Many Jobs Will Be Impacted by Health Care Reform

Published: Tue 27 Apr 2010

Thomas Kristoffersen

Experts vehemently disagree on how health care reform will impact jobs. The Center for American Progress, for example, predicts that the law will add four million new jobs to the economy in the next ten years. By contrast, the Heritage Foundation predicts that 690,000 jobs will be lost as a result of health care reform. How can the two figures be so disparate?

Although the overall effect on the job market remains uncertain, it is obvious that certain occupations will fare better than others under health care reform. The three jobs most likely to be affected are summarized below.

Insurance Agents

Insurance agents will likely see more business since roughly 32 million Americans without coverage will have to purchase health insurance beginning in 2014. Those who go without coverage will have to pay a fine of $695 or 2.5 percent of their income, which creates a powerful incentive to obtain at least minimal coverage.

Conversely, insurance agents may actually suffer in certain ways. For one, new regulations require health insurers to use at least 80 percent of their premium dollars for claims on family and individual health plans. In other words, only 20 percent of their revenue is left over to pay for all remaining operating costs, and that includes commissions for agents. The result will be smaller commissions or fewer agents. Second, consumers will be able to access new insurance exchanges to make buying family and individual health insurance easier. This may reduce consumers' need for agents.

Physicians

Some doctors will enjoy higher Medicare payments under health care reform. Physicians such as internists, family doctors, geriatricians, and pediatricians can qualify for 10 percent incentives in certain cases. Surgeons who practice in underserved areas can also qualify for the 10-percent incentive, and psychotherapists will receive a Medicare payment increase of five percent.

Despite the higher payment levels, critics maintain that payments overall still remain far below market value and substantially lower than what physicians receive from private insurers. The result is that many doctors and hospitals, including some branches of the Mayo Clinic, have stopped accepting patients covered by Medicare. Consequently, in spite of the payment increase, doctors may not benefit from the health care reform law ultimately because more Americans will be eligible for Medicaid and Medicare than ever before.

Entrepreneurs

The self-employed and entrepreneurs may be the improbably victors under the new health care reform law. Before the law, large group insurance plans offered by employers had numerous advantages over individual plans. As a result, the ease of securing high-quality medical insurance through an employer may have often served as a deterrent for those who might otherwise consider self-employment or entrepreneurship.

The provisions of the healthcare law seek to level the playing field and allow entrepreneurs to purchase health insurance with more transparency and, theoretically, lower rates through new insurance exchanges. The only way entrepreneurs might lose out is if they would have chosen cheap catastrophic medical plans because the new law will require minimum benefit levels from the plans sold in insurance exchanges.