Health Care Reform: Self Employment and 'Obamacare'

Jan 31, 2011
KC Morgan

Health Care Reform - Medical Doctor - Kurhan

The left says it's a much-needed health care reform. The right says it's the root of all evil. Where do the self employed fall when it comes to "Obamacare?"

At President Barack Obama’s most recent State of the Union address (his second), the Commander in Chief won a hearty round of laughter for commenting on the "rumors" he’s heard that "a few you of have some concerns about our new health care law." But for self employed professionals, health care reform -- or, as the press calls it, Obamacare -- is no laughing matter. Rhetoric aside, what’s the reality of health care reform for small business owners and other self employed workers?

The First Fix

During his remarks about health care reform, President Obama said that he is open to improving the law and hearing ideas, starting with "a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses." The Huffington Post explains that Obama is referring to a small provision in the bill that requires business owners to submit a 1099 form for every purchase of goods and/or services that total over $600 USD.

The solution? A regulatory system touted by the President in the Wall Street Journal. But this is only the first fix in a newly-reformed health care system that some analysts say is not cost-effective for self employed professionals.

Health Insurance Under Reform Bill

Many small business owners and other self employed professionals welcomed the idea of health care reform because it promised cheaper health insurance costs. The overwhelming burden of health care makes the cost of working at home too high for some professionals, but some analysts say that the President’s new health care plan won’t bring the relief that so many need.

Self employed professionals may pay higher health care costs than most. By an odd quirk of the system, individual policies are often the costliest type of health care, with the fewest options and the lowest coverage -- with the exception of extremely expensive policies that aren’t feasibly affordable by average self employed professionals.

The health care reform bill will give government a slightly more active role in health care…though not as much as originally intended. For now, the government’s official website offers tips and information to help self employed professionals search for individual health plans. Beginning in 2014, tax credits will be given to low-income self employed professionals. Also in 2014, individuals will have the option of looking for policies through a health exchange, a marketplace where insurance companies compete for clients. Neither provides a highly-promising solution for today’s independent professionals.