There is profound disagreement about healthcare reform's overall impact on jobs. One study conducted by the Center for American Progress indicates that four million new jobs will be created by health care reform in the next 10 years. However, a study conducted by the Heritage Foundation predicts the loss of 690,000 jobs. How could two estimates be so different?

In Pictures: 8 Great Companies With Top-Notch Healthcare Benefits

While the net effect on jobs remains uncertain, it is clear that certain professions will do better than others under healthcare reform. Three jobs likely to get a boost are presented below, along with a discussion of likely pitfalls to look out for in each profession. (Focusing on salary may be a mistake. Find out which benefits have the highest long-run payoff, read Job Hunting: Higher Pay Vs. Better Benefits.)

Insurance Agents
Insurance agents may get a boost since approximately 32 million uninsured Americans will be required to buy health insurance starting in 2014. Those who do not possess any form of health insurance will pay a $695 fine (or 2.5% on their income), providing a strong incentive to secure at least a minimum form of coverage.

On the other hand, insurance agents may lose out in some ways. First, new rules require health insurance companies to pay out at least 80% of their premiums (known as a loss ratio or combined ratio) for claims on individual and family insurance plans (and 85% in the employer/large group market). For example, if a company took in $100 million but only paid out $77 million as medical expenses, they would be required to reimburse $3 million to holders. This means that only 20% is left over to fund all other insurance company operating costs, including agent commissions. While agent commission can vary considerably, they generally run in the neighborhood of 10% to 15% of the first year's premiums, and then a reduced commission in the years to follow. With the new restriction, only 5-10% would be left for all other administrative costs including profit margins. Thus it appears likely that agent commissions may shrink as a result of the health reform law.

Second, new insurance exchanges will be set up to facilitate purchasing individual and family health insurance. While details are still murky, it appears that companies will be required to sell certain "minimum benefit" plans through these exchanges. The exchanges are meant to allow greater transparency of coverage, and facilitate consumer comparisons between plans. Thus, it might become easier for individuals to buy insurance without the help of an agent.

Doctors
Certain doctors can look forward to increases in Medicare payments under the health reform law. According to the American Medical Association, family medicine, internal medicine, geriatric and pediatric physicians will be eligible for 10% incentive payments from 2011-2016 if they meet certain requirements. General surgeons operating in "health professional shortage" areas will also get the 10% incentive. In addition, Medicare payments for psychotherapy increased 5%. Under related legislation, certain payments under Medicaid were also increased.

While any increase in payments is likely to be well received, critics of these programs claim that payments remain far too low considering both the cost and the market value of many procedures. Often the amount paid to doctors by private insurance companies is far higher. In a growing trend, the Mayo Clinic branch in Glendale, Arizona stopped accepting Medicare patients as of January 1, 2010. The Mayo Clinic lost $840 million in 2009 on Medicare patients, spokeswoman Lynn Closway told Bloomberg News. Therefore, despite this payment increase, the fact that more Americans will become eligible for Medicare and Medicaid under the health reform law may be bad news for doctors' pocketbooks.

Entrepreneurs/Self-employed
The somewhat unlikely winners in the health reform law may be entrepreneurs and other self-employed persons. Prior to the health reform law, larger group insurance plans provided by employers had a number of advantages over individuals attempting to buy health insurance on their own. Thus, the benefits of obtaining high quality health insurance through one's job could sometimes act as a considerable barrier for those who would consider entrepreneurship or other forms of self-employment.

Since many of the provisions in the health reform law aim towards leveling the playing field, allowing entrepreneurs to buy plans with greater transparency, and (in theory) at better rates through insurance exchanges. Entrepreneurs may be worse off, however, if they would have opted for low-cost "catastrophic" health insurance plans in order to minimize overhead in new ventures. Since the health reform law will require a minimum level of benefits from insurance plans sold through insurance exchanges, these types of plans may no longer be sold. (Don't let these simple errors leave you unprotected. Read 5 Mistakes That Can Ruin Your Life (Insurance).)

The Bottom Line
It is clear that due to a law that will spend $928 billion over the next decade some professions will fare better than others. Since there is so little agreement regarding this bill, you'll have to judge the debate for yourself. The net effect on many jobs will depend on how fine details of the new law are put into action. Things will change, but if you are in the right industry you could get more that just health benefits.

Still feeling uninformed? Catch up on your financial news by reading Water Cooler Finance: Everything Old Is News Again.

Related Articles
  1. Entrepreneurship

    Top 5 Startups that Emerged in Toronto

    Learn how Toronto has built a fertile climate for startups, and identify some of the top companies to emerge from the city's hot startup market.
  2. Mutual Funds & ETFs

    ETF Analysis: Direxion Daily Healthcare Bull 3X

    Learn about the Direxion Daily Healthcare Bull. This is a leveraged ETF that tracks the health care sector, which is a leader in this bull market.
  3. Entrepreneurship

    Top 5 Startups that Emerged in London

    Learn why London's startup scene is so prolific, and identify some of the hottest companies emerging from this scene as of mid-2015.
  4. Active Trading Fundamentals

    The 4 Biggest Private Equity Firms in London

    Discover information about the largest private equity firms that are headquartered in London, ranked by total assets under management.
  5. Retirement

    Retirement Planning for Entrepreneurs and Small Businesses

    If your business has receiveables, here's a smart way to leverage them to build up your retirement fund fast.
  6. Investing

    The 8 Best Business and Finance T.V. Shows

    With so many talking heads to choose from, which is the right show for your business and money matter needs? We review the best shows on now.
  7. Personal Finance

    How To Get That Entry-Level Financial Analyst Job

    Landing a job as a financial analyst takes study, strategy and a lot of hard work. Here's how to hone your competitive edge.
  8. Active Trading Fundamentals

    The Biggest Private Equity Firms in San Francisco

    Learn about some of the larger private equity firms with a presence in San Francisco, including KKR, the Blackstone Group and Warburg Pincus.
  9. Active Trading Fundamentals

    The Companies of Peter Theil's Founders Fund

    Learn about the major public companies that Peter Thiel has invested in and companies that are on the verge of going public at multibillion-dollar valuations.
  10. Active Trading Fundamentals

    The Biggest Private Equity Firms in Los Angeles

    Learn why Los Angeles is a thriving market for private equity, and identify the five largest private equity firms operating in the city.
RELATED TERMS
  1. Section 1231 Property

    A tax term relating to depreciable business property that has ...
  2. Emergency Banking Act Of 1933

    A bill passed during the administration of former U.S. President ...
  3. Venture Capitalist

    An investor who either provides capital to startup ventures or ...
  4. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the ...
  5. Gross Domestic Product - GDP

    The monetary value of all the finished goods and services produced ...
  6. Ceding Commission

    A fee paid by a reinsurance company to the ceding company to ...
RELATED FAQS
  1. What's the average salary of an actuary?

    According to data reported by the U.S. Bureau of Labor Statistics (BLS), the average salary of an actuary—an individual who ... Read Full Answer >>
  2. Where are the Social Security administration headquarters?

    The U.S. Social Security Administration, or SSA, is headquartered in Woodlawn, Maryland, a suburb just outside of Baltimore. ... Read Full Answer >>
  3. What is the Social Security administration responsible for?

    The main responsibility of the U.S. Social Security Administration, or SSA, is overseeing the country's Social Security program. ... Read Full Answer >>
  4. Is the Social Security administration a government corporation?

    The U.S. Social Security Administration (SSA) is a government agency, not a government corporation. President Franklin Roosevelt ... Read Full Answer >>
  5. What role does the agency problem play in the modern Health Care industry?

    Agency problems vary from health care system to health care system, and not all economists agree on the degree and desirability ... Read Full Answer >>
  6. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!