Affordable Care Act to launch thousands of Georgia startups

Study outlines healthcare law’s potential to alleviate “job lock”

Long known as a job mecca of the South, Atlanta will become even more attractive for young entrepreneurs this fall. A recent report from the Robert Wood Johnson Foundation (RWJF), the largest public health philanthropy in the United States, estimates that the Affordable Care Act will enable 56,000 Georgians to start businesses in 2014 who would not have otherwise done so. This October, Georgia will join twenty-five states in launching its federally facilitated Health Insurance Marketplace for consumers under the ACA. Following the launch, the report says, “access to high-quality, subsidized health insurance coverage will no longer be exclusively tied to employment.”

The RWJF’s study (The Affordable Care Act: Improving Incentives for Entrepreneurship and Self-Employment) suggests that while Georgia would have 432,000 self-employed in 2014 without healthcare reform, the Peach State may now boast 488,000 self-employed next year when more affordable and accessible health insurance launches in the Marketplace. This figure is explained by a phenomenon called job lock:

“Afraid that they may be denied health insurance coverage because of preexisting conditions, unable to afford the premiums, or lose access to a trusted provider, many workers may decide to stay in their job, even if their skills and talents are not optimally deployed,” the report explains.

Traditionally, non-group coverage plans (also called individual healthcare plans) have commanded higher premiums and deductibles than comparable employer coverage, forcing entrepreneurs to pay a heavy price for their ambitions. The study says employers typically contribute close to 80 percent of their employees’ premiums, while individuals purchasing private plans are left to foot the entire bill themselves. The ACA will unlock opportunities for these individuals, particularly those who are uninsured below the age of 65; 94 percent of them may qualify for tax credits to purchase coverage in the Marketplace this fall.

For an easy-to-digest visual recap of the report, click on the image below.