Stuck in Your Job Because You Need the Health Benefits? Youâ€™re Not Alone.
In the United States, the majority of people get their health insurance through their job. Many have an immediate need for that coverage, either because they or someone in their families has a health condition that requires ongoing medical care. These are the millions of people for whom losing their employer-based coverage would have dire financial and health consequences. And for many of them, it means staying in a job they would rather leave to keep those health benefits. This phenomenon is referred to as 'job lock.'
Economist Scott Adams has found evidence of pretty wide-spread job lock. His research has found that:
- among men aged 25 to 55 with spouses, there is an approximate 22 percent to 32 percent reduction in job mobility stemming from health insurance coverage;
- there is slightly more job lock among married women; and
- job lock has increased since 1988.
Overall, Adams' results are consistent with earlier studies that found job mobility was reduced by 26 percent to 31 percent due to the lack of portability of employer-provided health coverage.
That means millions of people are not switching to more satisfying, perhaps even more lucrative jobs, because they need the health benefits being offered by their current employer. And they are right to be afraid. This is what can happen when they take the chance:
"Michael Courtney was 41 years old when he was diagnosed with a rare form of lymphoma. It started on his tongue, but spread quickly. He has had radiation and chemotherapy. Treatment will continue indefinitely. So will his bills.
"An auto mechanic, Courtney was hesitant about changing jobs because he didn't want to lose his health insurance. But a new employer promised immediate benefits so he took the job. He was even able to stay with the same insurance company that he had at his old job. But a month into the new job, he found that the new policy wouldn't cover his cancer for three months. His disease was a pre-existing condition. Already strapped with medical bills, he postponed treatment."
Some would-be entrepreneurs are also being stifled by the need to keep their employer-based coverage, which can only hurt the economy. As economist Jonathan Gruber notes: