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How does this reconcile with the current system for more established firms where employers typically contribute a substantial amount towards subsidizing employe

How does this reconcile with the current system for more established firms where employers typically contribute a substantial amount towards subsidizing employee healthcare plans? Not to be a downer, but this feels like an offramp from our current system down to an even worse one, one where employers can now substantially cut back on employer contributions towards health insurance. It may be great for your success, but it just feels like it may prove to be a net-negative on US healthcare coverage generally because of the loss of collective bargaining by employers on behalf of employees, assuming the model takes off.

kevc 7y ago
We are really focused on providing this as an "on-ramp" for small employers. Providing large employers an "off-ramp" isn't a use case we have seen much interest in. However, there is an interesting historical precedent with retirement plans, which suggests that there can be systemic benefits that come when employees have more control. Pre 1978, employers offered pensions as a retirement benefit, and like health insurance today, they were selected and managed by an employer — and all kinds of bad behavior resulted in this misalignment of the buyer and the beneficiary. 401(k)s were the consumer-driven answer to this, allowing companies to offer tax-free funds that the employee could manage themselves. Since 401(k)s were easier for employers, the number of businesses offering retirement benefits grew significantly, and the number of employees reaping the tax benefits grew as well.
- eganist 7y ago
  I see your point, but to highlight a critical point of comparison: that's emblematic of the risk to healthcare. Pensions were an actual benefit to employees, largely subsidized by employers and taking into account various employment factors e.g. length of employment, salary, etc. With the advent of 401k, that expense was shifted almost entirely to the employee save for a remaining "match" benefit that the employer still covered. Retirement and healthcare are two areas where people are generally unable to operate with sufficient foresight, opting for plans and financial decisions that make less long-term sense. Hopefully you see my concern. It's not in your investors' best interest for you to cap out the size of businesses that can buy into your service, but (and this is me dreaming) if you re-charter as a public benefit corporation toward this end, you may successfully build a supportive grassroots coalition to drive you forward within your target market (small businesses). --- Beyond that, there might be value in your team offering collective-bargaining-aaS on behalf of your growing small business clients. That way you're extracting value not from employers/employees but from the insurance industry instead.
  - kevc 7y ago
    We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful.
    - eganist 7y ago
      > We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful. This is nice. Infinite power to you if you find success with this angle; I'd support it.
    - thedance 7y ago
      Again I don't want to attribute this to you or your company, but the number of right-wing dog whistles you have used in this discussion is alarming. Allowing insurance to be sold across state lines is generally a strategy desired by people who want to drive a stake in the heart of the Affordable Care Act. Interstate sales of health plans will have the same effect as interstate banking and lending: a race to the bottom in which insurers choose their regulators. (The other dog whistle is "aligned incentives" where you subtly blame consumers of medical services for presumably squandering their insurers' money.)
      - dang 7y ago
        Please don't take HN threads further into ideological flamewar. This guideline is worth remembering in a case like this: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - thehappypm 7y ago
    Pensions are fantastically unsustainable. 401(k)s are much more responsible -- it's your money, you don't have to depend on a new crop of people funding your pension.
lotsofpulp 7y ago
> Not to be a downer, but this feels like an offramp from our current system down to an even worse one, one where employers can now substantially cut back on employer contributions towards health insurance. Keeping the benefit costs opaque by tying it with employers is what allows these shenanigans to happen. I can tell my insurance company to reduce covered providers, adjust deductible and oop max and copays if I want to reduce their compensation. But the employee doesn’t know the numbers so they can’t figure out if I cut their pay or not. By decoupling this and making all pay straight cash, it would give the employees a better position at the bargaining table. Price transparency is always good for the little guy.

kevc 7y ago

We are really focused on providing this as an "on-ramp" for small employers. Providing large employers an "off-ramp" isn't a use case we have seen much interest in. However, there is an interesting historical precedent with retirement plans, which suggests that there can be systemic benefits that come when employees have more control. Pre 1978, employers offered pensions as a retirement benefit, and like health insurance today, they were selected and managed by an employer — and all kinds of bad behavior resulted in this misalignment of the buyer and the beneficiary. 401(k)s were the consumer-driven answer to this, allowing companies to offer tax-free funds that the employee could manage themselves. Since 401(k)s were easier for employers, the number of businesses offering retirement benefits grew significantly, and the number of employees reaping the tax benefits grew as well.

eganist 7y ago
I see your point, but to highlight a critical point of comparison: that's emblematic of the risk to healthcare. Pensions were an actual benefit to employees, largely subsidized by employers and taking into account various employment factors e.g. length of employment, salary, etc. With the advent of 401k, that expense was shifted almost entirely to the employee save for a remaining "match" benefit that the employer still covered. Retirement and healthcare are two areas where people are generally unable to operate with sufficient foresight, opting for plans and financial decisions that make less long-term sense. Hopefully you see my concern. It's not in your investors' best interest for you to cap out the size of businesses that can buy into your service, but (and this is me dreaming) if you re-charter as a public benefit corporation toward this end, you may successfully build a supportive grassroots coalition to drive you forward within your target market (small businesses). --- Beyond that, there might be value in your team offering collective-bargaining-aaS on behalf of your growing small business clients. That way you're extracting value not from employers/employees but from the insurance industry instead.
- kevc 7y ago
  We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful.
  - eganist 7y ago
    > We are extremely interested in engaging in group bargaining for lower rates and are actively working with experts who have experience doing this. A recent federal ruling has opened the door to doing this across state lines, which could be very powerful. This is nice. Infinite power to you if you find success with this angle; I'd support it.
  - thedance 7y ago
    Again I don't want to attribute this to you or your company, but the number of right-wing dog whistles you have used in this discussion is alarming. Allowing insurance to be sold across state lines is generally a strategy desired by people who want to drive a stake in the heart of the Affordable Care Act. Interstate sales of health plans will have the same effect as interstate banking and lending: a race to the bottom in which insurers choose their regulators. (The other dog whistle is "aligned incentives" where you subtly blame consumers of medical services for presumably squandering their insurers' money.)
    - dang 7y ago
      Please don't take HN threads further into ideological flamewar. This guideline is worth remembering in a case like this: "Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- thehappypm 7y ago
  Pensions are fantastically unsustainable. 401(k)s are much more responsible -- it's your money, you don't have to depend on a new crop of people funding your pension.

lotsofpulp 7y ago

> Not to be a downer, but this feels like an offramp from our current system down to an even worse one, one where employers can now substantially cut back on employer contributions towards health insurance. Keeping the benefit costs opaque by tying it with employers is what allows these shenanigans to happen. I can tell my insurance company to reduce covered providers, adjust deductible and oop max and copays if I want to reduce their compensation. But the employee doesn’t know the numbers so they can’t figure out if I cut their pay or not. By decoupling this and making all pay straight cash, it would give the employees a better position at the bargaining table. Price transparency is always good for the little guy.