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Health care reform will let you quit your job

Brittany Winter works two jobs -- one in public relations and one at a home for people with disabilities. She much prefers the job in PR, but it doesn't offer health insurance like her other job does.

"If I had better health insurance options," says the 25-year-old New Yorker, "I would consider leaving my job at the home for more hours at the PR job, which I love."

Winter may get her wish thanks to the Affordable Care Act (ACA). Under the new law, individuals looking to buy health insurance can enroll in a variety of plans offered through state-based exchanges, also called health insurance marketplaces. The exchanges open Oct. 1 and coverage would begin in January.

If Winter were to quit one job because she could get a health plan elsewhere, she would not be alone.

quit your job due to health care reformNo more health insurance handcuffs

Indeed, a study done by three college economics professors predicts as many as 900,000 Americans could choose to stop working thanks to the Affordable Care Act.

One of the professors, Tal Gross, at Columbia University's Mailman School of Public Health, says no doubt some people work solely for the health insurance.

"If they can find another way to get affordable health insurance, they can leave the workforce," he says.

Lisa Zamosky, a consumer health care columnist for The Los Angeles Times and a health reform expert for WebMD, agrees: "People feel bound to jobs because they need health insurance. It makes perfect sense that people are sticking in jobs for that reason.

"It also makes perfect sense that if they're not happy in their work, if they have guaranteed access to health insurance outside of work, they would at least consider their options," she says. And thanks to the Affordable Care Act, one of those options could be quitting a job and buying insurance on their own.

Under the ACA, insurers can't deny coverage because of pre-existing conditions or drop you because you have health issues. Previously, the only way many people with health issues could get health insurance was through an employer's group plan.

While in good health, Winter says she can't afford not to have health insurance, if only to help pay for regular checkups and preventive care. She recently had surgery for a torn meniscus and knows how costly that would have been without health insurance.

Qualifying for health insurance subsidies

2013 poverty guidelines for the 48 contiguous states and the District of Columbia

Persons in family/household

Poverty guideline
For families/households with more than 8 persons, add $4,020 for each additional person.
1 $11,490
2 15,510
3 19,530
4 23,550
5 27,570
6 31,590
7 35,610
8 39,630
Source: U.S. Department of Health & Human Services

Jonathan Pope of Cambridge Consulting in Troy, Mich., can see a situation where some spouses may quit a job rather than earn just enough to make the family ineligible for federal premium subsidies. Under the ACA, people who buy insurance through an exchange may be eligible for subsidies for their health insurance premiums and cost-sharing if their income is less than 400 percent of the federal poverty level (see chart).

"If I make $70,000 and my wife makes $20,000, and we have a couple of kids at home, she might as well stay home," he says. By the time the family pays for child care, it could make more sense for mom to quit and qualify for the subsidies than to work, he says.

Pope says that under the ACA some people might refuse raises for the same reason -- the extra salary would bump them from eligibility for subsidies for health insurance premiums.

Gross says the numbers that he and his colleagues came up with are similar to what the Congressional Budget Office projected when Congress was debating health care reform.

No one can say for sure how many people are working simply to be eligible for health insurance and how many will actually quit, he says.

Tennessee in reverse

The professors based their prediction on employment records in Tennessee when the reverse happened in 2005 -- 170,000 residents lost coverage when the state ended TennCare, an expanded Medicaid program. The program had covered uninsured and uninsurable adults regardless of age, income or family status. About half of those who lost their government coverage got jobs and insurance through their employers.

Those who lost coverage were mostly single, childless adults with incomes slightly higher than the federal poverty line, Gross says. "That population is similar to uninsured Americans who might gain coverage under the ACA," he says. They expect the reverse to happen at a similar rate.

Zamosky says the people who quit are likely to include not only those in low-paying jobs but also older people who are waiting to retire until they are eligible for Medicare.

The other authors of the study were Craig Garthwaite of Northwestern University's Kellogg School of Management, and Matthew J. Notowidigdo of the University of Chicago Booth School of Business. The paper was distributed online by the National Bureau of Economic Research.

More from Beth Orenstein here

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