Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)
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Should I choose pursue an art as my vocation or start a company I'd have to be willing to endure a lag in my insurance until whatever I was pursuing became successful enough that I was eligible to be covered by a trade group or had enough revenue to buy health insurance.
Guaranteed, affordable health coverage not tied to an employer or a spouse would remove a incredible burden from my life.
I still think we should go all the way to single-payer. Other countries have had such success with this model that it's becoming very difficult to argue that it's inherently flawed (rather than the other way around). If the US health industry had to compete directly with any of these systems, it would go out of business tomorrow, since they offer similar care (in terms of outcome rates) at half the price per person. That doesn't even include the effects on entrepreneurship and employment!
While the ACA did little to fix the "US health care costs twice as much and doesn't deliver better outcomes" problem, it does have a good shot at fixing the preexisting condition and individual insurance debacles.
When you have eliminated the implausible, whatever remains, however distasteful, must be endorsed.
The Nixon proposal is an interesting one in retrospect. In some ways it's "left" of PPACA, despite at the time being opposed by Democrats, who preferred a real public plan and criticized Nixon's as a sellout to insurance companies. Although it wasn't single-payer, one of Nixon's proposed compromises would've actually included a public plan as an opt-in possibility (but not the default), reminiscent of the "public option" that more liberal Democrats unsuccessfully tried to include in PPACA.
[1] http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/c...
The British NHS discovered that by not feeding hospitalized patients they could realize tremendous savings in food, shortened length of hospital stay, followup costs, etc.
> half the price per person
Health care spending will dramatically increase under Obamacare. Americans spend a lot on health care as a lifestyle choice. Obamacare is nothing more than an attempt to recreate the housing bubble using health care.
Last decade they bought votes with easy mortgages. After all, even an idiot could see that home ownership was a sound investment. They won two or three rounds of elections with mortgage policy.
This decade it is health care for all! Even an idiot can see that health care for everyone is a sound investment. Just look at these scary charts of runaway growth of medical costs. And the votes roll in.
In reality, most health care consists of vaccines, blood pressure pills, diabetes pills, and the occassional antibiotics. That gives most of the benefits and costs almost nothing.
Most of the costs come from ludicrous end-of-life procedures on old people, most of the rest comes from ludicrous $500k courses of treatments for this like multiple sclerosis and stage 29 recurrent cancer. These are lifestyle choices for well-off people who would rather pay a doctor than leave an inheritance.
Trying to extend this lifestyle to every waitress will destroy the economy. It's no different than last decade's plan to put every hairdresser in a $700k mansion.
[1] About 80% of Americans who died in 1997 were covered by Medicare at the time of death: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1282187/
Then people have an incentive to save money but death panels aren't needed.
Of course this is assuming the heroics rarely work.
That's a lie. Try checking your facts next time:
http://fullfact.org/factchecks/nhs_malnutrition_death-28806
Oh, and by the way, the NHS costs us less than US public healthcare costs. Meanwhile, I can get zero deduction, all additions, money for any nights spent in an NHS hospital, private health insurance for $150 a month. How much does yours cost?
So instead of a trained nurse feeding helpless patients, a gormless food deliverer drops a tray off at the patient and leaves. On paper they are still being fed, but in reality patients were starving during the trickiest few hours of recovery. But look at the costs drop!
Similar cost cutting was done for the building caretakers and similar staff. On paper everything is the same just more efficient, but in reality the floors are not getting cleaned, nobody is bringing round tea for the surgeon in the middle of a 12 hour procedure. But look at the costs go down! Look at the readmission rate drop!
I know that they had some problems with some NHS trusts as they went more "efficient private sector", mainly with cleanliness, but this was not pervasive throughout the NHS and suggesting it was commonplace is a flat out lie.
And you never got around to answering my question: is your private insurance cost competitive with UK private insurance?
When looking at whole system costs and value delivery, it's really difficult to conclude that the American healthcare system is anywhere near as efficient as other national universal health care systems.
I have nothing against defense contractors, but I do hate ones that have hypocritical small government, conservative political views. Please feel free to put your money where your mouth is and go work in a free market industry. The taxpayers pay your company, and therefore your salary and health insurance.
I merely pointed out that nationwide programs tend to go horribly wrong. Obamacare in particular failed before it was introduced since American health care is already cheap, and any good ideas it might have incorporated were destroyed by its secret process of creation and lack of feedback.
Incidentally, defense workers are ideally positioned as experts on national health care schemes. We have seen exactly how large one-size-fits-all programs almost always destroy themselves.
http://www.economist.com/blogs/democracyinamerica/2013/07/hi...
Regarding "one-size fits all programs destroying themselves", please explain to me how Obamacare is a one size fits all scheme? It's a conservative policy, designed by the Heritage Foundation think-tank on K Street in DC. (I have a buddy who works at the Heritage Foundation. They all loved Obamacare when Romney was implementing it, and were disappointed that it was only for a single state at the time. Suddenly when President Blackenstein was implementing it, it became evil and socialist.
Frankly, Obamacare isn't the best solution. I would have much preferred a national, single payer system coupled with private providers, like the system in Canada. You know, the one that has vastly higher approval ratings among its patients than the one in the US. But no, the Republicans scared the old people into thinking they would lose their free, socialist medical care if people under 65 got in on the action, so we got stuck with insurance subsidies.
Yes, dirt cheap. As in we could abolish all payment plans and life expectancy would barely budge. Vaccines and generic antibiotics give you the lion's share of what is possible. Blood pressure and diabetes control gives you most of the rest. If you want to get extravagent, add trivial insurance for broken bones, treatable cancer, and the like.
Obamacare is one size fits all because it tries to give everyone the same treatments. There is simply no way to give $400/month anxiety pills and $100k preventative cardic caths to every dirt farmer in Mississippi. Either the poor will get a heavily rationed version of Medicaid or the budgets will explode.
I think the Massachusetts program is a pretty good idea. I have even considered moving there to get on the rolls. If it actually works in the long run, other states would naturally have adopted similar programs. The only reason to try a single national program is to pander to voters.
One of the big problems in American health care is price manipulation. Obama could have become the first black Republican president by proposing that no Medicare provider may render services to anyone else except according to a uniform fee schedule. (If you think a Latino single mother is pissed off about a $300 aspirin, try talking to a country club Republican.)
I like that idea. It would have never, ever made it past the medical provider lobby.
Did you see the Time magazine article "The Bitter Pill"? Fascinating, and the article actually provoked the CMS agency in the Federal Gov't to release their data on the "chargemaster" prices at various hospitals vs. the negotiated Medicare/Medicaid price (which is itself negotiated to ensure it covers a hospitals labor/materials for any given procedure).
I pay ~$430/mo (early 30s, single) for a high-deductible plan with low co-pays from a major carrier with no co-insurance. Do I wish my costs were less? Yes. Is it better than having to be someone's employee? Hells yes. Providing this to the entire country isn't the ideal solution for everyone, but it's a big step in the right direction.
That said, we're in an interesting part of the law's implementation. If you live in one of the 26-33(?) states who have currently declined to operate all or part of their own exchange (exchanges in these cases will be operated by the federal government) your state also lost some of the federal funding that was intended for use in spreading awareness and helping people to "navigate" the sign-up and purchasing process of the exchange. The worry thereafter is that if not enough people enroll through the exchanges they may not have enough leverage to keep costs down.
Add to this the idea that some state governments are actively dragging their feet with the implementation of anything exchange related (enrollment starts in October and my state has next to no information out there on the process yet) and we get the potential for messiness.
In my case, I still dream of single payer.
Disclaimer: Typing off the cuff, not a health insurance administrator, etc...
*For those interested in more about how the exchanges are progressing, I find the website of the Kaiser Family Foundation to be excellent:
http://kff.org/health-reform/issue-brief/establishing-health...
http://kff.org/health-reform/state-indicator/health-insuranc...
I've read in /r/paleo that some have managed to improve auto-immune conditions through a modified paleo diet: http://paleospirit.com/2013/what-is-the-autoimmune-paleo-pro...
Anyway, good luck. Hopefully someday our society views health care as infrastructure rather than entitlement, and persons in your situation can start a business without fear.
To get a good "sole proprietorship" plan for me cost >$1,100 a month. My healthcare cost nearly as much as my rent in Astoria, NYC.
I've spoken to many budding entrepreneurs in NYC, and they have told tell that the loss of an employer-provided healthcare plan is a major factor that stops people from quitting their jobs to start a company.
Might be NYC. I can tell you individual plans in NY run $1,500/month.
Elsewhere people with known health problems are charged higher premiums to cover their higher health costs. In New York that's illegal, so instead everyone is charged high premiums.
$500/month with some prescription coverage is a guaranteed $6k/year.
$200/month without prescription coverage is a guaranteed $2400/year - $3600 savings. If you know you'll have more than $3600/year in prescription costs, then this plan doesn't necessarily make sense, but unless you know you'll have that much in costs, it doesn't matter.
I was looking for something where I self-insure the first $10k in an HSA, and then the plan covers hospitalization+drugs past that. And those exist, but not at the lowest end.
Not sure what you mean. Those are the only HD/HSA plans I see - you self insure up the first $2k/$5k/$10k, and the insurance plan covers stuff after that. Most I've seen, deductibles under $10k carry a co-insurance split between you and the insurer up to a certain amount. In our case, if we just took the $10k deductible, we'd get everything covered after our initial $10k, and that is the 'lowest' end (I'm thinking you're meaning cost - maybe you mean something else?)
Wal-Mart gets it, that is why it encourages employees to seek public assistance and pays them so little that they still qualify.
For business and entrepreneurship the argument is the same. Increased taxes and other types of costs decrease the rewards so you'll end up with less of it. It's not that business owners don't want more money. It's that they are continually deciding between many options.
For example, years ago I had to decide between going to graduate school, getting a job in industry, and starting a business. The tax and subsidy breakdown is drastically different between all three. Of course tax implications wasn't the biggest factor in my decision, but it mattered.
High taxation doesn't logically imply that it's necessarily unrewarding to become an entrepreneur but rewarding to be a full-time employe. You can have high taxes for entrepreneurs and low taxes for employees, or high taxes for both, of low taxes for both, or high taxes for employees and low taxes for entrepreuners.
A lot of high-earning individuals are actually using the lower tax rate of corporations to lower their tax rate. If you look at a graph of tax rate versus income, it slowly increases, but after about 60k/year it becomes possible to lower the tax rate using tax palnning.
1. http://liljat.fi/2011/04/isojen-puolueiden-aanet-menevat-kan...
http://www.arcticstartup.com/2010/02/24/killing-finnish-entr...
Skim through the comments to the article: what are the general themes that are brought up?
Anyway, obviously there are people who think entrepreneurs are taxed too much in Finland. That has nothing to do with my point, though.
> At least in Finland entrepreneurs are taxed less than many full-time employees.
If entrepreneur wants money out of the company (like for rent), she pays the taxes twice. Once as a corporation (28%) and then again as capital gains tax and/or as an income tax (+ all the costs that comes with employing yourself). Rule thumb for starting entrepreneurs that you need to make at least twice the money you want to make as an individual since taxes and costs the other half.
This is more of a case that wealthy individuals have more options and sometimes they use them and not about entrepreneurship. If you don't have a high income, you're probably paying more taxes(+costs) as entrepreneur than as an employee.
An entrepreuner may be taxed the same way for his/her work as an employee is if he/she wants to. If he pays the income tax, I think that can be reduced from the corporation's profit tax just like any other corporation. There's also tax free possibilities up to 60 000€.
So, exactly what happens in the USA. The bottom rung gets no tax, the top rung evades tax, and the middle rung bears the brunt?
It's also not obvious that Nordic countries (e.g. Finland) have less entrepreneurship than the US does. If they do (I couldn't find hard data), it's as likely to be for cultural reasons as economic ones.
Scandinavia has produced a disproportionate number of artists and athletes - another kind of "entrepreneur." No doubt access to healthcare made it easier for them to pursue their passion.
Watching the ahem measuring contests people get into on HN, only caring about the exit number, I kind of believe it.
If you bootstrap yourself to $100k as a 1-man company in the Valley, the taxes come out to something like:
$7,000 CA income tax
$14,000 self-employment payroll tax
$16,000 federal tax (after deducting eligible portions of the above two)
-------
$37,000 (37%)
$8,000 labor-market contribution (AM-bidrag)
$24,000 municipal tax (kommune + healthcare tax)
$7,000 national tax (grundskat+topskat)
-------
$39,000 (39%)
$6,721 BC income tax
$4,712 CPP (government pension plan payroll tax)
$16,844 federal income tax
-------
$28,278 (28%)
How it impacts an individual also depends on how they spend their money. I spend a large proportion of my money on rent, airfare, and foreign trips, none of which incur Danish VAT, so it hits relatively little of my spending.
Also, we founded our company five years ago, and it was just the two of us for years. One of the things that kept us in California was that we had selected Kaiser health insurance, and it was unclear if we could get pregnancy coverage on another plan in another state.
Oh, and try to shut down the FDA too, with all their liability fobbing and bias toward dangerous, old, and addictive treatments.
If you're lucky enough not to get any major condition, sure, you can buy antibiotics or whatever from Mexico. But even at Mexican prices you will probably not be able to pay out of pocket for something like Avastin (cancer) or Copaxone (multiple sclerosis).
Imagine if your house and car and food were all paid for by your employer. And with a tax subsidy that makes it seem cheaper to do it that way than pay for these things on your own. Yes, leaving an employer would be a complicated choice.
I'm also not convinced employer insurance is the deal people think it is. When I left my last full time job and continued the insurance using COBRA, it cost me $400 a month. I think you wind up subsidizing everyone having a baby or that do have major health problems.
I'm in my late forties and have a high deductible policy that only cost me $150 a month before Obamacare made it go up to $260. I don't see it as much of an impediment, even now. People can spend more on coffee.
Granted, if you have poor health or a family, this can cost quite a bit more. But these things by themselves can often be a greater barrier to entrepreneurship than the cost of insurance.
Profits are possibly maximized but value provided to customers and society is destroyed. I think this is pretty much reflected in the roughly 2x per capita costs for private healthcare in the US vs costs for universal care in many other first world nations.