New Insurance Study Findings Reported from University of Nevada (The Cost of Health Insurance and Entry Into Entrepreneurship): Insurance

2026 APR 06 (NewsRx) -- By a News Reporter-Staff News Editor at Health Policy and Law Daily -- Investigators publish new report on Insurance. According to news reporting out of Reno, Nevada, by NewsRx editors, research stated, “Unavailable or expensive health insurance may hinder the transition of individuals from paid employment to entrepreneurship, a phenomenon called entrepreneurship lock. The literature argues that the guaranteed availability of health insurance introduced by the Affordable Care Act (ACA) in the USA in 2010 could reduce this barrier to entrepreneurship and thereby increase entrepreneurial activity.”

Financial support for this research came from Ewing Marion Kauffman Foundation.

Our news journalists obtained a quote from the research from the University of Nevada, “In this paper, we investigate to what extent entrepreneurship lock exists due to health insurance costs even when the availability of health insurance is given. We use individual-level data from the Current Population Survey (CPS-ASEC) combined with county-level panel data on health insurance costs in local health insurance exchanges (HIX) introduced by the ACA to estimate county-treatment fixed effects regressions. The results indicate that a hike in the premium of the benchmark HIX plan by 1% decreases the entry rate into self-employment by 0.76%. Men react more strongly to local HIX premiums than women. There is a stronger effect on starting incorporated businesses than on starting unincorporated businesses, which suggests that the additional businesses triggered by lower HIX premiums are of relatively high quality. Lower costs of health insu-rance in the non-group market may increase entry into entrepreneurship. In the USA, most employees covered by employer-provided health insurance have to find new health insurance in the private non-group market if they quit their job to become an entrepreneur and do not want to become uninsured. Therefore, health insurance costs can be a barrier to entrepreneurship. The Affordable Care Act (ACA) of 2010 made health insurance available in Health Insurance Exchanges (HIX) regardless of pre-existing health conditions. Therefore, it was presumed that the ACA might make the transition to entrepreneurship easier. However, health insurance premiums in the HIX are often expensive. We investigate how much the cost of health insurance when leaving paid employment matters for the decision to become an entrepreneur.”

According to the news editors, the research concluded: “Our estimations suggest that decreasing the premium of the benchmark HIX plan by $50 per month (the average is about $420) would increase the annual entry rate into self-employment by about 9%.”

This research has been peer-reviewed.

For more information on this research see: The Cost of Health Insurance and Entry Into Entrepreneurship. Small Business Economics, 2025;64(2):383-405. Small Business Economics can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer - www.springer.com; Small Business Economics - http://www.springerlink.com/content/0921-898x/)

Our news journalists report that additional information may be obtained by contacting Frank M. Fossen, University of Nevada, 1664 N Virginia St, Reno, NV 89557, United States. Additional authors for this research include Sankar Mukhopadhyay, Peter Toth and Mobarak Hossain.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s11187-024-00927-x. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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