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November 23, 2014

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With health law, workers ponder the I-Quit option

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Jeff Roberson / AP

Stephanie Payne poses for a photo Monday, March 17, 2014, in St. Louis. Payne, 62, plans to plans to retire early from her nursing career and take advantage of health care coverage offered through the Affordable Care Act, allowing her spend more time pursuing other interests while not being tied to employer-sponsored coverage.

CHICAGO — For uninsured people, the nation's new health care law may offer an escape from worry about unexpected, astronomical medical bills. But for Stephanie Payne of St. Louis, who already had good insurance, the law could offer another kind of escape: the chance to quit her job.

At 62, Payne has worked for three decades as a nurse, most recently traveling house to house caring for 30 elderly and disabled patients. But she's ready to leave that behind, including the job-based health benefits, to move to Oregon and promote her self-published book. She envisions herself blogging, doing radio interviews and speaking to seniors groups.

"I want the freedom to fit that into my day without squeezing it into my day," she said.

One of the selling points of the new health care plan, which has a March 31 enrollment deadline, is that it breaks the link between affordable health insurance and having a job with benefits. Payne believes she'll be able to replace her current coverage with a $400- to $500-a-month plan on Oregon's version of the new insurance exchange system set up under the law.

Federal experts believe the new insurance option will be a powerful temptation for a lot of job-weary workers ready to bail out. Last month, congressional budget analysts estimated that within 10 years, the equivalent of 2.5 million full-time workers could be working less because of the expanded coverage.

But is the new option a gamble? That's a matter of debate, not only among the politicians who are still arguing furiously over the law's merits, but among economists and industry experts.

"We don't know what the future of exchange insurance will be," said economist Douglas Holtz-Eakin, president of the American Action Forum, a center-right public policy institute. Premiums should remain stable if enrollment picks up and broadens to include younger, healthier people. But if older, sicker people are the vast majority of customers, prices eventually could spike.

For Mike Morucci, 50, the idea of leaving his information technology job and its health benefits is "terrifying," he said.

But he decided to take the plunge after reviewing the range of coverage available at different price points. Tax credits will help those with moderate incomes pay their insurance premiums. And coverage is guaranteed even for those with pre-existing conditions. Twenty-five states also agreed to expand their Medicaid programs, providing health care for more low-income people.

"It definitely freed up my thinking when I thought, 'Do I want to give this a go?'" Morucci, of Ellicott City, Md.

Morucci has been writing scripts at night and on weekends for four years and is on a team of writers for a web-based comedy series titled "Click!" launching this spring. Before giving notice at the job he had held for 18 years, he made a spreadsheet of health plans available on the Maryland exchange and found one for $650 a month to cover him and his 23-year-old daughter.

"I turned 50, so for me it's time to focus on my passion instead of my paycheck," he said.

The United States has been unique among industrialized nations in tying insurance and employment closely, said labor economist Craig Garthwaite of Northwestern University, who co-authored a frequently cited study on how the health law may break what's known as "job lock." Even in Germany and Japan, where insurance remains private, people who can't afford it get public assistance and coverage is guaranteed.

Job lock "forces people to work at jobs that are not suited to their talents just to get benefits," Garthwaite said. "Economists tend to think that's a bad thing."

In congressional testimony this month, Health and Human Services Secretary Kathleen Sebelius said that "people will have some choices that they don't have today" including farm families who "will have the choice of not having to have an off-farm job to get health insurance for the family."

However, one rub may be the cost. The insurance on the new marketplace is often more expensive than what a worker has now because employers often make large contributions to premiums.

The average annual premium paid by an employee is $999, according to a recent Kaiser Family Foundation survey. In the new markets, the average annual premium is $5,558 for a 50-year-old and $8,435 for a 60-year-old, according to an analysis run for The Associated Press by HealthPocket.

But some employers are cutting back on their contributions, narrowing the gap.

At this point, Americans over age 50 are most likely to take advantage of the new freedom, Garthwaite said. They're ready for a career change and may have enough savings to take a risk.

Pamela Mahoney, 50, of Los Gatos, Calif., decided to leave a job in corporate communications when the U.S. Supreme Court upheld the health care law.

"I about did cartwheels down the hall," she said of hearing the court's decision. In January, she joined her husband full time in the communications company, BlueChair Group Inc., they co-founded. They recently chose an insurance plan for $1,100 a month on the California marketplace.

She was able to get coverage despite having asthma, a pre-existing condition that might have made her uninsurable before the new law guaranteed coverage.

"Prior to the Affordable Care Act, I felt bound to be an employee rather than a small business owner," she said. "There's something to be said for having your own business and being in control of your own destiny."

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