Healthcare and Entrepreneurs

Could universal healthcare trigger a wave of entrepreneurship?  Jonathan Gruber thinks so.  His argument is based on two elements. The first is apparent commonsense—if a person wasn’t locked to his job in order to keep his employer-provided healthcare he might feel more comfortable taking a leap as an entrepreneur. The second is the work of Alison Wellington, which tried to show that earlier findings by Doug Holtz-Eakin—in which he found “no evidence of job-lock related to employer-provided insurance”—were wrong.

It is unlikely that any sort of modeling will do much to help determine the right answer here. Either way, eliminating the preferential tax treatment for employer-provided coverage—something advocated by Arnold Kling here yesterday—would help entrepreneurs (relatively speaking). Tim Kane of Growthology weighs in on the topic and captures some of the tension felt by those hoping to trigger more entrepreneurship:

I am torn about the upcoming battle over healthcare reform. Whatever the bill pays for, I am likely to distrust its impact on market incentives, but how it pays may turn me into a full-throated Obamaite (Obamacon?  What are they called?). The WaPo has a great article today about Dem infighting over the revenue plan for healthcare. Growthology mantra for the summer: Taxing employer-provided health insurance is not just a way to pay for reform, it is healthcare reform. Every entrepreneur knows this is the key to levelling the playing field. Let’s hope it happens.

There is also the issue of entrepreneurship in the health sector itself after a major healthcare overhaul and the emergence of a potential monopsonist with a stated interest in keeping costs way, way down. This gets far less attention than it deserves.