The ACA and the American Hustle

With a 34% (and growing) freelance workforce, America has become a nation that depends upon access to health insurance without an employer

The Cement Jungle and the Rise of the “Company Man”

Before the Industrial Revolution, America was largely a society of micro, self-sustaining entrepreneurs—also known as “farmers.” Legislation and policy of the time reflected this.

With new jobs and economic opportunity, immigrants and previously rural Americans flocked to American cities. Child labor, unsafe and outrageous working conditions, bloody labor strikes, and risks to public health abounded. Industrial Capitalism grew unfettered and unregulated. Divisions of wealth became extreme. The unregulated financial markets crashed in 1929, taking the U.S. economy with them.

The resulting populist sentiment would be channeled into an FDR presidency where legislation would finally respond to the darker shadows of the Industrial Revolution. The employer would be required and encouraged to act as guardian and protector of their workers’ general welfare. The era of “the company man” had begun.

World War II would further solidify the employer’s role in employee welfare. The war was an economic amphetamine causing unemployment to plummet to extreme lows. Health care became an attractive fringe benefit with rationed consumer goods creating fewer outlets for spending. Health care was declared a tax free benefit in 1943 and was given further advantageous tax treatment in 1953.

These roles solidified amidst post war prosperity—the employee was the earner, tasked with following the direction and control of the employer’s plan to bring in the profits. In return the employer provided protection in the form of a stable paycheck, benefits, and made sure that Uncle Sam got his cut via withholding and paying employees’ payroll taxes. A few decades later, the next revolution was on the horizon...

The End of Inc. Daddy

The current Technology Revolution has ended the era of the strong company and the loyal and dependent worker—much as the Industrial Revolution ended that of the farmer. Once powerful giants of industry have effectively have been unseated by technology, globalization, scrappier startups and market demands for more efficient business models. Yesterday’s Kings no longer own their streets and sidewalks and cannot ensure the protection of their workers as they once did.

As a result, 34% of the U.S. Workforce is currently freelance, temporary or contingent— a number that is expected to reach 40% by 2020. While jobs such as driver or grocery shopper may be the poster children for the gig economy, highly skilled professional jobs are more quietly going freelance — creating contract attorneys, high end consultants, and engineers.

Even non-freelance jobs are beginning to look like long-term contract gigs. Job tenure for U.S. workers continues to shrink. In 2016, the median length of a job was 4.2 years down from 4.6 years in 2014. The median tenure of younger workers (25-34) in 2016 was 2.8 years!

We have become a nation of free agents that can’t expect an employer to provide long- term basic economic stability or health insurance. This shift away from permanent jobs doesn’t appear to be reversing any time soon.

Hustlers Need Health Insurance Too

Before 2010, the United States health insurance system was built for a society of employees. Without the protection of an employer plan, the self-insured were dodging bullets on every corner. Coverage was difficult and expensive to obtain with the most commonplace “pre-existing” conditions (from ADHD to Migraines). The self-insured could easily be dropped from a plan or denied coverage when they became expensive to insure for a variety of “gotcha” reasons. Affordable plans were often complex and contained annual or lifetime maximums that would be quickly maxed out at the beginning of a serious illness. The health insurance system was indeed “rigged” against the self-insured.

This previously niche problem was just rising into the mainstream as the Affordable Care Act [ACA] was developed and passed. In 2005, only 10% of the population reported being freelance. Between 2005 and 2015, all U.S. job growth was in temporary, part-time, freelance, and other “contingent” work. As Dan Lavoie, director of the Strategy for the Freelancers Union explained in early 2015, "Obamacare is part of this new rising infrastructure that's coming up around this new workforce."

Many provisions of the ACA protect the integrity and quality of health insurance, just as employer sponsored group plans and sophisticated HR departments had before. Insurance companies must accept paying applicants and provide coverage for pre-existing conditions. It prohibits lifetime and annual maximums, regulates pricing, and provides subsidies for those who need them. This is made possible and funded by the individual mandate—which spreads risk and cost amongst the entire population—and the budgetary provisions that Congress has already begun to rollback.

An estimated 20 Million Americans (6.3% of the total US population) gained coverage through the Affordable Care Act, but this does not capture those who would have lost health care amidst the accelerating economic shifts of the last 6 years. Nor does it account for the fact that for many, a freelance career was made possible in part by the protections of the ACA.

With Inc. Daddy dead, we are now responsible for our own protection, streets, and sidewalks. To take responsibility for your access to health insurance, you can find your congressional representatives and their contact information here. We, the hustlers, must educate our representatives (who get health care for life) on what access to comprehensive affordable health insurance means to our freelance nation— and that payback time will be at the polls.