I'm not an accountant, but I understand that there are tax advantages for corporations to provide insurance (instead of just giving me cash, so I can choose my own insurance).
The market is much more efficient (e.g., I can more easily and directly signal what is important to me) if the consumer of a good is also the purchaser.
http://tauntermedia.com/2009/07/28/unconscionable-math/
http://www.walletpop.com/blog/2009/09/02/think-youve-got-hea...
http://wintershaven.net/2009/08/04/recission/
http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=2...
I run a small company. If I were to take the monthly premium I pay for my employees and instead give it to them as cash, they could not get health care or insurance anywhere near as good.
The single most important feature of group health coverage, even more than the lower costs, is the fact that they generally don't (and in many places can't) require health exams beforehand. This is obviously crucial for people with health problems. For example, if you are a survivor of many types of cancer, private health insurance is unavailable at any price.
Perhaps you should take 2 minutes to educate yourself instead of spewing market efficiency nonsense.
You also misread my comment. Losing candidates sucked but did not particularly slow us down. I didn't argue that health care retarded Matasano; I do a good enough job of that on my own. I'm arguing that if health insurance ruled out people even when we offered a good wage, it must be doubly hard for people who want to start from zero.
[oh, hey, ps for readers: we're hiring: http://news.ycombinator.com/item?id=953114 --- of course we have health insurance]
It translates to something like "Healthy-person killer".
Most of these have economies of scale, so they will hit startups harder than big business. I don't see any particular reason to focus on health care rather than wages, office space or accounting services.
But what's your point? Yes, Chris, it would definitely accelerate startups if the government gave everyone a $50,000 refundable tax credit for starting a tech company. Also free offices would be great. The question posed was, "would you be more likely to start if". If better wages: yes. If health care: yes. If free office space: yes. If no transaction fees: yes.
Why are you singling out one of the riskiest problems with starting up and implying that it's dumb to address it?
I went for over a decade without insurance yet I was never without healthcare. That used to be quite common, especially among folks in their 20s. Is that unthinkable for the current generation? Why?
Plus, if you're talking about the US, free basic healthcare is almost universally available. It isn't pretty or convenient, but US govt services rarely are.
If you plan correctly financially this doesn't have to be a problem.
edit: My biggest issue would be hiring my first full time employee.
My mom is uninsured. She negotiates everything and often pays less than I do (I once compared her bill to mine). If you pay cash up front, the doctor's office will be very nice to you. Additionally, they give you stuff for free that an insurance company might pay for. An actual exchange:
Mom: "$300 for a splint? No thanks, I'll just have my son tape my finger to a piece of wood."
Doctor's office lady: "Oops, my mistake, I thought you had insurance. We only charge people for stuff like that when they have insurance."
Its a real problem. Insurance companies have a ton of weight by virtue of representing many patients, which they effectively leverage for lower prices. Those paying out of pocket have no such leverage, and pay much more.
Hospitals have leeway in what they charge. If you make it clear that you will be a pain in the ass unless they give you a good deal, they will do so. This is where you drop words like bankruptcy, $25/month for 30 years payment plans, and threaten to contest every single item (out of 47) on the bill. They will take all sorts of nickel&dime charges off your bill, lower prices here and there, etc, giving you a reasonable deal.
That was still a lot more money than I had at the time. If I wasn't lucky with good credit, I would still be in debt.
Need medicine for high cholesterol? Doc prescribes $100-a-month latest whiz-bang pill. Say to doc, "Dude, can't you do better than that?"
Get a $10-a-month pill from Wal-Mart that works just as well.
It's a real eye-opener. Businesses will charge anything as long as the customer doesn't actually have to write a check for it.
EDIT: Since many of you haven't experienced this, I'll share another story.
I tell the doc I have sleep apnea and would like to try a CPAP machine. He says first I need sleep study, which is around $2K. Why? Well because the new insurance guidelines say you should have one. So we talk a bit, and it becomes clear that it's not needed. Cross out $2K.
So he writes a prescription and sends me to a place in town that sells the machines. Cost? $1600. Price for same machine on the net? $350.00
I call the doc back and he faxes the prescription to the internet vendor and Bob's your uncle.
This is about $3500.00 that 99% of everybody else would have had their insurance pay that wasn't strictly necessary.
Negotiating your own healthcare prices is a terrific eye-opener.
And I'm not being a "proactive patient" out of any kind of charity on my part. My money rides on all of this stuff, and every little bit is very important. I'm just trying to make very certain that each little thing we do is priced at exactly the least amount is has to be.
[There might be a lesson here, but I refuse to spell it out.]
Self pay patients can be charged less if a standard sliding fee schedule is created by the practice. This is to make sure that discounts are applied uniformly across all self pay patients against some criteria (e.g. 10% discount for families at 400% of the federal poverty level). I'm sure there are other ways too, but they must be applied consistently.
I'd love to see the DA actually try to prosecute the doctor for this. It would make a great reelection platform: "I prosecuted doctors for failing to charge uninsured patients $300 for a $6 splint."
Nonsense. Health care isn't something you price-compare on Amazon and Best Buy before making a purchase. It's something you need right now when an unexpected medical emergency happens. That's why an insurance market exists in the first place.
Eg, the HIV positive friend? His meds w/o insurance are $1700/month. The price with insurance is $60. The manufacturer doesn't negotiate on price.
It's called the county hospital plus medicaid.
> Medicaid is only free if you've already become bankrupt.
Medicaid is extremely cheap to free if you don't have an income, which is the premise of the question.
Without going into details, health insurance is a big issue for my family. I looked at my options (I'm in the US) and there really aren't any unless my employer has insurance. I have no idea how insurance companies and employers ended up married like that, but if one wants to get/change insurance, the only option is to change employers. And it seems fewer employers offer it every year.
Then I landed a gig with a very nice place that has great benefits, including epic insurance. So, for this year, I'm here in a job that's about as far one can get from a startup without being a government gig and surprisingly happy about it. That's a big 180 from where I was 6 months ago. :-)
I believe the short answer is WWII. Price controls meant employers needed to find a way other than higher wages to attract workers.
Not to mention in many states, once you reach a certain number of employees you are required to offer a HMO.
Boston/Cambridge is no Valley, but it's certainly good enough. If health insurance is the one gating factor (and geography isn't), move here.
(I'd also like to see health insurance be at a national level instead of being regulated state-by-state, but that's another topic.)
Even if the legislation did exist to dismantle the system it would still continue through sheer bulk. ie Microsoft will always be able to negotiate a better price for MS employees due to the fact that they have thousands of employees.
pg has remarked multiple times about why he doesn't provide office space, though. Not sure if the same rationale applies to health insurance.
If you didn't have to worry about paying the rent/mortgage would you start a company?
If you didn't have to worry about .....
You may have to pay for recurring prescriptions. The birth of a child, and many other things that will surely become necessities.
If you mean that most young people in the developed world (who've been delivered by trained midwives, checked over by a doctor at birth, had all their vaccinations, regular eye tests and dental checkups, and managed not to break a bone during childhood or adolescence) generally haven't needed to see a doctor or go to hospital for urgent medical attention, then you've got a point.
Of course, as they get older, they'll almost certainly need some sort of medical treatment.
As a 22 year old, you are unlikely to suffer congestive heart failure. But you also clearly have no idea what it costs to get hit by a car, to have a sudden unexplained seizure, or a burst appendix.
The problem with health care isn't that perscriptions cost to much or that it costs too much to see a doctor. Any of us can pay for a doctor's visit. The problem is that a 4-night stay at hospital will bankrupt you.
Why not look to those countries and see if they have more startups?
I doubt health care is the reason it's harder to start up in France.
I share an apartment, saving about $2,000 a month over what I was paying before. When I have money again I can just switch back.
I can't really downgrade health care in the same way, as when I have money again they won't be able to pull my amputated leg out of the freezer and give me the hypothetical costly surgery that might have saved it.
I'd love to see a ranked set of answers to that, organized along a timeline. Since there is so much politics infused in this, however, I imagine healthcare/health insurance is going to rank a lot higher now than say five years ago.
As a historical note, every startup that I've ever know that started humbly had no health insurance (although the founders had plenty of healthcare). So it can't be a determining factor in success, although it may be a determining factor in attempts.
On the attempt side, most startups fail, so anything you'd invest in them -- money, health insurance, food, lodging, etc -- is odds-on an overall loss. This is why raising startup capital can be difficult. If I had to pick a freebie to get from anybody, it would easily be lodging. You can do a lot with four walls and good internet connectivity. Much more than having some sort of insurance.
In my opinion, of course.
A more appropriate question would be: "If health insurance were more affordable and you were not in danger of being dropped from coverage as a small company or individual, would you start a new company?"
If the group is the entire population of a country then you are going to pay a rate that is based on the risks of a very large population. If the people are on average healthy you will pay less. If the people on average are unhealthy you will pay more.
So, that being said, I guess my answer to your question is "yes" although I would probably be doing it regardless of your proposed situation.
I guess what you really may want to know is how many people would start a business that otherwise wouldn't, or how many people consider this a barrier to entry.
Mainly, what's keeping me from doing it is that I'm doomed to obscurity and people tend to dislike me when they either see me, hear me talk, or read what I write.
If anyone has experience overcoming those problems, I'd love to hear it. But "health care" is right around "what color is the sky?" on the list of things I worry about.
Employees stay at jobs they hate for 30 years because of their "benefits" (what a silly name for cheaper insurance) and the "hope" that they will get some retirement money.
Entrepreneurs start companies because they know that if they do it right, and make a lot of money, these things will come as part of their ongoing successes.
I see some comments from tptacker regarding this but would love to hear from the wider YC community
Health Insurance is a political issue that pertains to the poor who can't afford many of the things people on this board take for granted (like morning coffee). Anyone who has the means to quit their job and start a company also should have the means to pay for Health Insurance
Also, if this was a huge issue for startups than wouldn't it stand to reason that Canada, the UK, France and others would have thriving Startup industries? Ones that far out pace the U.S.?
It happened to us and it happened to other people I know.
And the costs of health insurance are relative to the size of the group you insure. The larger company you work for, the less expensive and more comprehensive the health insurance is likely to be. For small companies with few employees you will pay a lot for health insurance.
In my world, "ramen profitable" means covering basic expenses, of which (modest) health insurance is most certainly one.
Put another way: health insurance is not a luxury item.
If you're ramen profitable without the cost of health insurance, then by definition, you can't afford to pay for health insurance.
The problem isn't just that health care is expensive. The problem is that it isn't available to many otherwise viable founders. You can be turned down with shocking ease by private insurers; no exceptions, no recourse except a multi-month appeals process that is no more likely to get you covered.
The financial drag isn't the issue for us; the uncertainty is.
I used to work for a private health insurer (in the US) and our "group" coverage was offered to businesses of 2 people (i.e., a founder and one employee). At that time, at least, sole proprietors were in the "individual" coverage category, but there was talk about changing that.
We tried to get insurance ourselves, and then worked with a family friend broker, and failed both times. We could get coverage for three of us (although my daughter would have exceptions in the contract), but not for my wife. I was 28 at the time.
We're "lucky" in that we had COBRA coverage from a Maryland job before we moved here. Now that COBRA is expired, our MD insurer is required by MD law to offer us a group policy. It's decent coverage, but at almost $1000/month it only covers my wife and the kids. It would be another ~$600/month to add me.
Basically, I have a congenital defect in my eyes that will lead, with about 20% probability, to very expensive health bills. This (http://en.wikipedia.org/wiki/Pigment_dispersion_syndrome ) if anybody cares. Therefore, I simply can't live without constant health insurance coverage on the off chance I require pretty expensive treatment -- drugs, then surgery if the drugs don't work.