My daughter turned 26 this past fall and is no longer covered by my health insurance. She had the misfortune of graduating from college with a Masters in bassoon performance right in the middle of the Great Recession. Though she has an advance degree from the Cleveland Institute of Music, finding a full-time position with an orchestra or symphony has been elusive so far. Being the bright, energetic young woman that she is, she formed her own quintet and she has been eking out a modest living, supplemented, of course, by waiting tables. While she’s paying her own bills, she does not have to kinds of resources needed to purchase health insurance on her tiny income.
Yesterday, she applied for health insurance through the Healthcare.gov website and, thanks to the federal subsidies, now has a Silver Plan for just $80 a month. Thanks, Obama.
I relate this story because one of the often overlooked success stories of the Obamacare is that it is unleashing entrepreneurship across the country. No longer are people stuck in jobs they hate simply to keep their health insurance. No longer are Americans like my daughter forced to abandon their careers and dreams to take a job that provides health insurance. Countless Americans are now pursuing their dreams, creating new companies, and following their bliss without having to walk the perilous tightrope of not having health insurance. And, every time someone leaves their job to start their own company, they open up a position for someone else.
The impact of this on our economy cannot be understated. Consider this:
We often hear that small businesses are the engines of job creation in the United States. Their value and the role they play in our economy is sometimes underestimated because, they are in fact, small. But the truth is there’s nothing small about the impact they have on our economy.
According to Entrepreneur Magazine there are between 25 million and 27 million small businesses in the U.S. that account for 60 to 80 percent of all U.S. jobs.
That was written before Obamacare was implemented.
Or consider this, too:
Ideas and concepts that emerge from entrepreneurs increase our knowledge and what consumers may prefer through introducing variations of existing products and services in the market. This speeds up innovation of new products in the market as a result of the longer working hours and more efficient nature of entrepreneurs as their income is directly linked with their working input. Entrepreneurship leads to introduction of new goods with new quality and value. Their innovativeness introduces new ways of production and new markets that have not been exploited. It is through entrepreneurship that new source of supply are discovered and creation of new business organisations that directly affect the economy. Creation of new business opportunities through entrepreneurship, productivity and innovation leads to economic growth. This, therefore, means that when there is more entrepreneurship in an economy more growth is expected.
The ability to start your own company (or wind quintet) and to pursue an entreprenurial path has been made profoundly more accessible to Americans thanks to the ACA. It will likely be some years before the economic impact of that can be accurately measured but, make no mistake, it’s going be significant. One study estimates that as many as 1.5 million more people started new companies this year as a result of the ACA. Check out this infographic from the Robert Wood Johnson Foundation:
That study estimates that 27,000 new businesses will be created this year in Michigan alone thanks to the ACA.
It goes without saying that, because the ACA will to have a measurable impact on our economy, it will contribute significantly toward reducing our deficits and national debt.
An added but unquantifiable benefit is having so many more people pursuing their dreams. That can’t help but raise something I call the Happiness Quotient of the USA and that, I suggest, is a very, very Good Thing.
You can read more about the unleashing the economic power of entrepreneurs by the ACA at the following links:
- Health Care Law Helps Entrepreneurs Quit Their Day Jobs | National Public Radio
- Affordable Care Act Could Be Good for Entrepreneurship | New York Times
- Four Reasons The Affordable Care Act Is A Boon To Entrepreneurs | Forbes
- The Affordable Care Act: Improving Incentives for Entrepreneurship and Self-Employment | The Urban Institute
- Obamacare Could Lead To 33% More New Businesses Over The Next Few Years | Business Insider
[CC photo by Will O’Neill | Flickr]