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Job Lock Overblown; ObamaCare Is No Fix

Anyone following the debates over ObamaCare has been hearing a lot about "job lock" lately.

"The Affordable Care Act will enable more than 2 million workers to escape 'job lock' — the situation where workers remain tied to employers for access to health insurance benefits," said House Minority Leader Nancy Pelosi, D-Calif., to cite one example.

All this job-lock talk was sparked to defend ObamaCare after the Congressional Budget Office reported the work disincentives it creates will lead to the loss of the equivalent of 2.5 million full-time jobs.

But it turns out that Democrats' claim that millions can't escape the jobs they have solely because of health insurance is debatable. And to the extent that job lock is a problem, it's far from clear that ObamaCare will solve it.

The U.S. job market is fluid, with workers switching jobs, even careers, more often than ever. The average baby boomer holds more than 11 jobs from age 18 to 46, according to a Bureau of Labor Statistics study. Of those who started new ones in their early 40s, a third had switched jobs within a year.

Jobs Unlocked

And for men at least, job switching has increased over the past five decades. Back in 1973, the median time at a job was 11.5 years for men ages 45-54. Today it's 8.5 years. And while 58% of men in their late 40s had been at the same job more than 10 years in 1983, fewer than 45% could make such a claim by 2012.

At the same time, the number of self-employed climbed sharply years before the last recession, belying the notion of workers hopelessly locked into their jobs because of health insurance.

In 2008, there were nearly 16 million self-employed people in the country, a 51% increase from 1995, according to the Small Business Administration . CareerBuilder says self-employment shot up between 2001 and 2006, adding close to 1.8 million jobs.

After dropping in the wake of the 2007-09 recession, self-employment rose in '12, the SBA says.

Still, many researchers have found evidence of job lock in specific situations. One study found that men with employer coverage were 23% less likely to leave a job than those who also had access to coverage via a spouse.

But not every study has found a connection. A 1993 analysis by Douglas Holtz-Eakin, who later headed the Congressional Budget Office and now heads the American Action Forum, found little evidence of job lock in the U.S. due to health insurance.

And when the Government Accountability Office looked at a decade's worth of research, it was unable to determine the extent of the job-lock problem or what impact it might have on the overall labor market.

Plus, the GAO noted that the federal government has already taken several steps to help mitigate insurance-related job lock. The 1985 Cobra law, for example, lets workers stay on their company health plan for more than a year after leaving a job.

And in 1996, President Clinton signed the Health Insurance Portability Act, which blocked companies from imposing coverage limits on workers who had insurance at their previous job.

To the extent that job lock still is a problem, that doesn't mean a sweeping program like Obama-Care was needed to address it.

In fact, in a 1993 paper, Jonathan Gruber — one of the architects of ObamaCare — concluded that "a sizable share of job lock arises from short-run concerns over portability rather than from long-run problems," and that reforms focused on "limited portability" would likely "remove a sizable share of job lock.

It's also far from clear that ObamaCare will eliminate the problem, since many would-be entrepreneurs would still face difficult financial choices, even if they're now guaranteed coverage in the individual market.

For example, employees pay only about one-fifth of their employer-provided premium costs, on average, or about $83 a month. Employers pick up the rest.

But those who strike out on their own and make more than $46,000 a year would have to pay the entire premium at an ObamaCare exchange. Even for the cheapest bronze plan, the average is almost 50 a month.

Plus, job quitters would likely face far higher deductibles under ObamaCare than they typically get via employers.

The average bronze plan deductible tops $5,000, according to HealthPocket. That's more than five times the average deductible for health plans offered by large companies, and nearly three times the average deductible for small-business staff.

In addition, most ObamaCare plans have "narrow" or "ultra narrow" doctor networks vs. those offered via workplace coverage. Blue Shield of California's ObamaCare plan includes just 60% of the doctors and 75% of the hospitals in its group plan.