Will PPACA Free the Workers?

Policymakers probably won’t know how the Patient Protection and Affordable Care Act of 2010 (PPACA) will really affect job lock until PPACA takes effect.

Andrew Sherrill, a director at the U.S. Government Accountability Office (GAO), gives that assessment in a review of the possible effects of PPACA on job lock, or the tendency of workers — especially workers with health problems, or dependents with health problems — to stay with jobs they would otherwise leave because of a need to keep health benefits.

If PPACA takes effect as written and works as expected, it is supposed to require most large employers to offer health coverage or pay a penalty, and it is supposed to give individual consumers the ability to buy coverage on a guaranteed issue, mostly community-rated basis.

Small businesses are already starting to get PPACA tax credits that are supposed to help them pay for health coverage, and small businesses are supposed to get new coverage tax subsidies starting in 2014.

“The studies we reviewed generally found those workers who rely on their employer-sponsored health benefits are less likely to change jobs, leave the labor market, become self-employed, or retire when eligible, compared to those who have access to alternative sources of coverage,” Sherrill says. “For example, one study found men with employer coverage were about 23% less likely to leave a job compared to those who also had access to coverage through a spouse.”