Health Care Law Helps Entrepreneurs Quit Their Day Jobs Employer-provided health care can deter people from leaving their jobs to start their own businesses. Analysts say Obamacare could alleviate so-called entrepreneur lock.
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Health Care Law Helps Entrepreneurs Quit Their Day Jobs

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Health Care Law Helps Entrepreneurs Quit Their Day Jobs

Health Care Law Helps Entrepreneurs Quit Their Day Jobs

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Robert Siegel.

There have been many stories about the challenges that the new health care law poses for businesses, especially those with 50 or more employees. Those businesses will eventually be required to provide health care for their workers, or pay a penalty.

But as NPR's John Ydstie reports, there is another group of business people who could benefit from the Affordable Care Act: entrepreneurs.

JOHN YDSTIE, BYLINE: Joshua Simonson has a new, 26-acre farm near Sheridan, Ore.

JOSHUA SIMONSON: Which is in the Williamette Valley of Oregon. And I'm staring at a couple of chickens...


SIMONSON: ...tilling up our flower beds.

YDSTIE: Simonson has lots of chickens roaming around, searching for worms and bugs.

SIMONSON: We're raising just under 3,000 laying hens for pasture-raised eggs that we'll sell into the Portland metropolitan area. And we've got pigs coming in a couple of weeks. And we're planning on doing pasture-raised meat birds as well.

YDSTIE: Simonson and his partner started this farm with the assistance of a group called Friends of Family Farmers. They helped him locate this property. But there was another development that prompted this young entrepreneur to take the leap and start a new business.

SIMONSON: One of the biggest factors was the Affordable Care Act and that our family would be able to be covered by health care, starting the beginning of 2014.

YDSTIE: That convinced Simonson he could quit his job at a Portland-area grocery store, New Seasons Market, which he says provided excellent health care for him and his family. He was reluctant to give that up, especially since he has a pre-existing condition that's prevented him from getting insurance in the private market.

SIMONSON: I was ineligible for any health care. I'd been denied by five different companies because I have back problems. I'd broken some vertebrae in my back, and nobody wanted to cover me because of that.

YDSTIE: What Simonson is describing is his escape from what economists call job lock, or entrepreneur lock.

DANE STANGLER: Entrepreneur lock has proven to be a significant barrier to potential entrepreneurs.

YDSTIE: Dane Stangler is vice president of research and policy at the Kauffman Foundation, which promotes entrepreneurship.

STANGLER: To the extent the Affordable Care Act unlocks that job lock or that entrepreneur lock, one effect is to provide a boost to entrepreneurship overall.

YDSTIE: That conclusion is supported by a study done in 2011 by the Rand Corp. Susan Gates is one of the authors. She says it found that the U.S. system of employer-provided health care deterred people from quitting a job to start their own business.

SUSAN GATES: People considering leaving a job with good health insurance faced a daunting challenge in purchasing health insurance on the individual market.

YDSTIE: The study concluded that challenge was reducing the number of entrepreneurs. It also calculated that making health insurance more accessible and affordable in the individual market could increase self-employment and entrepreneurship by a third.

GATES: And there's no question that the health exchanges provide a set of opportunities that didn't previously exist.

YDSTIE: Dane Stangler believes the ACA could help boost employment by creating somewhere around 25,000 additional new businesses each year. He says he's not overly concerned that the employer mandate for companies with 50 or more workers might hurt entrepreneurship. He says few companies ever get that big.

STANGLER: You know, 95 percent of companies are even below 20 employees.

YDSTIE: And Stangler says the ACA could actually help small firms compete for employees because they could essentially use the exchanges as their health insurance plan. Stangler does worry, however, that by limiting the availability of inexpensive catastrophic policies, the ACA could raise costs too high for some entrepreneurs.

John Ydstie, NPR News, Washington.

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