Self-Employment and Health Insurance Coverage in the Post-ACA Era: Evidence from the American Community Survey

Abstract

Does self-employment reduce health insurance coverage compared to traditional wage employment in the post-Affordable Care Act era? Using data on 1.3 million workers from the 2022 American Community Survey, I estimate that self-employed workers are 6.1 percentage points less likely to have any health insurance coverage compared to observationally similar wage workers—a relative gap of 6.6%. This coverage deficit operates through dramatically lower employer-sponsored insurance rates (27.2 pp, or 36%), partially offset by higher direct-purchase coverage (+18.3 pp, which includes both ACA Marketplace and off-exchange individual plans) and Medicaid enrollment (+3.2 pp). The coverage gap is substantially smaller in Medicaid expansion states (6.4 pp vs. 10.1 pp). The gap is smallest for lowest-income workers (1.6 pp) who qualify for Medicaid and highest-income workers (4.6 pp) who can afford direct-purchase coverage, while middle-income workers face the largest penalty (9.5 pp). These patterns suggest that Medicaid expansion has been particularly effective in protecting low-income self-employed workers. However, a persistent coverage penalty remains for middle-income workers, indicating that the ACA's reforms have not fully equalized access.