Health care access will fuel the Great Resignation

Americans are leaving their jobs in record numbers. Roughly 4 million people—nearly 3% of the entire workforce—quit in October, according to recently released data from the Bureau of Labor Statistics. Some retired; others decided to stay home with kids; but most simply switched to new roles that offered better pay or were more fulfilling.

This “Great Resignation” may ultimately be a good thing for our economy—and society. Sure, turnover creates temporary headaches for businesses. But we enjoy faster growth and a happier, healthier populace when workers can find jobs that better match their skills and interests. A high quit rate can actually be a sign of a robust economy.

Fortunately, Congress could soon make it even easier for workers to find jobs they enjoy.

Right now, many people don’t look for new opportunities because they’re dependent on health benefits through their current employer. A recent Gallup poll found that one in every six workers is staying in an unwanted job for fear of losing such benefits.

Earlier this year, lawmakers made coverage through the Affordable Care Act exchanges considerably less expensive. Now they’re on the verge of extending those subsidies for several more years, or even permanently. If more workers realized how affordable coverage in the individual market has become, more Americans would feel comfortable leaving their jobs. We’d have a more dynamic economy as a result.

Unlike citizens of other countries, where people either get coverage through the government or directly from various insurers, most Americans get health benefits through employers.

This system has never made much sense. After all, nobody expects their company to provide car insurance or homeowners insurance. So why do we get health coverage through work?

It was mostly an accident of history. In 1942, President Franklin D. Roosevelt froze wages to prevent inflation. To compete for workers, companies started offering generous health insurance. Then, in 1943, the IRS exempted employer-based health insurance from taxation, a designation that persists to this day.

Ever since, businesses and workers have realized that it’s cheaper to give (and receive) an untaxed dollar in health benefits, rather than a taxed dollar in salary or bonuses.

This status quo, which big corporations love, keeps people locked into jobs they would otherwise leave. The dominance of employer-sponsored insurance also meant that, for decades, the market for people seeking to purchase health coverage directly was small and dysfunctional.

The 2010 Affordable Care Act (ACA) finally started to change the equation. It created online marketplaces where individuals can shop for health insurance, as well as a system of income-based subsidies to make plans more affordable.

The ACA was a boon for an increasingly mobile and independent workforce. Suddenly, losing or leaving a job didn’t have to mean losing coverage. Employers no longer dictated what benefits workers could access, and the millions of Americans left out of the World War II–era system obtained one of their own.

The reform was particularly revolutionary for freelancers. The proportion of freelance workers who had health insurance increased from 64% in 2013 (the year before ACA plans were first available on the federal exchanges) to 83% in 2016. It created the first truly “portable benefit,” which workers can take from job to job, and provided premium subsidies that lower the cost of coverage for Americans with lower incomes.

Not coincidentally, the number of Americans who freelance at least part-time grew 11% to 59 million between 2014 and 2020. All told, the number of freelancers in the U.S. Is expected to hit 86.5 million people, or just over half of the total labor pool, by 2027.

Yet even some longtime freelancers may not realize that their options have broadened significantly since the ACA was enacted. In March, the American Rescue Plan Act expanded eligibility for insurance subsidies, so that those making more than 400% of the federal poverty level now qualify. This increases the number of people who can get a subsidy by 20%, according to the Kaiser Family Foundation.

The American Rescue Plan also increased assistance for people with lower incomes. Altogether, it reduces annual premiums for 9 million Americans by an average of $600 per person. Workers can sign up for an ACA plan, as well as these expanded subsidies, during open enrollment, which lasts until Jan. 15 in most states.

The boosted subsidies are currently temporary, lasting two years. The Build Back Better Act, now before Congress, would extend them until 2025. Yet lawmakers can go one step further and expand the subsidies for good.

Doing so would be an important acknowledgment that the workforce has changed permanently and the health care safety net must change along with it. The vitality of our future economy and workforce depends on it.

Brent Messenger is the vice president of public policy & community engagement at Fiverr. Noah Lang is the CEO and cofounder of Stride Health.