Independent contractors and freelancers make up an increasing share of the workforce, yet Washington is largely neglecting the market where self-employed workers get health insurance. That's bad news for people in the burgeoning "gig economy," where work is divorced from an employer — and thus from employer-sponsored insurance.
Why it matters: The Affordable Care Act sought to make the individual market more affordable and competitive. Today, though, those benefits are concentrated heavily toward lower-income consumers who get a subsidy to help pay their premiums, and Congress hasn't shown much interest in stabilizing it. But that market will be growing.
Key quote: "Obamacare and the gig economy were a match made in heaven," said the Kaiser Family Foundation's Larry Levitt. "But, with instability and rising premiums in the individual market, especially for people not eligible for subsidies, it’s not as good a solution for gig workers as it was initially."
The big picture: “The future of work looks like its going to be fairly erratic and unstable at times for workers, so we should be preparing for that," said Brookings' Mark Muro, one of the authors of a new post comparing the gig economy to more traditional payroll jobs.
- Health care is one of the most valuable benefits workers have traditionally gotten through their employers. People who are self-employed or have a job that doesn't offer coverage would turn to the individual market.
"This is a long-term problem we’re not paying enough attention to if the individual market continues to tank.”— Chris Sloan of Avalere
Yes, but: This may be an area where the Trump administration's health care agenda could help. The administration is expanding access to association health plans, or AHPs, which allow similarly situated individuals to band together and buy insurance almost as if they were a company.
- “In theory, this Congress ... should enact rules that make the individual market a more functional market and enact rules that recognize the growth of the gig economy. But the political environment in Congress doesn’t permit that," said Chris Condeluci, a health care lawyer and former GOP policy staffer.
- "So the next best thing…is to come up with alternatives” like the new AHP rule, he continued, “which is more or less serving as another option for independent contractors who are right now stuck in the individual market.”
Some experts caution that these plans are more likely to benefit healthy people, as they could offer less comprehensive benefits than ACA plans. They also could skew towards benefitting urban workers.
- “It’s the same issue we have in the individual market…it’s the places that don’t have large populations where you’re seeing only one option," Sloan said. "AHPs, they’re not really designed to solve that.”