Employee Mobility, Options Would Increase Under Health Care Reform Bill

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 in which every American, including those of modest means, 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 marketing 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 can receive care coverage, regardless of what plan he chooses. The law will require it.
• A 30-something woman wants to head back to graduate school for an advanced engineering degree, but she doesn't, due to concerns about obtaining affordable health care insurance outside of her current employer. Under health care reform, she enters graduate school, because she knows, via a federal subsidy, she 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 five miles from his home. His current 45-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: 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.

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Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.