Wednesday, June 29, 2022
Margaret Blume-Kohout (Gettysburg College), Entrepreneurship Lock and Demand for Health Insurance: Evidence from the Affordable Care Act, SSRN (2022):
In the United States, most labor force participants have health insurance plans sponsored and subsidized by their employers. The Affordable Care Act (ACA) improved and expanded the availability of non-employer-based health insurance, with protections for pre-existing conditions, guaranteed issue, and community rating in non-group markets. This paper uses nationally-representative survey data for 2009-2018 and a difference-in-difference modeling approach to examine the effects of the ACA’s health insurance expansion on U.S. adults’ probability of self-employment. Results indicate that the probability of self-employment increased by 1.5 percentage points among adults ages 30 to 64 who have one or more pre-ACA declinable medical conditions and no alternative source of health insurance through a spouse’s employer. Transitions into self-employment increased by 1.3 percentage points, and the probability of full-time self-employment increased by 1.1 percentage points. Evidence indicates that the ACA’s provisions effective in 2014 reduced entrepreneurship lock in 2015 and 2016 among adults with higher demand for health insurance. However, these effects were short-lived. As political uncertainty about the long-term viability of the exchanges increased in 2017 and 2018, the probability of self-employment among individuals with high demand for insurance fell back to pre-ACA levels.