Supreme Court decision to uphold healthcare tax credits a boon for entrepreneurship

We’re pleased the U.S. Supreme Court ruled today to uphold the Affordable Care Act’s provision that allows consumers in states with federally-run health insurance marketplaces to receive federal tax credits to help offset the cost of insurance.

The Supreme Court’s decision protects the millions of small business owners, employees and self-employed freelance entrepreneurs from losing the valuable health insurance they have secured in the past 18 months. Moreover, eliminating the credits would have led to a return of “job lock,” which shackled many would-be entrepreneurs to jobs working for others rather than starting their own businesses. Employment and access to affordable health insurance historically have been tightly linked. That linkage pressures individuals to seek out and remain in jobs that provide affordable health insurance, even if they would otherwise choose to start their own business or pursue a more attractive job opportunity with a growing small business.

If the Supreme Court had eliminated these tax credits in states with federally-facilitated marketplaces, an estimated 9.6 million people who bought insurance through would have lost their subsidies, according to the RAND Corporation. What’s more, the Robert Wood Johnson Foundation found 1.5 million people will launch their own business and become self-employed because of provisions in the Affordable Care Act that will make purchasing insurance on the open market more accessible. The opportunity for these millions of people to strike out on their own could have been eliminated if the Court had removed the subsidies from federally-run marketplaces.

The health insurance marketplaces are the most important component of the Affordable Care Act for entrepreneurs, and it’s critical they are kept as robust as possible. We’re glad the Supreme Court has upheld this provision that is crucial to the success of the health insurance marketplaces and to our nation’s entrepreneurs.