Health Care Reform: One Little-Discussed Plus of New Law - Job Mobility

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By IBTimes Staff Reporter | September 12, 2011 10:50 AM EST

It's been overlooked -- it's received very little coverage by the popular press -- but it's worth repeating: one benefit of the health care reform legislation will be: enhanced "job mobility."

Employee mobility is one of those terms that probably most Americans have not read too much about, but in-a-nutshell it is this: the freedom of workforce participants to move into their high-value field or work in the job of their choosing. 

The opposite is called "job lock' -- the situation that existed before the Obama administration's 2010 U.S. Health Care Reform Act reform U.S. health care delivery.

However, don't misunderstand: a bill that prohibits discrimination by insurance companies due to medical condition/history and that provides substantial subsidies for those who don't have health insurance from their employer, and that also offers much-needed tax breaks for small businesses who do provide coverage, is a major accomplishment: it's big change and it's big news.

The health care reform bill passed, represent the biggest social policy advance by the United States since the passage of Medicare in 1965, and it would rank third behind the latter and the establishment of Social Security of 1935 in terms of social safety net significance.

One Major Benefit of 2010 U.S. Health Care Reform Act: Job Mobility

But Americans should not overlook the impact health care reform will have on Job mobility.

Right now, millions of professional and blue collar employees are remaining in current jobs, not because it's their preference, but because of their health care plan. In some cases, it's health care for a spouse and/or dependent: the employee knows that a job shift with a health plan shift may jeopardize coverage/benefits, hence they stay put. True, job mobility also declines cyclically during recessions -- there simply are fewer openings during contractions -- but the health care factor has been an impediment to mobility in the U.S. economy for decades.

However, if the United States moves to a universal health care system - one where every American has an opportunity to purchase  health care insurance at an affordable rate (via subsidies) if a plan is not offered by their new employer, or if they can't afford a private plan - that eliminates a great deal of the 'health care coverage risk' that currently exists in the system.

The significance? Employees seeking a promotion, a career change, or a  better work environment, will now make that change, and not remain in their current company/organization simply to retain health benefits. That will lead to a more-efficient and appropriate allocation of talent in the U.S. economy -- and free-up hundreds of thousands of jobs.

Benefits Portability: A Plus for Employees, Economy

And there will be positive implications for business formation, innovation, and U.S. GDP growth. Here are some examples:

-A advertising professional wants to start a new company, but doesn't, for fear that a health insurance shift will prevent his wife from continuing to receive health care benefits, because she has a serious pre-existing condition. With health care reform, he starts that new company, because his wife receive care coverage whatever plan he chooses. The law will require it.

-A 40-something wants to head back to graduate school for an advanced chemistry degree, but he doesn't, due to concerns about obtaining affordable health care insurance outside of his current employee. Under health care reform, he enters graduate school, because he knows, via a federal subsidy, he will be able to obtain affordable health care coverage.

-A single information technology professional likes his current company, but he thinks a better fit for him would be a smaller company only 5 miles from his home. His current 60-mile commute means he's away from his wife and daughter a great deal. However, he doesn't accept the post at the smaller company, due to concern about it's ability to maintain health care coverage. Under health care reform, he accepts the post, because the small business' health care costs will be more-affordable under the reform bill's provisions.

Economic Analysis: To be sure, the above is not to state that health care insurance is the only factor in a career decision, but the health care reform bill would increase benefits portability -- something the United States is well behind Europe on -- and any time benefits portability increases, it enhances the ability of talent to seek its highest and best use.

Business formation. Innovation. Americans going back to school to increase their skills or enter a field they believe is their calling. Talent seeking its highest and best use. U.S. GDP growth. All of the aforementioned sound like good things from a value-added standpoint, which is good news for investors, for the U.S. economy, and, employees.

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