California.

2. Cost containment

But there’s so much more.  Before Obamacare, if you decided to leave your job – or lost your job – and went to work on your own, you went back to zero with the insurance companies.  Let me explain.  A good friend decided to move from DC to Arizon.  He was paying $250 a month for his HMO here.  When he moved to Arizona, the same insurance company, Kaiser Permanente, told him they were upping his monthly premiums to $1200 a month because of various pre-existing conditions.  Mind you, it’s the same company.  But because he was leaving his job on the Hill, and moving to Arizona to work for himself, he lost his health insurance and had to start over again from scratch, which means paying exorbitant rates because the insurance companies treat you as “new” and basically gouge people who work for themselves.

3. No longer turned away for pre-existing conditions

Not to mention, they could just tell him no all together.  Another friend of mine, last year, got turned down by a major health insurance provider here in DC because he’s 35 years old, and has asthma and some skin condition, like psoriasis.  That was enough for them to tell him thanks, but no thanks.  That’s absurd.

Under Obamacare that won’t happen.  Once the law fully kicks in, when you go to an insurance company to get a policy, they will charge you what they charge everyone else in your state and age bracket.  You won’t pay more because you’re “new” to the plan – you will pay the same as the “old” people to the plan are paying as well.  The hope is that this will moderate rates, and make it easier for you to set up your own business.

4. You can finally afford to go home to take care of mom and dad

But it’s really more than that.  Mom and dad are getting old for a lot of us.  And a lot of us don’t live in our home states any more.  Americans are far more mobile, in my experience, than Europeans – partly because we have more options.  France has one “main” city, Paris.  America has several, including NYC, LA, Chicago, SF, Dallas, Miami and more.  But what happens in American when you decide to move back home to take care of your parents, if you current live out of state?  You lose your health insurance because you changed states (assuming you’re planning to work for yourself or not work at all).  I know I couldn’t afford to move back to Illinois to take care of my parents.  I’m already paying nearly $600 a month for my health insurance.  God knows what they’d charge me with my asthma and retina problems if I moved.  Obamacare will fix that.

5. No more worries about annual limits

I work for myself, and have the best self-employed PPO I could get from Blue Cross when I bought it in 1998 or so.  Since that time, my monthly premium has nearly quadrupled.  But another interesting thing happened.  I found out that I have an annual limit on my prescription drug coverage – CareFirst BCBS will only pay $1500 a year for my prescriptions, and after that I’m on my own.  That wasn’t such a big deal when I was younger.  But nowadays, even though I don’t have any “grave” conditions, my annual prescription drug costs are far beyond the $1500 that BCBS is willing to pay for (my monthly asthma drugs alone cost around $450).

Oh but it gets worse.  In the past 15 years or so, when my monthly premiums have gone up 400%, how much do you think BCBS raised my annual $1500 prescription drug limit?  Zero.  And if I kept this plan for another 20 years, they’d still only pay $1500 a year.  That’s criminal.

Under Obamacare, annual limits are gone.  Sadly, I need to switch to another plan that’s a good $250 a month more if I want to take advantage of Obamacare’s no-annual-limits, but I’m hoping that once the DC exchange kicks in, that price will go down.

6. You’ll no longer go broke if you decide to go out on your own

I remember talking to my general practitioner doctor here in DC a few years back about how insanely expensive insurance was on the individual market.  He told me a story of a patient of his, in his young 30s, who has HIV and was excitedly telling my doctor about his plans to go work on his own as a graphic designer.  My doctor told him he was nuts.  No insurance company would take him, and HIV/AIDS drugs cost around $2,000 a month.  My doctor made it clear that there was no way this guy was going to leave his job.  And the guy didn’t.  Obamacare will fix that too, since now insurance companies can’t turn you away for having pre-existing conditions AND they can’t charge you more for them – they’d have to charger you the same rate they charge anyone your age living in your town.

I’ve been surprised, and disappointed, at the way Obamacare has (not) been sold to the American people.  The issue of kids being able to come home to take care of their parents is, in my view, huge to a lot of Americans.  I know when I told my parents about this, they were flabbergasted.  They had no idea the challenges I have with health insurance being on the individual market.

National Journal cites a study from the Robert Wood Johnson Foundation showing that an additional 1.5 million Americans will become self-employed by choice under Obamacare.

Granted, we still need to see what the rates will be, and how well this all work, but so far what we’re seeing in Oregon and California is promising.


Follow me on Twitter: @aravosis | @americablog | @americabloggay | Facebook | Google+. John Aravosis is the editor of AMERICAblog, which he founded in 2004. He has a joint law degree (JD) and masters in Foreign Service from Georgetown (1989); and worked in the US Senate, World Bank, Children's Defense Fund, and as a stringer for the Economist. Frequent TV pundit: O'Reilly Factor, Hardball, World News Tonight, Nightline & Reliable Sources. Bio, .

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  • Ford Prefect

    A rude awakening indeed. Most infuriating, for me at least, is the way it effectively ghetto-izes millions of people for the sake of corporate profits.

    The 50 million people who currently have no access to “healthcare” aren’t going to be helped very much. Most of them won’t benefit in any real way. Being forced to buy a shit sandwich (or else!) is hardly appealing.

    Single payer exists in most countries because it’s the only thing that really works. If done here, it would create an estimated two million jobs. Good jobs, mostly. It’s the only thing that makes economic sense.

    But we Americans are opposed to sound economics, aren’t we?

  • ezpz

    Great link! Thank you. I look forward to reading it.

    I’m sure that people will not believe the “cluster***k” that it is until it’s fully implemented.

    “Of course, if we can do it for Libby, MT, then why not the rest of the nation?”

    I suspect it’s a rhetorical question, one to which I’m sure we both know the answer. Single payer would not line the pockets of the rapacious insurance, pharma, or the private hospital industries. Obama never allowed it on the table. Then, the public option was to be the next best thing, but alas, he (Obama) made sure to kill that too in a secret, back room deal with pharma and the hospital lobby.

    http://www.huffingtonpost.com/miles-mogulescu/ny-times-reporter-confirm_b_500999.html

    Speaking of single payer, I remember when doctors, nurses, and other advocates for single payer actually got arrested for just that – advocating for something that would work and work well AND would be affordable.

    http://www.democracynow.org/2009/5/13/baucus_raucus_caucus_doctors_nurses_and

    http://www.singlepayeraction.org/2010/01/29/doctors-arrested-outside-baltimore-hotel/

    Sorry to say, but I think those who are talking up the ACA are in for a rude awakening. A VERY rude awakening.

    Thanks again for that link!

  • Ford Prefect

    Indeed, Lambert Strether is compiling a ton of reasons why ACA is BS. They are archived here: http://www.correntewire.com/obamacare_clusterfuck

    Note that LIbby, MT gets Medicare For All because the place was polluted to the point that no one will provide health insurance to those people. So they got a special dispensation from Bad Max and got socialized medicine just for themselves.

    Of course, if we can do it for Libby, MT, then why not the rest of the nation?

  • Ford Prefect

    Sorry, but ACA does very little of significance for small businesses. First off, costs won’t really go down, which contradicts the official propaganda coming out at the moment. Eliminating banishment for having a pre-existing is good, but it does nothing to control costs.

    As it is right now, 55% of all bankruptcies are due to medical bills. This will not change at all. Being able to compare plans has nothing to do with being able to afford the costs. Furthermore, a person working at a small firm will probably not be able to afford much beyond the “bronze” plan, in which the “consumer” (as if healthcare is like buying a toaster) has to cough up 40% of all costs. And those costs will still outpace inflation by roughly 300% or so, right?

    If you want to help entrepreneurs (a category of business in steep decline in this country, in large part because of our bogus healthcare system), then put Single Payer in place. That’s the only way to reform healthcare in a way that would benefit small firms, along with everyone else. The new system is not much different from the old system. It’s way too expensive and those always contracting “benefits” couple with always rising costs will kill any notion of economic benefit.

    The BK’s will still be there. People ruined for life by insurance companies will still be a fact of life. The rich will be fine, but life for entrepreneurs who aren’t set for life will still be too risky, too expensive and too ruinous if anything at all goes wrong in one’s life.

    Scandinavia has a vastly higher rate of entrepreneurialism than the US does. Count the reasons why and you’ll see how bad ACA is in that regard.

  • cleotis

    gee do ya think this guy is paid for these “i’m a democrat” bsblogs, most likely, now thats honor and integrity, not

  • cleotis

    what a pile, single parent upbringing?

  • Axe22

    I am a partner in a small, successful consulting business. My partner and another employee are 63 I am in my 40′s and in good health. This year our insurance company was going to raise our rates to over $4,000/month/family! Since in our state there are really only two options IBX and Aetna and they both wanted to charge roughly the same thing, this would have effectively forced us to dissolve the company destroying a business that has been successful for the last 13 years. Fortunately we were able to partner with another company that had an extraordinarily unusual insurance plan that allowed them to include contractors. The fact of the matter is that without the ACA many people will not be able to start small businesses because as a small business or sole proprietor insurance companies can charge whatever they want and in our case that was close to $50,000 per family per year. Of course I’d prefer a public option or single payer but at least the ACA will give us the exchanges and the ability to get somewhat affordable coverage.

  • http://markadelphia.blogspot.com/ Markadelphia

    Well, you might be correct about the leaders of the Right but far too many of the general populace of the base believes they are still going to happen. After all, they read it on a blog:)

  • http://parkandbark.wordpress.com/ Houndentenor

    Yep. People here still think Texas pays in more than it takes out of the federal system. Of course that map is very different now than it was five years ago. Lots of people would be surprised at how their state is doing now.

  • http://parkandbark.wordpress.com/ Houndentenor

    *snicker* Perry is such a moron. He is avoiding national health care by forcing people into the federal program. He really is as stupid as he seems.

  • http://parkandbark.wordpress.com/ Houndentenor

    Exactly. I have to pay for my own insurance. It actually went down this year. The big difference with ACA? Several years ago I had a prescription for an asthma inhaler. I don’t need it all the time but for several years every time I visited an ENT I filled out about 20 pages of forms to try to convince them it wasn’t for a “pre-existing condition”. Half the time they’d refuse to pay. There’s only so much time you can devote to getting reimbursed for less than $100. ACA has helped me.

    Also, who hasn’t been providing insurance for their employees? Am I supposed to feel bad for them because they had workers with no benefits? Really? Cutting their hours back to 29 a week? What a bunch of douchebags.

  • http://parkandbark.wordpress.com/ Houndentenor

    Remember the “death panels”? heard about them lately? The right is very good at predicting doom and gloom and then changing the narrative by pushing that gloom and doom to a new topic that will happen at a later date. People keep buying it and our idiot excuses for reporters keep letting them get away with it. Every conversation with someone who is predicting doom and gloom from ACA should start with, “and so when do those death panels start?”

  • ezpz

    Obamacare has not gone into full effect yet, and as such, these are merely talking points.

    What actual facts do you have that this is going to be what you ‘hope’ it will be?

    In #1, you say: “…From what I can gather…”

    In #3, you say: “…The hope is that this will moderate rates, and make it easier for you to set up your own business….”

    #5: “…I’m hoping that once the DC exchange kicks in, that price will go down.”

    To your credit, you conclude honestly that:

    “Granted, we still need to see what the rates will be, and how well this all work, but so far what we’re seeing in Oregon and California is promising.”

    Bottom line is that we DON’T know exactly how it will affect us until it is fully implemented, but from the way it was designed to be corporate friendly, methinks we’ll be worse off than we are now.

    The promising signs you see are just that: promising signs that mean nothing in the big picture. They’re merely little tidbits do draw praise for this godawful legislation so as to parrot the WH talking points.

    I would like to be wrong, but I was paying close attention when it was all being crafted. It was written by the insurance companies and FOR the insurance companies, as well as pharma and the for profit hospital industry. All secretly behind closed doors, don’t forget. None of them will be regulated. There will be no caps on premiums or deductibles, or out of pocket expenditures, and they will be allowed to remain monopolies. How will that help the little guy, pray tell?
    And don’t forget the tax on your Cadillac plans.

    It will be interesting to note the change in tone of the comments AFTER it’s fully implemented.

  • http://poodyheads.wordpress.com/ Papa Bear

    There’s no longer a state-wide exchange in Texas? I hadn’t heard about that. Since my best friend grew up using the exchange, and, until I got married a few years ago, I also used it, I’m sorry to see it go.

  • Monoceros Forth

    Right wingers have a very strange idea about what real-world choices people actually can make, I’ve noticed.

  • http://adgitadiaries.com/ karmanot

    Good post—more. At last we have some idea of what’s in the mysterious, historic , wonderful and totally fabulous Obozo Care package.

  • ah s

    Anyone could have purchased insurance in the past. Now @ 1000% markup, we see a boon to anything we can purchase/afford? Crazy logic.
    A friend is struggling to cut employees to 29 hr weeks and keep decent staff-new normal to be broke, all monies taken, see EU. France our model of perfection years back now taxes are 100% ie slave labor, accept what they give you w/o choice.

  • Naja pallida

    He’s just continuing his trend of turning Texas into a net taker state, instead of a net contributor. I don’t think he really has thought about the end result.

  • jgcarter56

    The funny thing about Perry refusing to set up a state-wide exchange is that the federal government is going to do it for Texas anyway. And we may have more choices and more competition because of it. So Perry is basically setting the stage for federal government run health care by refusing to set up a state-wide exchange.

  • http://markadelphia.blogspot.com/ Markadelphia

    It’s going to be interesting to see how the Right spins PPACA as it starts to fully take effect over the next 18 months. Combine that with the improving economy and one wonders what exactly they will be yelling about in the next election.

    And who is going to listen:)

  • Indigo

    It’s been a long time a-coming. I’m not sure why.

  • Indigo

    Wouldn’t that be an interesting development?

  • http://www.rebeccamorn.com/mind BeccaM

    I’ll say this much: As a small-business owner and entrepreneur, without PPACA, I’d have no insurance at all. I was ‘naked’ as the saying goes, for most of a decade. Now I have insurance, and it’s not bad.

    It’s the first time in that much time without having to pay full retail for simple prescriptions. If I were to get seriously sick or have an accident, my wife would not immediately be thrown into total bankruptcy.

    We do have a long, long way to go though. Premiums are too high, as are deductibles. ‘Bronze plan’ policies under the new regime are nearly useless. There still isn’t enough braking on medical inflation. Patients and families are being gouged outrageously.

    But I have to allow this much: I now have insurance that is as good as what I had before I lost all coverage, and it is affordable. That alone is an improvement.

  • Naja pallida

    Things still remain to be seen here in Texas. Until the federal exchange is available, we’re probably just going to have to suffer. Rick Perry doesn’t want to have anything to do with anything that might actually help people more than corporations.

  • http://twitter.com/MetroIssuesLou Metro Issues :: Lou

    I should have also mentioned that the labor dynamics ushered in by Obamacare may well reduce the labor pool from which corporations can pull employees from. There are many people who only work for corporations because they feel trapped by the necessity for health insurance. Some companies could stand to lose some of their best employees, who will now decide to strike out on their own.

  • http://twitter.com/MetroIssuesLou Metro Issues :: Lou

    Very good writeup. I’ve realized all along how Obamacare would spark significant entrepreneurial activity in this country. I think this is the secret reason why some elements of Corporate Power don’t like it — they don’t want the increased competition.

  • S1AMER

    One more reason: Other people will also have insurance to help cover their own medical expenses, so they’ll have more money to spend on whatever goods or services you’re offering. And many of them will live longer, so they’ll be around for more years to buy your goods or services.

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