By Joe Lawlor
Portland Press Herald, Maine.
Lisa Mae Parker loves baking and had long desired to launch a home-based business, but for most of the last two decades, she kept her aspirations at bay to work jobs so she could have health insurance.
“I was miserable, and I was making everyone else around me miserable,” said Parker, 54, of Parsonsfield, who had worked in retail and at grocery stores since the 1990s. “It was hard for me to go to work for somebody else, punch a time clock and not be creative.”
But this fall, Parker began Cakes for All Seasons — her home baking venture — and she’s now busy designing elaborate gingerbread houses and wedding cakes.
Parker says the Affordable Care Act gave her the freedom to leave her job and join the ranks of the self-employed.
Some economists and health experts say the ACA is spurring people to quit their jobs to pursue self-employment — and the trend is already starting to reap benefits for the economy as people feel free to pursue their desired careers. While the numbers are just starting to roll in because key ACA reforms have been in place less than a year, a 2014 report says 7,000 more Mainers will be self-employed in the coming years, in large part due to the new law. Also, more people in 2014 are choosing to work part time, for similar reasons, according to another study.
“Baking is my passion,” said Parker, who acquired insurance this year through the ACA. “This is always what I’ve really wanted to do.”
Parker said 21 years ago she also started up a home baking business, but with a young daughter at home, she had to shut it down in order to take a job that offered insurance benefits.
This time, she said, she can focus on her business and not be concerned about health insurance.
Health policy experts say being released from “job lock” — a phenomenon in which people work at a job not because they want to, but primarily to maintain health benefits — will help make the economy more efficient by more closely matching employers and employees. Those who prefer to become self-employed — or convert to a part-time position — can do so without having to pay for expensive individual policies or go without insurance.
The Urban Institute, a left-leaning Washington, D.C.-based think tank, estimates in a 2014 study that about 7,000 more Mainers — and 1.5 million people nationwide — will choose to be self-employed as a result of the ACA, an increase of about 10 percent.
Health experts say that’s because the ACA makes non-employer-based insurance less costly by subsidizing benefits obtained in the new health insurance marketplace. Employer-based insurance typically is designed so that the company pays at least half the cost of health benefits.
Before the Affordable Care Act’s marketplace started this year, individuals purchasing benefits would pay the entire cost of the insurance policy, which made the benefits much more expensive.
To correct the price disparity between individual and employer-based insurance, the ACA’s marketplace provides subsidies on a sliding scale for families earning up to 400 percent of the federal poverty level, or about $95,000 per year for a family of four.
Parker said she had looked into individual insurance before the ACA, and she couldn’t afford the $800 monthly premiums insurance companies charged.
Parker declined to reveal her income to the Press Herald, but she said she qualifies for subsidies and pays about $250 per month, with a $2,000 deductible. She said the cost is within her budget, allows her to see primary care doctors without worrying about the cost and gives her peace of mind. Parker left her job at Hannaford’s about two years ago to go to a culinary school in Chicago, leaving her without insurance for a few months while waiting for the ACA’s marketplace to open in 2014.
“That made me pretty scared,” Parker said. “But I’m a lot less nervous now.”
PART-TIME WORK GAINS APPEAL
Mitchell Stein, a Cumberland-based independent health policy analyst, sees a twofold benefit in people leaving companies to work for themselves. It will open up more jobs for the unemployed or underemployed, he said, and boost the economy as the entrepreneurs bring more innovative products to market.
“More people will be willing to take risks. It’s a numbers game. When you have more people trying to invent something, more people will succeed,” said Stein, who has a master’s degree in business administration and has studied the insurance industry for many years.
Stein said, for instance, that midlife professionals nearing retirement can launch that business they’ve always dreamed about, or young families can forgo cubicle jobs to create a tech-based startup.
Mary Henderson, 57, a former policy analyst for the nonprofit advocacy group Maine Children’s Alliance, said she left her job in December 2013 to start a consulting business in large part because she could now buy insurance in the marketplace. Henderson said the demands of her job were wearing on her, and she needed a change.
“I could see it wasn’t good for me in the long term to maintain that pace,” said Henderson, who does consulting work on a variety of public policy topics, including health care and children’s issues. “Instead of hanging onto a job that was exhausting me, I can now scale back and work at a pace that’s better for me.”
Henderson said it “would not have been possible” for her to leave her job had she not been able to purchase ACA insurance. She said she pays a $383-per-month premium and has a reasonable deductible.
Another trend is people choosing to go from full-time to part-time employment. Most employers do not offer benefits for part-time employees, but the ACA marketplace makes it easier to choose to work part time and still be able to obtain benefits.
According to the Center for Economic and Policy Research, a progressive Washington, D.C.,-based think tank, the first seven months of 2014 saw an increase in people voluntarily working part time, a 2 percent increase from last year. Among those ages 16-35 with children, the increase was 11 percent, suggesting that young parents were choosing to work part time to spend more time with their children and yet still have health insurance, according to the center, which was citing U.S. Bureau of Labor Statistics reports.
Voluntary part-time workers are those who prefer to work part time, as opposed to workers who would rather work full time but can find only part-time work.
The think tank said although it’s too early to draw sweeping conclusions, the data are “consistent with the view that many workers are now able to work at jobs that are more in line with their family responsibilities.”
MORE TIME FOR PERSONAL PRIORITIES
Emily Brostek, executive director of Consumers for Affordable Health Care, an Augusta-based health policy advocacy group, said people are starting to choose different careers or convert to part-time work for a number of personal reasons, now that they no longer need to work full time to obtain health benefits. Consumers for Affordable Health Care, in addition to advocating health policies, helps people sign up for marketplace insurance.
“It’s definitely happening now, and it will happen more and more as people spin out what this means for them personally,” Brostek said. “For instance, we hear a lot about people nearing retirement, and maybe they’re caring for an aging parent. They still want to work, but they often don’t want to work as much.”
For Nancy MacDonald, 57, of Cumberland, the ACA will allow her to scale back her hours at Starbucks, which were infringing on her business as a freelance book editor.
Starbucks is an atypical employer in that it helps pay for health insurance for part-time workers, but MacDonald said in order for the company to pitch in financially for insurance, workers are required to work at least 20 hours per week.
“I was making four times as much as a book editor than as a barista, so as long as I was working 20 hours at Starbucks, that was 20 hours I couldn’t work as a book editor,” MacDonald said. “I was starting to get more clients, and it was getting difficult trying to get everything done.”
She said before she started working at Starbucks, she was paying $500 per month for a catastrophic policy with a $5,000 deductible. She said she found herself avoiding medical care because her insurance didn’t cover anything.
MacDonald said for 2015, she will cut back her hours at Starbucks and purchase insurance in the ACA marketplace. She said the plan she’s considering will cost about $240 per month with a low deductible, about $500.
Parker, the baker from Parsonsfield, said her business is already paying dividends — financially and for her overall happiness.
“I can create a finished product, and when I deliver it to the client, 99.9 percent of the time it’s a happy occasion and people are happy to see you,” Parker said.