9 ms·

For all of the talk about the impact of higher cap gains taxes on startups, the far more important impact is likely to be that potential founders will have a (s

by kgrin 17y ago

For all of the talk about the impact of higher cap gains taxes on startups, the far more important impact is likely to be that potential founders will have a (slightly) easier time leaving their jobs and purchasing insurance on a less-broken individual market.

mmastrac 17y ago
Plus it'll be easier for us to poach employees with families from big companies. I couldn't imagine what it would take to get someone with a preexisting condition at a startup.
- Vivtek 17y ago
  You couldn't. I mean, speaking as the father of a child with kidney disease - forget it. Impossible. That freedom, the freedom to start a company even if your children are sick, is granted only to the very rich in this country. Until - I hope - now. It remains to be seen how much hash was made of the bill during the sausage-making process.
  - dcurtis 17y ago
    This isn't really true. You can incorporate a company and as long as you have two US citizen employees, you can get a company health plan that bypasses pre-existing conditions. (This is true in California by law, but I am not sure about other states)
    - abstractwater 17y ago
      Very interesting. Can you provide a quote/link of the legislation or some other authoritative sources about this?
    - 100k 17y ago
      Enjoy getting screwed by your group rate with a pre-existing condition in a risk pool of that size.
    - mediaman 17y ago
      This is true only in the most technical sense -- health insurers are known for dropping entire small companies that have unusually high claims. The smaller the company, the faster they'll drop you.
  - henrikschroder 17y ago
    Wow, that this problem exists in the US wasn't even on my radar. I could understand that you couldn't do a startup because you might be too sick yourself or have to spend time caring for a sick family member, but the financial aspects of it never crossed my mind. Being from a country with universal healthcare completely moves that out of the picture. Now I understand why you guys on here think this is such a big deal to US startups.
- cperciva 17y ago
  I couldn't imagine what it would take to get someone with a preexisting condition at a startup. It's easy: Just open an office in Canada. For what it's worth, "pre-existing medical condition" is the #1 reason why Tarsnap is not a YC company.
  - mmastrac 17y ago
    We (DotSpots) are distributed and I'm up in Calgary, Alberta. Works well for the two of us up in Canada. It let me cofound the company and work for a while with no salary for some time without having to worry about my family's health. Unfortunately it doesn't help much when hiring from the USA - the majority of our company is scattered around the states. Is tarsnap Canadian-founded?
    - cperciva 17y ago
      Tarsnap is my (sole-founder) startup, based on Vancouver.
      - mmastrac 17y ago
        Glad to see another Canuck here. If you're ever one province over, give me a shout.
        joegaudet 17y ago
        Totally Irrelevant, but I come from both these places. Born in Calgary, recently moved to Vancouver. My nascent startup (Matygo) has yet to consider anything along the lines of health and dental etc.
    - xal 17y ago
      This is off topic but ARG. If you are in canada do not work without paying yourself a salary! If you have any investment rather pay yourself salary and claim 60-80% of your salary back under SR&EDs. Much better use of your money and you can even reinvest the money you took out if you absolutely have to (after deducting income tax that is).
gte910h 17y ago
The day pre-existing conditions don't matter is the day the us explodes with small businesses.
- waterlesscloud 17y ago
  There's a difference between "covered" and "doesn't matter". What I'm not sure about is what, if any, the price difference in premiums will be. Just because they're required to cover you doesn't mean they have to do it cheaply. I do know adults with preexisting conditions will be in some sort of special "temporary pool", whatever that might mean. No clue on the cost.
  - grandalf 17y ago
    I think the plans specify that no plan may cost more than 2 or 3 times the cost of the cheapest plan.
    - protomyth 17y ago
      I am curious, where is that language in the actual bill?
- jacoblyles 17y ago
  As a counterpoint, countries that already have this are far behind the US in small business creation. Despite this supposed handicap, the United States has the most dynamic large economy in the world. It turns out that the government soaking up a large portion of the GDP to pay for expensive public benefits diverts capital away from financing private ventures, and this has a detrimental effect on entrepreneurship. If universal health care were really that important to entrepreneurship, why isn't Silicon Valley in Europe?
  - jeremymcanally 17y ago
    This sort of economic handwaving makes a lot of assumptions. Silicon Valley isn't in Europe for a lot of reasons, American engineers being the driving force behind it notwithstanding. We have such a strong small business unit because (a) a lot of our economy has always been driven by small business (that "American ingenuity" people always talk about and (b) U.S. laws are very friendly to the small business. And since when does our government really get involved with "financing private ventures"? Banks aren't paying out for insurance (and will probably pay slightly less under this reform), and most VC's will have to pay about 2% more in tax. So maybe 5-10 useless web startups a year won't happen, but I don't think it's going to slow down small businesses at all. Many of the people I know who would start one or join an existing one can't because of health insurance.
MartinCron 17y ago
It's not just founders, it's a big deal with startup staffing in general. I took an effective pay cut when I went to work for a startup because they weren't big enough to buy health insurance in bulk the way my previous employer could. My CEO wrote about this last year: http://www.benhuh.com/2009/08/01/the-killer-fear-of-guaranteed-healthcare/ http://www.benhuh.com/2009/08/01/the-killer-fear-of-guarante...
- grandalf 17y ago
  Why does it matter whether your pay cut was in the form of a perk or salary? Clearly if your startup employer chose to offer you cash instead of a healthcare plan, it did so because it thought you'd value the cash + flexibility more than you'd value the plan. It's simple for any small business to sign up for a group plan for employees... and it's not the cost that is the issue, it's the perceived value of the service.
  - MartinCron 17y ago
    What I was trying to express, poorly, is that the same benefits package is much more expensive to the smaller employer than to the larger one. For me, what it meant was that I had to make a (relatively small) sacrifice to take a job. For others, it might be the difference between being able to work at a startup or stay with a soul-crushing big company.
    - grandalf 17y ago
      What it boils down to is that startups sometimes pay less than larger, established firms. It doesn't matter how you break down the compensation into salary and perks. So while it's true that someone with a preexisting condition might not be able to take a job IF the compensation wasn't high enough, it's irrelevant whether the compensation includes healthcare or if it doesn't.
deleted 17y ago
[deleted]
ubernostrum 17y ago
Indeed. One of the smartest things in the bill -- and yet one which has received little to no fanfare -- is the mandate for insurance exchanges. In case you haven't followed that, the idea is basically to match up people who are looking for private insurance with companies offering policies, but to build in the ability to lump the customers together into ad-hoc risk pools. For the insurer this is the same as taking on, say, a medium-sized company with X employees, which means the terms offered can be far better than traditional individual policies.
- vishaldpatel 17y ago
  I wonder if this can then be bundled up into a security :P (pretty evil, I know..)
- jcnnghm 17y ago
  So won't that result in somebody that's healthy, like me, having to pay more so somebody that doesn't take care of themselves can afford health care.
  - ubernostrum 17y ago
    A larger risk pool tends to drive premiums down, not up. Of course, this presumes that private insurers determine premiums in a rational manner, which may not be the case (and if it is not the case, then you're going to pay more no matter what).
anamax 17y ago
> For all of the talk about the impact of higher cap gains taxes on startups It's not startups. It's single people making more than $200k or married couples making over $250k. The latter affects more people than the former.

by kgrin 17y ago

mmastrac 17y ago

Plus it'll be easier for us to poach employees with families from big companies. I couldn't imagine what it would take to get someone with a preexisting condition at a startup.

Vivtek 17y ago
You couldn't. I mean, speaking as the father of a child with kidney disease - forget it. Impossible. That freedom, the freedom to start a company even if your children are sick, is granted only to the very rich in this country. Until - I hope - now. It remains to be seen how much hash was made of the bill during the sausage-making process.
- dcurtis 17y ago
  This isn't really true. You can incorporate a company and as long as you have two US citizen employees, you can get a company health plan that bypasses pre-existing conditions. (This is true in California by law, but I am not sure about other states)
  - abstractwater 17y ago
    Very interesting. Can you provide a quote/link of the legislation or some other authoritative sources about this?
  - 100k 17y ago
    Enjoy getting screwed by your group rate with a pre-existing condition in a risk pool of that size.
  - mediaman 17y ago
    This is true only in the most technical sense -- health insurers are known for dropping entire small companies that have unusually high claims. The smaller the company, the faster they'll drop you.
- henrikschroder 17y ago
  Wow, that this problem exists in the US wasn't even on my radar. I could understand that you couldn't do a startup because you might be too sick yourself or have to spend time caring for a sick family member, but the financial aspects of it never crossed my mind. Being from a country with universal healthcare completely moves that out of the picture. Now I understand why you guys on here think this is such a big deal to US startups.
cperciva 17y ago
I couldn't imagine what it would take to get someone with a preexisting condition at a startup. It's easy: Just open an office in Canada. For what it's worth, "pre-existing medical condition" is the #1 reason why Tarsnap is not a YC company.
- mmastrac 17y ago
  We (DotSpots) are distributed and I'm up in Calgary, Alberta. Works well for the two of us up in Canada. It let me cofound the company and work for a while with no salary for some time without having to worry about my family's health. Unfortunately it doesn't help much when hiring from the USA - the majority of our company is scattered around the states. Is tarsnap Canadian-founded?
  - cperciva 17y ago
    Tarsnap is my (sole-founder) startup, based on Vancouver.
    - mmastrac 17y ago
      Glad to see another Canuck here. If you're ever one province over, give me a shout.
      - joegaudet 17y ago
        Totally Irrelevant, but I come from both these places. Born in Calgary, recently moved to Vancouver. My nascent startup (Matygo) has yet to consider anything along the lines of health and dental etc.
  - xal 17y ago
    This is off topic but ARG. If you are in canada do not work without paying yourself a salary! If you have any investment rather pay yourself salary and claim 60-80% of your salary back under SR&EDs. Much better use of your money and you can even reinvest the money you took out if you absolutely have to (after deducting income tax that is).

gte910h 17y ago

The day pre-existing conditions don't matter is the day the us explodes with small businesses.

waterlesscloud 17y ago
There's a difference between "covered" and "doesn't matter". What I'm not sure about is what, if any, the price difference in premiums will be. Just because they're required to cover you doesn't mean they have to do it cheaply. I do know adults with preexisting conditions will be in some sort of special "temporary pool", whatever that might mean. No clue on the cost.
- grandalf 17y ago
  I think the plans specify that no plan may cost more than 2 or 3 times the cost of the cheapest plan.
  - protomyth 17y ago
    I am curious, where is that language in the actual bill?
jacoblyles 17y ago
As a counterpoint, countries that already have this are far behind the US in small business creation. Despite this supposed handicap, the United States has the most dynamic large economy in the world. It turns out that the government soaking up a large portion of the GDP to pay for expensive public benefits diverts capital away from financing private ventures, and this has a detrimental effect on entrepreneurship. If universal health care were really that important to entrepreneurship, why isn't Silicon Valley in Europe?
- jeremymcanally 17y ago
  This sort of economic handwaving makes a lot of assumptions. Silicon Valley isn't in Europe for a lot of reasons, American engineers being the driving force behind it notwithstanding. We have such a strong small business unit because (a) a lot of our economy has always been driven by small business (that "American ingenuity" people always talk about and (b) U.S. laws are very friendly to the small business. And since when does our government really get involved with "financing private ventures"? Banks aren't paying out for insurance (and will probably pay slightly less under this reform), and most VC's will have to pay about 2% more in tax. So maybe 5-10 useless web startups a year won't happen, but I don't think it's going to slow down small businesses at all. Many of the people I know who would start one or join an existing one can't because of health insurance.

MartinCron 17y ago

It's not just founders, it's a big deal with startup staffing in general. I took an effective pay cut when I went to work for a startup because they weren't big enough to buy health insurance in bulk the way my previous employer could. My CEO wrote about this last year: http://www.benhuh.com/2009/08/01/the-killer-fear-of-guaranteed-healthcare/ http://www.benhuh.com/2009/08/01/the-killer-fear-of-guarante...

grandalf 17y ago
Why does it matter whether your pay cut was in the form of a perk or salary? Clearly if your startup employer chose to offer you cash instead of a healthcare plan, it did so because it thought you'd value the cash + flexibility more than you'd value the plan. It's simple for any small business to sign up for a group plan for employees... and it's not the cost that is the issue, it's the perceived value of the service.
- MartinCron 17y ago
  What I was trying to express, poorly, is that the same benefits package is much more expensive to the smaller employer than to the larger one. For me, what it meant was that I had to make a (relatively small) sacrifice to take a job. For others, it might be the difference between being able to work at a startup or stay with a soul-crushing big company.
  - grandalf 17y ago
    What it boils down to is that startups sometimes pay less than larger, established firms. It doesn't matter how you break down the compensation into salary and perks. So while it's true that someone with a preexisting condition might not be able to take a job IF the compensation wasn't high enough, it's irrelevant whether the compensation includes healthcare or if it doesn't.

deleted 17y ago

[deleted]

ubernostrum 17y ago

Indeed. One of the smartest things in the bill -- and yet one which has received little to no fanfare -- is the mandate for insurance exchanges. In case you haven't followed that, the idea is basically to match up people who are looking for private insurance with companies offering policies, but to build in the ability to lump the customers together into ad-hoc risk pools. For the insurer this is the same as taking on, say, a medium-sized company with X employees, which means the terms offered can be far better than traditional individual policies.

vishaldpatel 17y ago
I wonder if this can then be bundled up into a security :P (pretty evil, I know..)
jcnnghm 17y ago
So won't that result in somebody that's healthy, like me, having to pay more so somebody that doesn't take care of themselves can afford health care.
- ubernostrum 17y ago
  A larger risk pool tends to drive premiums down, not up. Of course, this presumes that private insurers determine premiums in a rational manner, which may not be the case (and if it is not the case, then you're going to pay more no matter what).

anamax 17y ago

> For all of the talk about the impact of higher cap gains taxes on startups It's not startups. It's single people making more than $200k or married couples making over $250k. The latter affects more people than the former.