Patrice Onwuka is director of the Center for Economic Opportunity at Independent Women and co-host of the WMAL-DC show “O’Connor & Company.”
Health care — and the affordability of insurance — was front and center in the shutdown debate. But evenas the government reopens, both parties will still confront the challenge of expanding affordable health care coverage to more Americans. For innovative, bipartisan solutions, federal policymakers can look to the states.
Private employer-provided health care is the leading source of health insurance for the U.S. population (covering 53.7 percent) and is predominant among working-age adults (62.9 percent). Despite public efforts and the private market, 27 million Americans — 8.2 percent of the population — were uninsured in 2024, with working-age adults constituting the largest share. Among the uninsured is a growing segment of the American workforce for whom employer-based benefits are not an option: freelancers.
Self-employment and freelancing enjoy a long tradition in the United States, reflecting the nation’s entrepreneurial spirit. From seasoned professionals to Gen Z influencers to gig workers, an estimated 73 million people freelanced in 2025. Unlike traditional employees, independent contractors set their own schedules, work from anywhere and choose their clients. Flexibility is their motivator.
Women are particularly attracted to independent contracting because they can balance caregiving for children and aging parents, or managing health conditions, with gainful work. More than 80 percent of independent contractors prefer their work arrangement to traditional W-2 employment, according to government data.
The great majority of independent workers are earning supplemental (not primary) income. Many of them have access to benefits, such as health care, through a spouse’s coverage or their W-2 jobs. Still, 29 million self-employed workers who also had traditional jobs in 2019 said they lacked health insurance through their employer.
Access to quality preventive, emergency, curative and rehabilitative care provides individuals with a sense of security to carry on their day-to-day lives and peace of mind in a crisis. Even for traditional employees, the prospect of losing access to uninterrupted care locks them to an employer and, according to one study, discourages 20 percent of would-be entrepreneurs from launching a business.
Public policymakers on the state level have sought varied solutions to expand benefit options to independent workers. One misguided approach has been to reclassify independent contractors as employees of their clients, to expand their access to mandated workplace benefits. When that route is taken, freelancers lose their ability to work independently around their schedules and priorities, which negates the reason they prefer to be independent contractors and, in some cases, disregards the unique circumstances that make traditional employment impossible for them. Flexible opportunities that keep groups such as mothers and older Americans attached to the labor force disappear.
California adopted more stringent standards for independent contracting to woeful results. After the 2019 passage of Assembly Bill 5, which tightened restrictions on company use of freelancers, self-employment fell by 10.5 percent, and overall employment in affected occupations fell by 4.4 percent, according to research by the Mercatus Center. Businesses were naively expected to eat the estimated 20 to 30 percent increase in labor costs. Instead, they eliminated their freelance workforce. Vox Media, for example, hailed the labor law’s passage before cutting about 200 freelance writers.
Women were marginalized and watched their livelihoods destroyed, and workers in hundreds of occupations, from truck drivers to tutors, were roiled. Jessica Tucker of Loma Linda, California, once earned $60 an hour as a freelance transcriber, a job that provided extra grocery, clothing and spending money. “AB5 took this away completely, and my family has been struggling to put food on the table ever since,” she told Independent Women.
An alternative approach — one that respects individual liberty without imposing new financial burdens on businesses or taxpayers — is gaining steam in both red and blue states. The strategy: untether benefits such as health care, disability and retirement from one employer or job by embracing portable benefits.
Portable benefit plans travel with workers and allow independent contractors to access a variety of benefits without losing their independent status. Organizations, companies or individuals can pay contributions into individual benefits accounts, which can be administered by states or third-party companies.
The state’s role is to knock down the legal and regulatory barriers to portable benefits. At present, state (and federal) law prohibits companies from offering benefits to independent contractors. Policymakers can create safe harbors in the law for entities to contribute to portable benefit plans without signaling an employer-employee relationship, an outcome neither independent workers nor their clients desire. The idea of portable benefits is widely popular among self-employed workers, who recognize its game-changing possibilities.
In 2023, Utah pioneered portable benefits in the U.S. by establishing a framework for government and private entities to voluntarily offer flexible benefits to independent contractors. This year, Alabama, Tennessee and Wisconsin passed similar laws (although Wisconsin’s was subsequently vetoed by the governor). A successful pilot program in Pennsylvania with delivery company DoorDash, in which two-thirds of participants gained new access to benefits, inspired programs in Georgia and Maryland. Notably, 82 percent of Pennsylvania program participants preferred their balance of flexibility and portable benefits savings to the alternative of more generous benefits but less flexibility.
Hopefully, more states will pursue portable benefits legislation for their self-employed workforce or other pilot programs in 2026 and beyond. Meanwhile, U.S. House and Senate committees are considering portable benefits bills that can align federal law with state efforts.
Lawmakers should lean into the portable program to unlock health care and other benefits the growing freelancer community desires without curbing flexibility and freedom.
This is a solution that meets the moment. We should seize it.
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