By Mike Montgomery
For many years, company-sponsored health care was a boon to workers who paid reasonable rates and didn’t have to worry about not being able to see a doctor. But this system had a hidden drawback — it discouraged people from leaving their jobs to set up their own businesses. Even with insurance, a serious medical problem can easily bankrupt a family. For many, the risk of going without it was just too great.
The Affordable Care Act changed all that. It gave budding entrepreneurs a way to leave their jobs, start new businesses and create new jobs. According to figures from the Treasury Department, in 2014 one in five consumers who bought health care on the open market was a small business owner or was self-employed.
It’s no small thing that the ACA unleashed that kind of latent entrepreneurial spirit in many Americans. While it wasn’t the main objective of the ACA, it was a crucial side benefit and one that the government should be doing all it can to maintain.
Instead, there is a bill in Congress proposing to replace the ACA that would, according to the Office of Management and Budget, kick 24 million people off of health insurance by 2026. The new plan would make health insurance more expensive for many people, and without the expanded Medicaid option, budding entrepreneurs who might have left their jobs to start new businesses might instead decide to play it safe. For those gig economy workers already out on their own, this proposed legislation puts them in the precarious position of potentially not having any coverage at all.
This would be disastrous, especially for the gig economy. A recent report from The McKinsey Global Institute found that 20 to 30 percent of the working-age population engage in some kind of independent work. With the continued growth of the gig economy, that number should continue to increase. Companies like Uber and Thumbtack are giving people the freedom to leave dead-end jobs and work for themselves on their own schedules. That means they can work on business plans, write novels or even just spend more time with their families.
The wave of innovation that inspired these new companies is indelibly tied to the ACA. Many young people who work in the gig economy can’t conceive of a world where they don’t have health insurance because they’ve graduated into this economy.
If people lose their health insurance through the ACA, it’s not only going to damage the current gig economy, but also the ability of future innovators to create the next generation of great companies. Whether or not the new health care bill acknowledges it, the future of work is not secure, high-paying factory jobs with good benefits. It’s digital. And whatever that eventually looks like, it’s going to be helped along by legislation that understands the evolving realities of work and by providing the flexible, 21st century safety net people need.
Members of Congress who care about unleashing America’s job growth potential must realize that the current bill is the wrong plan for our times and it risks taking us backwards. America’s entrepreneurs are counting on Congress to get this right.
This piece was originally published in Forbes.