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Nearly five years after its inception, the Affordable Care Act (ACA) remains controversial. The U.S. Supreme Court is currently considering yet another legal challenge, and Republicans in Congress have not abandoned efforts to nullify it completely.
For U.S. businesses, the Affordable Care Act presents a number of compliance challenges, from new tax responsibilities to new reporting obligations. For example, starting in 2015, employers with more than 100 full time employees must offer health coverage to at least 70% of their employees (95% in 2016) and in 2016, the threshold drops to 50 full time employees. Because of these challenges, many critics of the law maintained that Obamacare would be a “jobs killer.” New statistics, however, suggest that it is spurring job creation, particularly for start-ups and small businesses.
As detailed in a recent report from PricewaterhouseCoopers, more than 90 new health-care companies have launched since the Affordable Care Act became law. These new companies also employ as many as 6,200 workers. Overall, the spike in entrepreneurial activity may be unprecedented for the industry, according to experts.
“The Affordable Care Act— by bringing millions more paying customers into the market, promoting transparency, loosening technology regulations and driving changes in how care is delivered and paid for— opens the gates for savvy investors and start-up firms to enter the rapidly expanding $2.9 trillion industry,” the report states.
The start-up boom capitalizes on the massive scale of the Affordable Care Act and the resulting shake-up of the health care industry. The law impacts consumers, hospitals, employers, doctors, and insurers, many of which have been forced to significantly change their practices in the wake of Obamacare. Many newly created companies help these entities address new obligations and opportunities, while others take advantage of the new “wellness” trend generated by Obamacare.
Of the more than 90 new healthcare ventures tied to the Affordable Care Act, nearly one-third involve “telehealth,” which refers to the process of connecting patients and clinicians via technology.
For instance, MediSafe offers a cloud-synced mobile medication management system that helps ensure patients take their medications as prescribed. Other hot markets include consumer education and process improvement.
Some of the Affordable Care Act-related jobs are being created at Vericred, an early-stage digital health company headquartered in New Jersey. Vericred recently launched PlanCompass, an online resource that helps businesses find the right health plan by considering all three key factors that go into that decision: cost, benefits and provider network (the doctors and facilities that are “in-network” for each plan). One way to control costs is to seek a health plan with a “narrow” provider network. However, shifting employees to a narrow network can disrupt their relationships with their trusted providers or require them to pay more to stay with those doctors. PlanCompass anonymously surveys a company’s employees for the doctors they use or want to use, and compares those doctors to each plan’s provider network, displaying match metrics right next to the costs and benefits of all available plans. With PlanCompass, Vericred is responding to the need for transparency in the health plan selection process, while also offering businesses a way to engage their employees in this process. The Obamacare “employer mandate” is requiring more companies to offer insurance; PlanCompass is helping them choose more wisely.
As PWC also notes, innovation in the healthcare industry is not limited to start-ups. Several well-known technology companies, including Apple and Samsung, have also entered the sector with the introduction of mobile apps, data analytics, and medical devices.
Of course, the expanding healthcare market is also creating new investment opportunities. Several new venture capital funds have emerged, including a $250 million VC fund created by the University of California’s Board of Regents that will support work conducted on its campuses.
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Is The Affordable Care Act a Jobs Creator?
Author: Dan Brecher
Nearly five years after its inception, the Affordable Care Act (ACA) remains controversial. The U.S. Supreme Court is currently considering yet another legal challenge, and Republicans in Congress have not abandoned efforts to nullify it completely.
For U.S. businesses, the Affordable Care Act presents a number of compliance challenges, from new tax responsibilities to new reporting obligations. For example, starting in 2015, employers with more than 100 full time employees must offer health coverage to at least 70% of their employees (95% in 2016) and in 2016, the threshold drops to 50 full time employees. Because of these challenges, many critics of the law maintained that Obamacare would be a “jobs killer.” New statistics, however, suggest that it is spurring job creation, particularly for start-ups and small businesses.
As detailed in a recent report from PricewaterhouseCoopers, more than 90 new health-care companies have launched since the Affordable Care Act became law. These new companies also employ as many as 6,200 workers. Overall, the spike in entrepreneurial activity may be unprecedented for the industry, according to experts.
“The Affordable Care Act— by bringing millions more paying customers into the market, promoting transparency, loosening technology regulations and driving changes in how care is delivered and paid for— opens the gates for savvy investors and start-up firms to enter the rapidly expanding $2.9 trillion industry,” the report states.
The start-up boom capitalizes on the massive scale of the Affordable Care Act and the resulting shake-up of the health care industry. The law impacts consumers, hospitals, employers, doctors, and insurers, many of which have been forced to significantly change their practices in the wake of Obamacare. Many newly created companies help these entities address new obligations and opportunities, while others take advantage of the new “wellness” trend generated by Obamacare.
Of the more than 90 new healthcare ventures tied to the Affordable Care Act, nearly one-third involve “telehealth,” which refers to the process of connecting patients and clinicians via technology.
For instance, MediSafe offers a cloud-synced mobile medication management system that helps ensure patients take their medications as prescribed. Other hot markets include consumer education and process improvement.
Some of the Affordable Care Act-related jobs are being created at Vericred, an early-stage digital health company headquartered in New Jersey. Vericred recently launched PlanCompass, an online resource that helps businesses find the right health plan by considering all three key factors that go into that decision: cost, benefits and provider network (the doctors and facilities that are “in-network” for each plan). One way to control costs is to seek a health plan with a “narrow” provider network. However, shifting employees to a narrow network can disrupt their relationships with their trusted providers or require them to pay more to stay with those doctors. PlanCompass anonymously surveys a company’s employees for the doctors they use or want to use, and compares those doctors to each plan’s provider network, displaying match metrics right next to the costs and benefits of all available plans. With PlanCompass, Vericred is responding to the need for transparency in the health plan selection process, while also offering businesses a way to engage their employees in this process. The Obamacare “employer mandate” is requiring more companies to offer insurance; PlanCompass is helping them choose more wisely.
As PWC also notes, innovation in the healthcare industry is not limited to start-ups. Several well-known technology companies, including Apple and Samsung, have also entered the sector with the introduction of mobile apps, data analytics, and medical devices.
Of course, the expanding healthcare market is also creating new investment opportunities. Several new venture capital funds have emerged, including a $250 million VC fund created by the University of California’s Board of Regents that will support work conducted on its campuses.