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Has DC Health Link Unleashed an Entrepreneurial Spirit in District Residents? (Washington City Paper)

Friday, October 23, 2015

After seven years at the same job, Alka Pateriya had begun to think about striking out on her own as an independent consultant. But it wasn’t until late 2013—by which point she’d been working at the research company Westat for nearly nine years—that she began making moves.

Up until that point, Pateriya suffered from “job lock.” The term refers to people who find themselves stuck in their jobs because they can’t give up benefits like health insurance. Pateriya had pondered the freelance life as early as 2011, but when she shopped around for health insurance plans comparable to what Westat provided, she couldn’t afford the $800 to $900 per month that insurers would charge her.

That changed for her in late 2013, when DC Health Link, the health insurance exchange the District created under the Affordable Care Act, began enrolling District residents in health insurance plans.

“That was when I started getting serious,” Pateriya says, calling access to affordable health insurance the “driving decision” in her career change.

She put out feelers with clients she had worked with before, to see whether she’d be able to making a living as a freelancer. In March of 2014, she quit her job and began consulting on her own. The health insurance she received through Westat expired at the end of March, and the plan she found on DC Health Link, which cost her $440 per month, kicked in the next day.

For wonks who like the Affordable Care Act, Pateriya’s story is a feel-good tale that lets them present the polarizing law as something more than another costly entitlement. If the law can chip away at job lock, maybe it can have some appeal for free-market types as a way to unleash entrepreneurism and reduce friction in the labor market.

Detractors don’t want Obamacare infringing on their freedom, but the law gave Pateriya hers.

“You just have the freedom on both ends to test out, ‘Is it a good fit for me? Is it a good fit for [the company]?’ without jumping into another long commitment,” Pateriya says.

Six months into working for herself, she was hired full-time by one of her freelance clients, an education startup based in Massachusetts. Neither the tiny company nor Pateriya, who lives in Glover Park and works remotely, would’ve been willing to commit to a permanent, salaried position before they each had the chance to try working together.

But skeptics wonder how common stories like this are.

Katie Vlietstra, vice president of the National Association for the Self-Employed, doubts that a vast number of people “were unhappy with their typical corporate nine-to-five jobs and felt, with the exchange, that they could jump into self-employment. Because I think the path to self-employment is very different.”

Giving up a reliable paycheck to work for oneself requires a risk-taking personality and a willingness (and ability) to tolerate the lean years. “It’s also incredibly cumbersome to start a business,” Vlietstra notes, throwing a jab at D.C.’s much-derided Department of Consumer and Regulatory Affairs.

NASE isn’t an unbiased observer. Vlietstra’s organization offers many perks to its paid members, including access to group health insurance plans. DC Health Link is NASE’s competition. (A spokesman for NASE says the average cost of health insurance premiums obtained through NASE is “hard to estimate because it depends on a range of variables.”) But Vlietstra is right: The extent to which the Affordable Care Act has eased job lock is unknown.

In 2013, a senior fellow from the Urban Institute and two Georgetown University professors authored a paper estimating that 3,000 people in D.C. would become self-employed in 2014 as a result of the Affordable Care Act’s reforms. The estimates relied on benchmarks from previous studies that examined job lock, including one that found a bump in self-employment among people who become eligible for Medicare.

But according to Linda Blumberg, the co-author from the Urban Institute, there are no empirical estimates yet of how the Affordable Care Act in particular has affected job lock, in D.C. or nationwide. DC Health Link does not collect job information on individual-market customers.

Victoria Lai seems to be someone who found liberation from job lock through DC Health Link.

In 2010, Lai joined the Department of Homeland Security as an attorney working on immigration policy. In January 2014, she resigned to devote herself full-time to making ice cream. That’s the same month that coverage began for the first DC Health Link plans. Within a few weeks of leaving her stable job, Lai was enrolled in health insurance that she obtained through D.C.’s exchange.

But ask her about the timing, and Lai will tell you not to connect the dots.

“If it weren’t easy for me to find health insurance, I probably would have left my federal government job and all my benefits anyway,” she says.

Lai had been making ice cream as a hobby for years, eventually becoming a member of Union Kitchen, which provided her with production space. In 2013, she started to sell half-pints to a few retail stores in the District, under the label Ice Cream Jubilee.

But she still had her day job as a lawyer for the federal government, and she wasn’t desperate to break out. Lai says she enjoyed government service and the role she was able to play in policymaking.

“It all happened pretty suddenly,” in August 2013, she says. “I was asked to take a look at the Capitol Riverfront neighborhood, where I eventually opened up the store.” Lease negotiations grew serious later that year.

Lai, who describes herself as “a healthy 30-something,” says health insurance wasn’t on her mind as she weighed whether to leave her job. When she resigned from the her job in January 2014—six months before Ice Cream Jubilee opened its storefront at 301 Water St. SE—she signed up for DC Health Link over the phone.

Last month, Lai hurt her ankle and visited an orthopedic surgeon. Her co-pay for the consultation was $30. Access to health insurance didn’t turn Lai into an entrepreneur. Still, she says, “I’m glad I’m insured.”

See the article on Washington City Paper here.

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