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Steve is absolutely right that government doesn't understand the challenges facing startups. For example, I'd put "access to affordable health care" above "acc

• sachinag 16y ago
  I've said it before - it's insane that more startups don't locate in Massachusetts in the early days. The Mass Connector can get you pretty decent coverage for around ~$250 a month. Live there, take the Megabus down to NYC for NYTM and funding, and come back. Sure, it's cold, but it's not the worst place to be otherwise.
  • keeptrying 16y ago
    How much for a single founder?
    • sachinag 16y ago
      ~$250 a person. You can do group coverage through the Connector as well, but group plans are pretty easy to get through traditional brokers once you hit four enrollees. (You may have some employees covered through their spouse or school, but you need to have four enrollees with the same plan to get group rates.) I'd recommend that startups in Mass/looking to move just have everyone pay their own health insurance through the Connector until you raise angel funding and scale up in people. (I set up the group health insurance when I led Operations at oneforty.)
      • dugmartin 16y ago
        You can also get group coverage through the Mass Busineess Association. My HSA policy is $850 month and covers me, my wife and two kids. Pretty high deductible though.
  • bhousel 16y ago
    Yeah, I have thought about that, Boston and Philadelphia aren't that far. But stop for a minute and think - we are seriously talking about commuting 2 hours to save a few hundred dollars a month on health care. Why?? Why do we even need to have that conversation? That's how broken things are. I'm a non-smoking 34 year old marathon runner.. I go to the doctor once a year, if that. Companies should be fighting over the opportunity to insure me. It shouldn't be the #1 reason I can't grow a business.
    • dpritchett 16y ago
      Parent poster wasn't saying to live in Mass. and work in NYC, just that NYC is a bus ride away for important things like meetups and funding trips. Live in Mass., work in Mass. It's great that you're healthy but business growth is going to involve taking other people on and I for one am not taking a job without health care while I have two other people depending on me. A single major health issue could bankrupt me!
    • beoba 16y ago
      Nitpick: Lots of things can happen to otherwise healthy people.
    • jdminhbg 16y ago
      I'm a non-smoking 31 year old half-marathon runner, and I'm paying $110/month in PA. I would assume you'd also save hundreds of dollars a month on rent and other living expenses in PA (or MA, though I can't speak directly for Boston). I don't think moving 2 hours away to save $1k or more per month is a bad move for a startup.
    • kungfooey 16y ago
      In NY, health insurance coverage cannot decline anyone based on pre-existing conditions. So younger, healthy applicants have to pay more since there are a lot of people in the system who are a net loss. Thus, less healthy people are covered, and the system continues become worse... it's a very bad feedback loop.
  • yummyfajitas 16y ago
    I've said it before - it's insane that more startups don't locate in Massachusetts in the early days. It's only insane if you believe that health insurance is a major barrier for startups. The fact that startups didn't relocate to MA en masse after Romneycare took effect suggests that perhaps access to capital/talent is far more important.
    • tptacek 16y ago
      Facile. People in the professional class don't tend to move "en masse". Residency is sticky for reasons beyond health insurance. Health care clearly is a factor retarding professionals from moving into entrepeneurship; if I saw it repeatedly at my very small company, think how much larger the issue must be nationally.
      • yummyfajitas 16y ago
        So startups/entrepreneurs don't move to the valley in order to increase their odds of success? I agree that many paycheck seeking professionals might not do so, but that's a rather different question. Health care clearly is a factor... I wasn't disputing that it is a factor. I was disputing the idea that it is a larger factor than access to capital or talent. Look, we hear about people moving to the valley all the time. People move to NY as well, though it's less common. Are all of these entrepreneurs "insane" (to borrow sachinag's language) for chasing capital/talent rather than Romneycare?
        • tptacek 16y ago
          First, no: the entire "entrepreneurial class", whatever that may be, has not moved en masse to the valley. If you think the entire population of startup entrepreneurs that is seriously committed to tech has moved there, or at least enough of them to support your argument, then what are we talking about? You don't believe there's a latent vein of entrepreneurship that needs to be tapped anyways. Second: yes. Most of the people who are moving to NYC and SFBA are irrational. Most of their companies fail. Everybody knows that going in. To the extent that they move entirely in support of their startups, they are crazy. (The fact is, most of the people moving aren't doing so entirely for their startup; they want to live there.) Third, I doubt most entrepreneurs even know about "Romneycare". I'm only peripherally familiar with its specifics, and, as you can probably tell, health care is one of my issues.
  • dwiel 16y ago
    In Bloomington, IN if your income is below a certain level, there is a whole office of volunteer doctors that will treat you. I've got a few friends that go there and love it. A friend of mine broke his foot over the summer and got a cast and crutches and everything for free.
    • tptacek 16y ago
      If your uninsured appendix bursts, the volunteer doctors are unlikely to keep you from going bankrupt. The health care problem isn't "doctor visits are too expensive".
      • protomyth 16y ago
        yep, it is the catastrophic that gets most people. I really wish the administration had tried to take some baby steps instead of going for something they are giving waivers to avoid and really not explaining how their thing would be different from the VA or IHS. A "flood"-style insurance to protect against the catastrophic, and changing the Health savings accounts to be easier and inheritable probably would have been good first steps.
      • regularfry 16y ago
        It's argued to be part of the problem, though. When doctor's visits are expensive, minor problems escalate because they aren't caught early enough to be cheap to deal with. At least, that's the argument. I don't claim to be an expert in these things.
  • abrenzel 16y ago
    --~$250 a month is still an insane price for a single person. I live in Illinois of all places and have decent HMO coverage for less than $100. Granted, I am not currently in a start up, but in a business of about 15 employees. Various catastrophic-only plans (assuming your state offers them) can be had for significantly less if you're healthy.-- //this is clearly not right, being dumb today and forgot to add in the employer contribution (I believe it comes to about 200 to 250 in total for our particular plan, so it is comparable, but my point about catastrophic-only plans (which are often outlawed in states like Massachusetts, still stands // The problem with MassCare (and ObamaCare) is that their mix of guaranteed issue, mandates, community rating, minimum creditable coverage guidelines, and subsidies still inflates the price of health insurance, and state subsidies can't keep up. This was evident in Massachusetts as early as 2007, right after MassCare began to be implemented (see this report for exmaple: http://www.ncpa.org/sub/dpd/index.php?Article_ID=14237 http://www.ncpa.org/sub/dpd/index.php?Article_ID=14237) I think the Startup America concept is admirable. Would that the federal government understood the real problem with starting a business in the United States right now isn't the lack of a couple billion in government programs, but the regulatory barriers and inflation in commodities and products like health insurance that prevent new firms from entering the market, inflation that the federal government has in many ways helped create.
    • sachinag 16y ago
      Your share of the coverage is $100. The cost of that coverage is most certainly not $100. Odds are your employer is paying $400 (given the standard 80/20 split at smaller companies).
      • abrenzel 16y ago
        I upvoted you, thanks for the correction. I'm a little embarrassed I wrote that. Maybe I should drink my coffee first...
    • abrenzel 16y ago
      Yeah as soon as I wrote that I realized the fallacy in the first paragraph...oops!
• keeptrying 16y ago
  $1000/month in nyc? This is for family right? Could you tell what a new single startup founder should do to get health insurance in nyc? Thanks
  • bhousel 16y ago
    This is for myself and my spouse, both in our 30s, non smoking. We just switched from a plan that was $1100 a month and included everything to a plan that is $850/month but has higher copays, higher deductable, and does not cover her allergy medicine. All I can suggest is to go to http://www.ehealthinsurance.com http://www.ehealthinsurance.com and shop around.
  • nicholasjbs 16y ago
    I'm paying for COBRA, and it's $540 a month. I could have opted to change providers when I quit my job to start up, but the other options I saw were only slightly cheaper and provided almost no coverage. You should check out the Freelancers' Union, too (I wasn't eligible since they require that you haven't been employed full-time for the three months prior to joining.) It's my understanding that part of why NY health insurance is so expensive is because we've had many of the regulations from the new health care bill (e.g., about discrimination based on preexisting conditions) here for many years and no individual mandate.
  • rdl 16y ago
    I have an HSA for $91/mo. I am single, 31, and healthy, and have enough saving to pay all costs until I hit 5k/yr. This costs less than an iPhone.
    • bhousel 16y ago
      In NYC? How?
      • rdl 16y ago
        Sorry, WA.
• rst 16y ago
  Obama's aware of this. His major legislative achievement so far is a bill intended to promote access to health insurance (though most of the major provisions aren't yet in effect) --- on pretty much the same model as the Massachusetts law which others here have mentioned.
  • nhebb 16y ago
    This is one of the things about Obamacare that I truly do not understand. I am a self-employed, type II diabetic. My health insurance premiums are massive. As I understand it, the law doesn't provide you free health care unless you are in the poverty range. For everyone else, it merely mandates that you buy insurance. How does adding a mandated expense on top of startup costs make entrepreneurship more feasible?
    • me2i81 16y ago
      Your massive bill would be smaller if you were able to buy into a community-rated health plan.
    • earl 16y ago
      Community rating
• yummyfajitas 16y ago
  Could you explain why access to health insurance (note: this is a financial product, and is distinct from health care) is a bigger issue than access to a paycheck? I have survived just fine without health insurance. I know plenty of people who do so. Surviving without a paycheck is a lot harder.
  • zachallaun 16y ago
    If you're launching a startup so that you can get a paycheck, something's wrong. [edit] My point is: While health insurance may be a barrier, a paycheck should not be. [edit2] I'll definitely explain; I apologize that it wasn't clear. I'm not trying to argue that a paycheck couldn't be a barrier to launching a startup; I'm arguing that it shouldn't be one. Requiring a paycheck translates to requiring job security, and a startup is not necessarily the path to take if that's the case. In contrast, health insurance cannot be helped as a barrier to launching as, paycheck or not, a lack of health insurance can completely ruin you in the event of an accident, which you cannot control. People flock to the Valley where money is easier to come by not because they need a paycheck personally, but because it's easier to fund your startup. I'm not even saying that, at this point, you shouldn't cut yourself a small check to live off of. Being able to pay yourself is an awesome goal, and something that everyone should look forward to. However, if you require job security (which many do), then it would likely be to your benefit to get to a point in your life where that's not a barrier before launching. And cosgroveb, if you're suggesting that I only believe those born into money can be successful founders, you're simply incorrect. Anyone from any socioeconomic background has the ultimate ability to launch a startup. No one is questioning that. The actual question, though, is when should you launch a startup?
    • yummyfajitas 16y ago
      But launching a startup so that you can get health insurance is not doing something wrong? [edit: my question is "why?" I.e., could you explain why health insurance is a barrier, but a paycheck is not? Also useful would be explaining why startups flock to the valley and NYC, where access to capital/a paycheck is easier, rather than MA where access to health insurance is easier.]
• ollysb 16y ago
  As a Londoner I'm curious, is it a legal requirement to offer employees health care or will developers just not consider positions that don't include health care cover?
  • dpritchett 16y ago
    You'd have to pay a hefty premium to get an experienced developer to take a no-health-care gig. I'm in an employment transition right now and my COBRA (transitional health care plan offering provided by law) costs add up to about 11% of my gross salary. This isn't even the top-tier plan.
  • rst 16y ago
    Right now, it depends on state law --- required in at least Massachusetts and Hawaii, but many other states have no such requirement.
  • MichaelSalib 16y ago
    For odd historical reasons, when an employer purchases health insurance for an employee, they get a huge tax deduction. So having employees buy their own is significantly more expensive, even for the exact same coverage. In addition, in most states in the US, the individual insurance market is a disaster: prices are outrageous, there is no common market where you can look up prices so you have to find and contact individual carriers, you can be denied coverage for just about anything, coverage standards are non-existent so there's no way to compare plans based on price, etc. The end result is that many developers aren't willing to take jobs where health insurance isn't included.
  • MichaelSalib 16y ago
    Also, I forgot to mention. It is difficult to forego health insurance coverage because in most states, this can mean never having private insurance again. Suppose I'm healthy and decide to work at a startup that doesn't offer health insurance. I figure I'll pay for doctor visits out of pocket. But while I'm working there, I discover I have cancer -- I need lots of treatment and there's no way I can pay for that out of pocket. But I can't get private insurance now because I have a pre-existing condition. Insurers can (and will) simply refuse to sell me a policy. If my condition is manageable enough that I can switch to a regular job that has employer provided insurance, I'll be fine because employers generally arrange with insurers to not have any pre-existing condition limitations, but if I'm too sick to get a good job with insurance, then... Well, you can see how this can spiral out of control until I end up blowing all my savings on health care bills and eventually have to declare bankruptcy. That's the kind of fear that keeps people in boring corporate jobs: the gnawing uncertainty that even if you're healthy now, you (and your family members) are one major medical crisis away from financial ruin and being forever locked out of the good insurance system. Now, this doesn't apply in MA today and as the new health care law goes into effect over the next few years, it won't apply anywhere in the US. Sorry to write so much, but in my experience, people in the UK just have no reference for how screwed up American health care is and how much fear it can inspire.
• zzzeek 16y ago
  The White House spent the whole first two years of political capital on a massive new health reform program, losing significant popularity and the House as a result. They've been roundly criticized for focusing too much on health care and not anything else. So I don't see how you can make the statement "the government doesn't understand that affordable health care is the main priority for startups" - health care was clearly their highest priority to an unprecedented degree, whether or not you agree on the approach they took.
  • tptacek 16y ago
    What's the point of this comment? Since the first two years of Obama's administration, has health insurance become less of an issue for startups? Is health insurance not on the table right now as an issue in the House? What does it matter how much "political capital" was spent?
    • mkr-hn 16y ago
      Looks like partisan raging. It's not like the administration or congress only did one thing. The House passed over 400 bills (most didn't make it to the Senate), and the Senate still got quite a few things done.
      • tptacek 16y ago
        "But the President tried his best" is not a valid answer to "health care may be a bigger issue than access to capital".
        • mkr-hn 16y ago
          The thing in the first set of quotes is not something I said.
          • tptacek 16y ago
            Nope, not directly.
• travisp 16y ago
  Is the amount you pay for health care because of specific issue that you have or is it a regional thing? I've been paying ~$80/month for high-deductible (but 100% after the deductible) health care for a few years. My HSA account will now cover my deductible if I ever need it to.
  • bartonfink 16y ago
    Now, yes, but before your HSA was that full, you could be on the hook for a large deductible if something went wrong. Regardless of whether "traditional" insurance is a sensible economic model, staring that deductible in the face before your HSA can cover it is a large incentive for some people to stay with coverage that's a little more comprehensive.
    • travisp 16y ago
      This is true, but this guy is paying $1000 month in health insurance. The savings would fully cover my deductible in 5 months (assuming such a plan is available in NY). There's no question it would be worth taking the risk, especially because if I truly couldn't afford to pay the deductible and something happened, most hospitals would let me enter into a payment plan and cut the payment.
• anonymous246 16y ago
  What's your (and others') two cents on the following two provisions: 1. Small business tax credit (35% of healthcare premium is given as a tax credit) http://www.irs.gov/newsroom/article/0,,id=223666,00.html http://www.irs.gov/newsroom/article/0,,id=223666,00.html 2. Tax credit for individuals. http://www.healthcare.gov/foryou/healthy/index.html http://www.healthcare.gov/foryou/healthy/index.html I strongly suspect that neither of these will be available to any financially responsible adult, since my soundbite version of the healthcare bill was it was geared towards the poor (many other aid programs such as food stamps dont kick in until you deplete you assets to ridiculous levels like $2500 in TOTAL including your car).
  • MichaelSalib 16y ago
    my soundbite version of the healthcare bill was it was geared towards the poor That doesn't make sense. Many of the ACA's biggest provisions (establishing exchanges, banning pre-existing condition limitations, allowing 26 year olds to stay on their parents' healthcare) are not at all limited to poor folks. They're primarily useful to middle class and up folks.
    • anonymous246 16y ago
      Exchanges and ban on pre-existing conditions don't kick in until 2014. That's why I left them out. But I agree, I should have been more precise. Allowing 26-yr old "children" to stay on parents' healthcare only makes sense if the children are poor. Hence I counted it as geared towards poor. But I can see your point of view too.
• albertsun 16y ago
  Health insurance has become much less of an issue for startup founders, provided you are under 26 and your parents have healthcare. That's one thing that will make it much easier for me to found.
• tlb 16y ago
  Capital can solve the health care problem, along with many others.
• joelhaus 16y ago
  First, the healthcare provisions intended to decrease cost have yet to go into effect. You're right about costs being too high and hope that this law has a positive impact. Here is the implementation timeline: http://www.mcclatchydc.com/2010/03/21/90794/when-health-care-bills-provisions.html http://www.mcclatchydc.com/2010/03/21/90794/when-health-care... Second, this comment offers a valuable non-tech perspective on Startup America and thought it was worth pointing out: http://steveblank.com/2011/02/08/startup-america-dead-on-arrival/#comment-8158 http://steveblank.com/2011/02/08/startup-america-dead-on-arr...
  • muhfuhkuh 16y ago
    "a valuable non-tech perspective" That comment was absolutely golden, and an idea that I've advocated for a long time now. We can't rely on web/high/bio/green technology to save us. As a heterogeneous society with differing skin tones and accents and places of origin, we also have differing education levels. You can't say "hey there, person from a mining town with 5 generations of mining-town subsistence living, come join us over in good ol' Silly-Con valley and pull up a cubicle, work on some Erlang". But, is Mining Jane somehow less deserving of a shot at entrepreneurship than Aspie Joe who was raised with a keyboard under his fingers? When it boils down to it, they're both a big risk, and as we've seen our fair share of pizzerias and beauty supply shops go out business in our lifetime, we've also seen tech flameouts of the scale that makes the pizzeria one look like a rounding error. And, that's the _vast majority_ of *-tech venture. Only a few come out on top. I think a refocus of the SBA and Startup America and all those other things should be to empower entrepreneurship at _every_ skill, education, and economic level. Look for opportunities like Champs. Set up a 1-2 million dollar fund for them to continue educating, maybe give out grants. So what if there's a barber shop or bodega or gun shop on every block. I'd much rather they toil and struggle away on a business than slog it out at the french frier for the big Clown McMachine. And, when they fail, hey they fail. But, they fail with a much better feel for how real business is supposed to run, and they might get better at it (or go work for someone else in a much higher position than one that requires bell-bottom uniforms and a paper hat).
• nostromo 16y ago
  Move to San Francisco. While working on your startup you can be eligible for Health SF http://www.healthysanfrancisco.org/ http://www.healthysanfrancisco.org/ -- basically free health insurance from the city.
  • earl 16y ago
    It's not that good. Just for starters, coverage stops at the edge of the city. Break your leg skiing in Tahoe and you're out of luck.
• mixmax 16y ago
  Well it looks like there's at last a place where Europe is ahead in the startup game.
• kungfooey 16y ago
  I moved out of NYC to a more affordable state for this very reason. In 2009 my health care costs and rent were nearly all of my take-home pay. I had a kid on the way and it was going to be even worse, so I moved. Now my healthcare costs, while still significant, fell by 50%. I also rent a 3-bedroom house for about half as much as I paid for rent on a 1-room apartment. With those savings, I can afford to fly back to NYC when I need to as often as I like. (FWIW, I now live in Nashville. I also don't have to fool around with NY+NYC income taxes, which are also significant - plus their nice little 'unincorporated business tax' just for freelancers like myself.)