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Comment by cylinder | Hacker News Reader

I am not blaming Obamacare. I have reflected your exact sentiment in my other posts online. This is a result of the disaster that is the US healthcare system as a whole. Obamacare was a patch, but not enough to stop this from happening.

I do advise that people not write-off criticisms of ACA as right-wing hysteria right now; the 2017 increases are really unbelievable in many states (Minnesota: 50%+). Everyone can browse these rates online.

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I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US. Not only does it make it difficult to start a company, it makes it difficult to work for startups and small businesses. Employer-provided health insurance is an incredibly strong bias in favor of large corporations (that have dedicated HR and can negotiate rates and self-insure).

...and grandfathered programs unaffected by the new rules, allowing access to doctors who aren't participating in the new "negotiated" rates.

Its the same for investing - you /cannot/ tax defer more than $5500 a year of your income for retirement unless you have a COMPANY PROVIDED 401k. There is no such thing if you are a employee at a company that doesn't supply one.

Not true, you can put more than that in a SEP IRA.

As I understand it, it doesn't help you as an employee of a small business though unless the business makes the contribution. SEP IRAs are primarily intended for freelancers and small business owners.

Unless I'm mistaken it looks like SEP-IRAs have to be offered by an employer as well: https://en.wikipedia.org/wiki/SEP-IRA

If you're self employed you're your own employer. I've been making SEP contributions for years using my freelance income. I also have a full time job.

If SEP IRAs as mentioned above aren't an option, HSAs might be worth considering - after 65 they aren't restricted to medical expenses. I-bonds might be an interesting component for future retirement as well.

I'd like to see Elizabeth Warren deprecate 401ks and raise the IRA contribution limits accordingly, while legislating that employers can contribute to them directly. Immediately remove employer-tied retirement plans, and you'll see expense ratios of funds plummet when you can have any fiduciary host your account.

Its absolutely silly we still tie retirement accounts and healthcare to employers.

I agree but not sure why you'd hope Elizabeth Warren would do this. It's unlikely to come from the left.

Donald Trump's platform would actually allow individuals to take the same tax deductions on health insurance that companies get: https://www.donaldjtrump.com/positions/healthcare-reform

"Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn't Congress allow individuals the same exemptions?"

John Mackey had a very rational proposal as well: http://www.wsj.com/articles/SB100014240529702042514045743421...

"Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair."

Wow, who knew Trump had positions? Someone on his staff should tell him to talk about them rather than continuously drawing attention to attacks from his opponents that he should not even be mentioning. Well, actually let's not because he would not be a stable president for the US economy. Would be nice to have a president that didn't see business as an enemy and tax cuts as handouts for the wealthy though.

The problem with lowering taxes for the wealth is they invest it. which drives up asset prices. makes them feel good, because the assets values went up but it didn't create anymore actual assets or create anything more productive. Corporations are flush with cash and investing in new technology as fast as they can. Throwing money at the problem won't fix anything.

Another good idea was federalize the insurance laws/regulations. if you could get an insurance licence that was good in all 50 states.

Just start your own business and shelter the money in an i401K, SEP IRA or Simple IRA: https://investor.vanguard.com/what-we-offer/small-business/c...

"For the 2016 tax year, overall employer plus employee contribution limit is 100% of compensation with a maximum of $53,000"

If you're already employed full time and your paychecks go directly to you its only possible if your employer is okay with paying you as a contractor, which of course makes their situation with you more complicated, and also you might have trouble getting health insurance through the company.

I am saying moonlight on the side in addition to the fulltime job and stash that money away.

Not true. If you have self employment income you can do a SEP IRA. That's something like 25% or up to 53k, which ever is less.

Thats right - but if you're employed at a place that doesn't offer a 401k, and not self employed you can't do anything.

You can look for some side work.

If that were true, then Canada would be the startup mecca. Why then is it not?

All of our smart entrepreneurs go to Silicon Valley where the money and other talent is? I live in Toronto and can't count the number of friends I've know who moved to either SF or Seattle. The only reason I didn't move there was because I didn't have a 4yr "advanced degree" to qualify for a T1 visa (despite having a job + lawyer). Most leave right out of university. Considering jobs are $60-70k vs $150-200k I don't blame any of them.

Otherwise I believe it's a pretty good place to start a company. Our income taxes are equivalent to California and I believe our corporate taxes are lower but we have health care and relatively cheap housing downtown thanks to a housing development boom.

We also have a startup founder visa and an easier immigration policy. Access to seed capital and higher-end talent is the only constraint.

But people moving to take jobs aren't people moving to start companies. I lived in Toronto in the late '80s and found it to have a pretty decent startup culture. My wife worked for Alias at the time.

I don't understand why there is such a huge salary difference between Toronto and SF. I'd love to move to Toronto but really don't want to take that huge salary hit.

You should see how much the Canadian government taxes you before you do anything.

It's about even from the personal income tax side in california. Companies don't pay for healthcare so that 'tax' is gone. I don't think there is much of a difference past that.

I've heard before that access to funding is a huge problem.

Right now? Same reason anywhere else outside of SV isn't one. Momentum. The money is in SV, and has absolutely no desire to move anywhere else.

There's a network effect. People want to live in a place where they have plenty of options if their current job doesn't work out. Employers want to have a large pool of local talent to draw from. This is all self-reinforcing and probably the reason why companies start and stay in the SF bay area even though the cost of living is insane.

As long as the VCs don't want to invest in a company they can't drive to in an hour or less, that's going to be a problem.

Critical mass, proximity, overpriced west-coast Canadian real estate market?

By contrast, Berlin seems to be doing fairly well, despite a language barrier (for English speakers). Israel (Tel Aviv) as well.

The specificity of high tech to the SF-SJ region is curious.

> I've been saying for a while that the health care system is the biggest impediment to entrepreneurship in the US.

So why isn't Europe an entrepreneural juggernaut? Tech scene in Europe seems worse than the US IMO.

Maybe because there are other factors than just the one that the US gets very wrong?

Europe is over-taxed and over-regulated and the US is, too. We're killing our golden goose as we speak. It was completely avoidable, but leftism just feels so good.

We should be hanging the people that caused this, but we're too nice and we won't until it all ends up like Venezuela.

Have you read pg's essay "Cities and Ambition"? He explains there why there isn't a Silicon Valley outside of Silicon Valley. Different cities have different cultures, and encourage different things. The cities of Europe are ancient. Their ambitions were set long ago.

That said, there's much more to "entrepreneurship" than tech startups! Opening your own restaurant - not a chain franchise - is entrepreneurship, too. Or a barbershop, or making custom clothing, or running a small theater, or any number of other things. Small business is mostly small, not a stepping stone on the way to being huge.

In those terms, is the US actually doing better than Europe? Do entrepreneurs - not the millionaires, just the people who don't have to answer to anyone but themselves - do better here, or in Europe?

if the left used your argument they would convince so many people on the right.

Let's also not forget that a significant part of this hasn't even kicked in yet, the so-called Cadillac Tax has been kicked down the road, but is potentially enormous. Those who pay the most for their health care plan are going to be heavily taxed to subsidize everyone else. So as much as the current plan rate hikes are unbelievable, it's still going to get much worse before it (maybe) gets better.

How kicked? I remember a big internal uproar when I was at one of the big tech companies about cutting some benefits, and one of the explanations was the cadillac tax.

I think it's 2018. All of the fancy benefits, like infertility, durable medical equipment, etc will probably get axed in most big companies.

A quick google search brought this up, which might be accurate[1]. It suggests that 2020 is when it is supposed to be enacted now. The Wikipedia article [2] seems less concrete about it, other than to say that there's bipartisan support for not implementing it.

[1] http://www.cigna.com/health-care-reform/cadillac-tax

[2] https://en.wikipedia.org/wiki/Cadillac_insurance_plan

I doubt it will ever happen. The reason it was delayed to start with is it's not at all politically palatable.

Maybe so, but someone has to pay for the subsidies. Whether it's this tax or a different one, the middle class is going to have to take on that burden.

Agreed. I expect in a few months we're going to see a serious effort at unpopular, albeit necessary, reform to the ACA.

How about another class takes it on

Our HR wants to be ready. Slashing benefits early is a side bonus I'm sure. :)

You hit the nail on the head. The US insurance program is about 80% of why I wasn't able to run a startup.

At the time, I was 29 years old and spent about as much money on insurance as I spent on food. It was my single biggest expense after rent.

Left-wing criticisms of the ACA are that it should've had a public option (or single payer) - which may get some momentum with ongoing premium hikes.

The right-wing hysteria part is the (false) idea that premiums didn't go up like this pre-Obamacare, as well as the idea that "roll it back" is a tenable solution.

10-20% rate growth was common before the ACA. Now my state is looking at a 74% hike. It is false to claim these kind of hikes were normal before the ACA.

Your state is an outlier.

http://www.latimes.com/business/la-fi-obamacare-premiums-201...

> A new analysis from the Urban Institute found that the average unsubsidized premiums in the Affordable Care Act exchanges, commonly known as Obamacare, are actually 10% lower than the full premiums in the average employer plan nationally in 2016.

http://www.newsweek.com/fact-check-trump-clinton-claim-obama...

> According to the Kaiser Family Foundation the average cost of the second lowest priced silver metal plan, also known as the benchmark plan that is used to set subsidies, will see its price increase 9 percent next year. That's significantly higher than the 2 percent increase for these plans this year, but it's south of the figures provided by Trump.

It's more of a "you touched it; you're responsible" scenario. The insurance market was bad pre-ACA. Then Obama touched it. Now it's his fault. If he had left it alone, everyone could have continued to just point the finger.

Yes, but if often was impossible to get insurance with preconditions, Regardless, ACA sucks. So did pre-ACA insurance.

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