Omar is an Uber driver living and working in Boston. He drives a Prius and is pretty great at weaving in and out of Boston’s infamous traffic.
Omar, who asked that his real name not to be disclosed, for privacy reasons, says of the job, “I do it on the side. How much ever time I can put in,” adding, “I’m getting ready to go back and start grad school. ... It's not something I want to do full time. And I would absolutely not have done it without health insurance.”
But, access to health insurance, for most gig workers, might change very soon.
If you’re an independent worker, none of the gig economy companies, including Uber, will offer you health insurance. So, if you want it, that means — for most people — going online and signing up for coverage under the Affordable Care Act.
The consulting firm McKinsey & Company has estimated that somewhere between 55 million and 65 million Americans work in the gig economy, but no one knows for sure. The last measurement was back in 2007, and the Bureau of Labor Statistics — the government organization that collects this kind of data — will start surveying again later this year.
Something we do know? Before the ACA, having a nontraditional job often meant you didn’t have access to health insurance.
“It was very difficult to get health insurance if you were a freelancer, a musician, a consultant, before the ACA,” says Melinda Buntin. She’s chair at the Vanderbilt University School of Medicine’s Department of Health Policy.
Back in the early 2000s, lots of people felt trapped by jobs they didn’t like — sticking with them just for the health insurance. Economists even have a term for it: "job lock."
“At that time, people started to worry that our economy needed more flexibility in order to respond to the demands of the tech industry and rising gig economy,” explains Buntin. “It could be brought to a halt if people got worried that they couldn’t get health insurance and stuck to their more traditional jobs.”
When the ACA was signed into law, tech companies got an opportunity. Now, no one had to stay with a traditional job just to keep their health insurance. And, in the past seven years, we’ve seen an explosion in the gig economy.
Avra Siegel is the former director of public policy for Care.com, a service that pairs families with domestic workers. (She also worked at the National Economic Council under President Barack Obama.)
Recently, Care.com asked gig workers what benefit they needed most.
“It was very clear that the number one employment benefit that gig economy workers were looking for and needed most was health care,” says Siegel. “That always came out on top.”
But the repeal of the ACA might mean trouble for the gig economy.
If gig economy companies offer their own insurance like other, more traditional businesses, it’ll be expensive. They’ll have to raise the costs of their services or cut pay. Or, worse yet: They risk having a fleet of uninsured workers.
“In that sense, the companies have a vested interest in the ACA,” says Siegel. “And it's highly interesting because what you're finding is a set of unusual bedfellows for mandates on business.”
But the tech companies have been tight-lipped about the potential repeal. Innovation Hub reached out to a bunch of them, including Lyft, Uber and Taskrabbit — and except for Care.com — they wouldn’t talk.
The Republicans’ replacement for the ACA could change things, drastically, for gig economy workers. People in their 50s and 60s are likely to see costs skyrocket. Same for those who rely on Medicaid, or young people who get more than $170 in health care subsidies each month.
But if you don’t fall into any of those categories, and you make less than $75,000, odds are, you’ll save money.
Siegel is between jobs right now but doesn’t have to worry about where her health care will come from.
“I am lucky enough to be on my husband's health care plan,” she explains. “He's a federal employee and has excellent health care, and my family is on his plan.”
Omar, the Uber driver, isn’t so lucky.
“For now, I pay a premium, and I have Obamacare,” he says.
But there’s health insurance for students, which he’ll have access to when he enrolls in graduate school. Until then, he’ll keep driving for Uber and buying insurance through the ACA, while he still can.
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