The Senate’s revised health care plan is in the midst of hot debate. While the impact on middle- and low-income Americans has rightly received attention, it is important to bring up another economic impact: The bill would have a chilling effect on entrepreneurship.
Support for entrepreneurship — national tax credits for startups, small-business grants, and streamlined registration of new businesses — has always been a bipartisan issue. Almost 90 percent of all businesses in America have fewer than 20 employees. Startups have created 15.5 million jobs since early 2010.
My company was one of those startups. But back in 2008 I might not have started my business — or sustained it long enough to create new jobs — if I had not had access to health insurance.
When I started my organization, I was 32 and did not have access to a spouse’s employer-sponsored insurance. I also didn’t have children, a situation that usually incurred higher insurance premiums. I had a startup grant with a small stipend for health insurance.
But I lived in Massachusetts, which two years prior had passed health care reform legislation mandating individual insurance, setting subsidy and coverage levels, enforcing minimum coverage standards, and establishing the Health Connector Web-based insurance exchange that predated (and provided a model for) the Affordable Care Act. From the comfort of my computer, I found a plan I could afford that provided the services I needed.
Nine years later, my organization has grown and thrived. Now I can provide employer-sponsored insurance, but reaching that milestone took years. Would I have chosen not to start the company without Massachusetts’ ACA-like options? I might have taken the leap, but I could not have afforded to stick out the lean years. Instead, I have grown the company, created jobs, and contributed to the economy here in Massachusetts, across the country, and around the world.
The Senate is now in the process of debating a bill that in many ways resembles the one that passed in the House. Its current provisions would allow states to redefine Medicaid eligibility and subsidy levels, eliminate the essential health benefits (including childbirth) from individual insurance, and weaken the requirement for community-rating for individual plans.
What would this mean for entrepreneurship? Some states — Massachusetts likely included — would choose to continue offering ACA-like programs and supporting aspiring entrepreneurs to start their businesses. Many states would not. In these states, the only people who could start new businesses would be young, healthy men with no preexisting conditions who either had enough savings to pay for an individual plan or a spouse with employer-sponsored insurance.
Narrowing the opportunity for entrepreneurship to this small pool of people would be disastrous for states that need new industries and new jobs. Our economy needs the participation of all aspiring entrepreneurs. And to make their aspirations realities, entrepreneurs need health care.
Nina Dudnik is founder and CEO of Seeding Labs and a Public Voices Fellow with the OpEd Project.