6 ms·

Add to that healthcare costs in the US are huge too, adding onto the negative pressure for startups.

by dv_dt 8y ago

pnathan 8y ago
Oh yes, that! This is much worse if you actually have to address health issues! I was considering the best case median-paid person and their calculations! If you have real health issues in your family, your best bet IMO is to work your tail off and be a salaryperson at a longer-lived Fortune 500, as those tend to have good health insurance. The family gets to see a doctor without ya'll going bankrupt - also, it often pays well.
- ModernMech 8y ago
  Interesting that in America, in order to get life saving healthcare you have to sell your life to corporate America. Work for big business or death and financial ruin await. That's not an exaggeration.
  - pnathan 8y ago
    I would nuance that somewhat: if you have a Condition, you pretty much need to work for The Man, or life's gonna be pretty rough. If you're basically healthy..... you'll probably be fine.
aksss 8y ago
Wait, entrepreneurs have healthcare costs? News to this entrepreneur. Healthcare is completely unaffordable if you start a new business and find yourself on the individual market making even a modest profit (to disqualify you for subsidies). There are a variety of factors that conspire against small businesses. The lack of health care is definitely one of the risks you need to be comfortable with if you're going to go out and start a business. The hope is that you can grow quickly enough (in employee count and profit) to set up a group plan before shit goes wrong health-wise.
- s73v3r_ 8y ago
  "Wait, entrepreneurs have healthcare costs?" Unless you're saying that the only people who should be involved in startups are the completely healthy and those without any family or the desire to start one soon, yes.
  - aksss 8y ago
    What I'm saying is that among entrepreneurs (of which I'm one) that I know, most forego health insurance in the early days because it's too expensive to buy on the individual market. And yes, damn right - if you're not healthy and risk-prone at the same time, you're probably better off not walking down that road and staying under the umbrella of an employer-sponsored health plan. It's sad that health costs can be prohibitive to starting businesses, but it's a reality.
    - mancerayder 8y ago
      Self-employed consultant here (in New York). Not entrepreneur but in a similar hellscape. A 'top' ish plan on the individual market costs around 1K, which is tax deductible, and yes, usually offers lousy service thanks to a slim network and high deductible. And yes, health care costs are a barrier to entrepreneurship in this country. Agree 1000%. But how can you take such extensive personal risk for 12K a year? Accidents happen, and genes might hit the hereditary crap lottery. If you're throwing money around in hopes of making it big, there's not 12K available? A terrible thing can happen and the costs can be much much higher. I'm surprised/shocked to hear that, especially since you imply it's common. Is this California?
    - infinite8s 8y ago
      It's only a reality in places that don't socialize the cost of bad luck.
wwweston 8y ago
The degree to which this has weighed on entrepreneurship has got to be huge. I've put off efforts because of insurance, or because money had to go into healthcare. I know other people who've done it. I know someone who ran a great autoshop out of his house in off-hours for years... but needed a state full-time job because one of his kids had a condition that only a socialized risk pool had the depth to handle. Wonder what he could have done if the shop was his full-time job. It seems obvious -- set up a socialized insurance system where if you happen to be one of society's big winners, you'll have to share more of that upside, and if/when you lose big, you get covered. That's what insurance is, socializing it just takes it to its logical conclusion, and even a guy like Hayek thought that maybe this was a place where it might be better socialized rather than private markets. In doing so you help with one of the most common risk factors and costs freeing up attention and small capital across the population.
knuththetruth 8y ago
Universal healthcare, akin to other developed countries, would be one of the greatest boons to entrepreneurship in the US.
- tryptophan 8y ago
  If this is true, why don't countries with universal healthcare have a proportionally larger/more active startup scene than the US? They don't, so that means, logically, healthcare isn't that important to a country's startup success.
  - s73v3r_ 8y ago
    It's almost like there are multiple factors to these things.
  - dv_dt 8y ago
    It's mistaken to conclude that universal healthcare isn't important. If you look at the nations with a better social safety net, many also often have more regulations that might hold up new business formation. But if you look at nations which have fixed both healthcare and have smarter regulations, there are a lot more small businesses. http://cepr.net/documents/publications/small-business-2009-08.pdf http://cepr.net/documents/publications/small-business-2009-0...
  - TheOtherHobbes 8y ago
    They do. https://www.theatlantic.com/business/archive/2017/09/sweden-startups/541413/ https://www.theatlantic.com/business/archive/2017/09/sweden-... Of course healthcare isn't the only factor, but it's a huge boon for anyone considering starting a business. The reality is that health extortion - let's not call it health insurance - in the US has a massively depressive effect on small business opportunity. Generally opportunity increases as cost of entry decreases. It's easy to start a spare-time online micro-business in the US, but it's incredibly hard, dangerous, and expensive to start a full-time company now - unless you're already independently wealthy, or can do the investor dance with sufficient credibility. The combination of high costs and investor demand for the next unicorn means there are far fewer unspectacular but profitable small businesses in the US than there might be.
at-fates-hands 8y ago
Didn't the ACA take care of that? Most of the startups I know were pushing people into the state exchanges for their healthcare needs to try and limit their overhead for providing health insurance.
- aksss 8y ago
  Snort! The individual market in my state is comprised of three types of people - those so disabled they _can't_ work, who consume extraordinary sums of cash, the subsidized, and (less each year) the small business owners/independent contractors. The last category is expected to pay more than the price of their mortgage to support the first two categories, which is completely unsustainable. After two years of trying to be a good little mousekateer, I shut it off and feel like a rube for waiting that long. I spend less on healthcare each year than my cat's vet costs, but am expected to pay the cost of another mortgage, with high deductible to boot? GTFO. I self-insure, and am happy the tax penalty bit the dust.
  - s73v3r_ 8y ago
    "those so disabled they _can't_ work" Why wouldn't they be on Medicare, unless you're in a state that declined to expand it. "I self-insure, and am happy the tax penalty bit the dust." Good for you, but realize you're not always going to be healthy. Once you're not, you're going to hope and pray that there is still a way to distribute costs like we have today.
    - aksss 8y ago
      The insurance companies report to our state board about what drives y/y premium increases in our market. This (the quote) is one of them (the 20% driving 80% of costs, if I may loosely invoke Pareto). Maybe I'm flying loose characterizing them as such, but if you're sucking up $1m-2m annually(!!) in subsidized health care services, I'm assuming you have some serious concerns preventing you from living up to your full employment potential (and God bless 'em, by the way). On the individual market, you're in a very high-risk pool, and the only people substantially contributing (e.g. zero subsidies) are in the minority and, IME, increasingly disenfranchised, either leaving the system or going back to working for the man. BTW, my state did expand medicaid and that system has plenty of its own issues. How they intersect, I neither know nor care at this point. >>"realize you're not always going to be healthy" Do you honestly think people don't realize that? I mean really? Do you honestly think I wouldn't prefer to have an out-of-pocket maximum that comes with insurance? I mean, stop assuming people are idiots and look at the problem: the premiums on the individual market are often too expensive for new business owners if they're in this doldrum-zone of being too profitable for subsidies but not large enough to build a new lower-cost risk pool out of their own employees or wealthy enough to afford a premium that costs as much as a house with no asset to show for it (when, btw, their consumption of services is less than $1k/year). This is just the reality, and a major contributing factor to why many who think about trying to start a business simply don't. It's _literally_ prohibitively expensive. Being a veteran of going two years unsubsidized on the individual market in one of the highest-cost states probably means I've done more to help distribute costs than most (i.e. "you"). That the system is unsustainable (and predictably so, btw) is not my guilt to bear. That some aren't familiar with the nature of the burden and simply think people make bad decisions doesn't bode well for a fix anytime soon. The day there's an affordable plan, I'll sign up again, rest assured. In the meantime, enjoy your employer-sponsored plan, my friend. You have less to worry about than I do while I fly solo.

Add to that healthcare costs in the US are huge too, adding onto the negative pressure for startups.

by dv_dt 8y ago

Add to that healthcare costs in the US are huge too, adding onto the negative pressure for startups.

Oh yes, that! This is much worse if you actually have to address health issues! I was considering the best case median-paid person and their calculations! If you have real health issues in your family, your best bet IMO is to work your tail off and be a salaryperson at a longer-lived Fortune 500, as those tend to have good health insurance. The family gets to see a doctor without ya'll going bankrupt - also, it often pays well.

ModernMech 8y ago
Interesting that in America, in order to get life saving healthcare you have to sell your life to corporate America. Work for big business or death and financial ruin await. That's not an exaggeration.
- pnathan 8y ago
  I would nuance that somewhat: if you have a Condition, you pretty much need to work for The Man, or life's gonna be pretty rough. If you're basically healthy..... you'll probably be fine.

aksss 8y ago

Wait, entrepreneurs have healthcare costs? News to this entrepreneur. Healthcare is completely unaffordable if you start a new business and find yourself on the individual market making even a modest profit (to disqualify you for subsidies). There are a variety of factors that conspire against small businesses. The lack of health care is definitely one of the risks you need to be comfortable with if you're going to go out and start a business. The hope is that you can grow quickly enough (in employee count and profit) to set up a group plan before shit goes wrong health-wise.

s73v3r_ 8y ago
"Wait, entrepreneurs have healthcare costs?" Unless you're saying that the only people who should be involved in startups are the completely healthy and those without any family or the desire to start one soon, yes.
- aksss 8y ago
  What I'm saying is that among entrepreneurs (of which I'm one) that I know, most forego health insurance in the early days because it's too expensive to buy on the individual market. And yes, damn right - if you're not healthy and risk-prone at the same time, you're probably better off not walking down that road and staying under the umbrella of an employer-sponsored health plan. It's sad that health costs can be prohibitive to starting businesses, but it's a reality.
  - mancerayder 8y ago
    Self-employed consultant here (in New York). Not entrepreneur but in a similar hellscape. A 'top' ish plan on the individual market costs around 1K, which is tax deductible, and yes, usually offers lousy service thanks to a slim network and high deductible. And yes, health care costs are a barrier to entrepreneurship in this country. Agree 1000%. But how can you take such extensive personal risk for 12K a year? Accidents happen, and genes might hit the hereditary crap lottery. If you're throwing money around in hopes of making it big, there's not 12K available? A terrible thing can happen and the costs can be much much higher. I'm surprised/shocked to hear that, especially since you imply it's common. Is this California?
  - infinite8s 8y ago
    It's only a reality in places that don't socialize the cost of bad luck.

wwweston 8y ago

The degree to which this has weighed on entrepreneurship has got to be huge. I've put off efforts because of insurance, or because money had to go into healthcare. I know other people who've done it. I know someone who ran a great autoshop out of his house in off-hours for years... but needed a state full-time job because one of his kids had a condition that only a socialized risk pool had the depth to handle. Wonder what he could have done if the shop was his full-time job. It seems obvious -- set up a socialized insurance system where if you happen to be one of society's big winners, you'll have to share more of that upside, and if/when you lose big, you get covered. That's what insurance is, socializing it just takes it to its logical conclusion, and even a guy like Hayek thought that maybe this was a place where it might be better socialized rather than private markets. In doing so you help with one of the most common risk factors and costs freeing up attention and small capital across the population.

knuththetruth 8y ago

Universal healthcare, akin to other developed countries, would be one of the greatest boons to entrepreneurship in the US.

tryptophan 8y ago
If this is true, why don't countries with universal healthcare have a proportionally larger/more active startup scene than the US? They don't, so that means, logically, healthcare isn't that important to a country's startup success.
- s73v3r_ 8y ago
  It's almost like there are multiple factors to these things.
- dv_dt 8y ago
  It's mistaken to conclude that universal healthcare isn't important. If you look at the nations with a better social safety net, many also often have more regulations that might hold up new business formation. But if you look at nations which have fixed both healthcare and have smarter regulations, there are a lot more small businesses. http://cepr.net/documents/publications/small-business-2009-08.pdf http://cepr.net/documents/publications/small-business-2009-0...
- TheOtherHobbes 8y ago
  They do. https://www.theatlantic.com/business/archive/2017/09/sweden-startups/541413/ https://www.theatlantic.com/business/archive/2017/09/sweden-... Of course healthcare isn't the only factor, but it's a huge boon for anyone considering starting a business. The reality is that health extortion - let's not call it health insurance - in the US has a massively depressive effect on small business opportunity. Generally opportunity increases as cost of entry decreases. It's easy to start a spare-time online micro-business in the US, but it's incredibly hard, dangerous, and expensive to start a full-time company now - unless you're already independently wealthy, or can do the investor dance with sufficient credibility. The combination of high costs and investor demand for the next unicorn means there are far fewer unspectacular but profitable small businesses in the US than there might be.

at-fates-hands 8y ago

Didn't the ACA take care of that? Most of the startups I know were pushing people into the state exchanges for their healthcare needs to try and limit their overhead for providing health insurance.

aksss 8y ago
Snort! The individual market in my state is comprised of three types of people - those so disabled they _can't_ work, who consume extraordinary sums of cash, the subsidized, and (less each year) the small business owners/independent contractors. The last category is expected to pay more than the price of their mortgage to support the first two categories, which is completely unsustainable. After two years of trying to be a good little mousekateer, I shut it off and feel like a rube for waiting that long. I spend less on healthcare each year than my cat's vet costs, but am expected to pay the cost of another mortgage, with high deductible to boot? GTFO. I self-insure, and am happy the tax penalty bit the dust.
- s73v3r_ 8y ago
  "those so disabled they _can't_ work" Why wouldn't they be on Medicare, unless you're in a state that declined to expand it. "I self-insure, and am happy the tax penalty bit the dust." Good for you, but realize you're not always going to be healthy. Once you're not, you're going to hope and pray that there is still a way to distribute costs like we have today.
  - aksss 8y ago
    The insurance companies report to our state board about what drives y/y premium increases in our market. This (the quote) is one of them (the 20% driving 80% of costs, if I may loosely invoke Pareto). Maybe I'm flying loose characterizing them as such, but if you're sucking up $1m-2m annually(!!) in subsidized health care services, I'm assuming you have some serious concerns preventing you from living up to your full employment potential (and God bless 'em, by the way). On the individual market, you're in a very high-risk pool, and the only people substantially contributing (e.g. zero subsidies) are in the minority and, IME, increasingly disenfranchised, either leaving the system or going back to working for the man. BTW, my state did expand medicaid and that system has plenty of its own issues. How they intersect, I neither know nor care at this point. >>"realize you're not always going to be healthy" Do you honestly think people don't realize that? I mean really? Do you honestly think I wouldn't prefer to have an out-of-pocket maximum that comes with insurance? I mean, stop assuming people are idiots and look at the problem: the premiums on the individual market are often too expensive for new business owners if they're in this doldrum-zone of being too profitable for subsidies but not large enough to build a new lower-cost risk pool out of their own employees or wealthy enough to afford a premium that costs as much as a house with no asset to show for it (when, btw, their consumption of services is less than $1k/year). This is just the reality, and a major contributing factor to why many who think about trying to start a business simply don't. It's _literally_ prohibitively expensive. Being a veteran of going two years unsubsidized on the individual market in one of the highest-cost states probably means I've done more to help distribute costs than most (i.e. "you"). That the system is unsustainable (and predictably so, btw) is not my guilt to bear. That some aren't familiar with the nature of the burden and simply think people make bad decisions doesn't bode well for a fix anytime soon. The day there's an affordable plan, I'll sign up again, rest assured. In the meantime, enjoy your employer-sponsored plan, my friend. You have less to worry about than I do while I fly solo.