3 ways President Biden's latest executive order affects your money
The executive order tackles jobs, prescription drugs, and health care.
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President Joseph Biden signed an executive order on July 9 that could make it easier to change jobs, buy prescription drugs from abroad, and shop for health insurance. Here are three ways the move could affect your money.
Somewhere between 28% and 47% of private-sector workers are subject to non-compete agreements, which ban workers from working for, or starting a competing business within a certain time period after losing a job, according to the Economic Policy Institute. Biden's order calls for the Federal Trade Commission to ban or limit such agreements.
This could make life easier for you if you're looking for a new job in the same industry. On the other hand, without these agreements, businesses may need to spend more money to hold on to employees, and pass those costs on to consumers.
"You're going to find a lot more people switching jobs, which could make the cost of labor go up or your surgeon go up or your car mechanic go up," said Thomas Patrick, a professor of finance for the College of New Jersey.
Biden also seeks to limit occupational licensing restrictions. Nearly a third of jobs require licenses, and their cost and requirements vary by state. Limiting these restrictions would be a win for job seekers, who would face fewer obstacles to get work, Patrick said.
The executive order would also ask the Food and Drug Administration to work with states and tribes to import prescription drugs from Canada. Prices in the U.S. are 2.6 times higher on average for prescription drugs compared to other countries, according to the Rand Corporation, a think tank.
Prescription drug coverage is a complicated part of an already complicated health insurance system. Insurance companies each have their own list of drugs they cover, and you have to ask your doctor or file a formal appeal to get coverage for drugs that aren't on the list. And it gets way more complicated; check out our guide to prescription drug coverage to get an idea.
Rather than replacing this expensive system, which would take the help of Congress, this part of the order would circumvent it by getting drugs from Canada. Our northern neighbor strictly regulates the price of prescription drugs, so consumers there don't pay as much.
Did we mention how complicated health insurance is? Policygenius asked a nationally representative sample of people the definition of a "co-pay" and less than half got it right (Here’s the rest of our 2020 health insurance literacy survey).
Biden's executive order takes a small step toward addressing this problem. He's asking the Department of Health and Human Services to standardize plan options on the federal health insurance marketplace — in other words, the individual plans available on healthcare.gov — to make it easier to shop. This is good for the 12 million or so people who use marketplace plans, but the vast majority of people are covered by private health insurance plans through their employers.
If you’re shopping for a plan, our health insurance learn center can help you untangle some of the jargon.
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