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What Startups Need to Know about Obamacare
- spindritf 13y agoI get prompted for username/pass. > Enter username and password for http://www.kff.org http://www.kff.org
- Kungpaoshizi 13y agofyi, virus detected on this page
- basp 13y agoFor a young, healthy person, is there any reason to spend beyond the basic "bronze" plan?
- nsxwolf 13y agoYou might only think you're healthy. You'll be the first to test out the claimed pre-existing conditions benefits of Obamacare.
- vivekajayshah 13y agoWhy would it be "claimed"? Currently in most states - small group plans are already "guaranteed issue" - which means that you will get covered, regardless of pre-existing conditions. We have insured hundreds of customers with pre-existing conditions under California's current guaranteed issue rules . These are the same rules that are going into effect nationwide for individuals.
- jared314 13y agoI can only assume his skepticism is based on the assumption that either companies will find a way around it, through some legal loophole, or the government is not telling people the whole truth about the coverage guarantee. I hope he meant the former.
- nsxwolf 13y agoI meant either. It's all empty promises until someone legally backs us up on either end. Someone gets to be the first test case.
- r00fus 13y agoIt's "claimed" because the stories of recission are real, and to be expected from an industry that simply makes more profits by cutting costs (due to the inelastic demands of sick people needing health care). This story [1] is from 2009, before passage of ACA/Obamacare. [1] http://www.dailyfinance.com/2009/09/02/think-youve-got-health-insurance-better-double-check-and-be/ http://www.dailyfinance.com/2009/09/02/think-youve-got-healt...
- eli 13y agoThe deductible might be an issue for some people. If you don't have a spare $5,000 then you might choose to pay more per month to decrease the risk you have to pay that amount all at once. Also, make sure to factor in the cost of any prescription drugs you're on.
- ctdonath 13y agoI was young & healthy. Then a doc wanted to put a pacemaker in me the next day. He was wondering why I was still alive. The infected gall bladder and aortic flutter came with no warning too.
- eli 13y agoI personally agree with the sentiment and I've never regretted having too much insurance. But in this case wouldn't that scenario likely hit the same out-of-pocket limit that's on the bronze, silver, or gold plans? Or do I not understand how that works?
- ctdonath 13y agoWhy is out-of-pocket even a concern? Health insurance should cover unlikely catastrophic issues costing 5-8 digits, leaving generally "young & healthy" patients to absorb lesser costs in exchange for practically no maintenance costs. If the bronze/silver/gold plans cover the petty stuff (routine checkups) but hit the wall on something as moderate as a pacemaker (as contrasted with, say, open-heart surgery or cancer chemotherapy), then the plans are royally screwed up. Don't go implementing a health care plan just to find out what's in it.
- eli 13y agoI'm confused. How do they "hit the wall" if you won't have to pay more than the out-of-pocket limit of $6350 per year but they still have to cover you? Do I not understand what that number means?
- pbreit 13y agoIt's a pretty straightforward tradeoff: lower premiums = higher cost of care. Bronze plans are not inferior, just priced differently.
- billybob255 13y agoIf you have hobbies that may result in injury you might upgrade.
- rdl 13y agoIf an employer is paying, it's tax deductible to the company and doesn't count as income to you.
- nsxwolf 13y agoSeems to make no mention of spouses and children.
- vivekajayshah 13y agoFamily plans are literally 2x individual plans - the maximum, deductible, and other limits are just doubled for the family. For your spouse - you can identify her rate by entering her in as an individual (her quote is her rate). Currently - our quoting tool: http://www.simplyinsured.com/small-group/first-quote http://www.simplyinsured.com/small-group/first-quote will also let you see the prices for spouses & children on current small group health insurance plans.
- bashinator 13y ago~50% of spouses are not female.
- JonFish85 13y agoI'm curious to see how this affects the startup community, especially since I'd imagine cost-wise, this affects the startup community disproportionately (20-40 year olds who fall into the "In many states, premiums are expected to increase by 15-50% for people under 40 years of age" category). Either salaries will have to rise to compensate for that, or startups will have to pay for those higher costs themselves.
- vivekajayshah 13y agoThe other potential effect is that startups continue to spend the same amount of money - but purchase lower benefit levels e.g., move to $5-10K maximums from $2-3K maximums.
- dangrossman 13y agoThe ACA also sets new maximums on maximum deductibles. My $3000 deductible Aetna plan won't be legal any more; no individual plan can have a deductible above $2500, or so I've read.
- xnickp 13y agoStartups and companies with younger employees will (should) early renew in December of this year, extending their current coverage til late 2013, avoiding the price increases in the short term. For the long term, partnering with a good broker and making sure you're on the right insurance plan can wring out some savings to make up for the increases.
- eli 13y agoYup, I think that's what we're doing. I find it strange, though, that the insurance companies are allowing us to renew early and lock in a rate for another year if they're so sure rates would otherwise skyrocket in January.
- Aloisius 13y agoWell insurance rates have been going up for years and insurance companies really have no idea how things are going to shake up. If they overcharge, they have to return the money anyway because of the Obamacare stipulation on the minimum percentage that must be paid to health care providers. Heck, the only reason Obamacare passed was because Blue Shield of California announced it was raising rates upwards of 40% which reignited the fight after everyone thought it was over.
- guelo 13y agoThis felt more like marketing material than objective information for startups.
- anigbrowl 13y agoIt is (SimplyInsured is an insurance broker) but the objective information is short, accurate, and to the point. Discussion of the changes in health insurance markets from the ACA has been sidelined by the crisis in Syria, so some timely information is good to have even if it's from a commercial source.
- joshontheweb 13y agoI hate the fact that I am being forced to do business with companies I don't trust (insurance companies) or face being penalized with fines.
- jbooth 13y agoUnless you have enough liquid cash to self-insure against high medical costs, then you're just hating the fact that you can't freeload on the rest of us who pay for insurance.
- nickpinkston 13y agoI think he wants better / more insurance options and for government policy to not favor incumbent firms / thinking.
- joshontheweb 13y agoThis. We need to focus on why the costs are so high, not how to pay for such high costs. I shouldn't NEED insurance. It should be an option if I'd like to spread out financial risk.
- snowwrestler 13y agoThe costs are so high because certain treatments are expensive; they are expensive because it took very large investments to create them; and it took such large investments because it's extremely difficult to treat many diseases and injuries. I'm in total agreement that standard, "old" services like a physical or strep test or penicillin should be paid out of pocket and subject to market forces, just like food and clothing are (two other "life-critical" industries). But it's a very big step from there to not needing health insurance at all. If you get hit by a car doing 30mph and survive, there is no getting around the fact that your treatment is going to be very expensive. IMO that exactly what insurance should be for.
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- eksith 13y agoWhen I visited that page, Avast gave me a malicious download warning: hxxp://fekhdkxtnosb.rr.nu/jquery/get.php Apparently what's loading isn't jQuery?
- nkoren 13y agoGood grief. I'm from California, and in the past couple of years I've started a couple of companies. We've been successful and now have a handful of full-time employees in addition to the usual assortment of contractors. Reading through this material -- and seeing the level cost and complexity required to sort out one's healthcare situation -- makes me incredibly glad that I emigrated to London to do it. I'm reasonably sure that Obamacare is in fact an improvement upon the status quo, but it's still an absurd level of overhead to inflict upon either individuals or businesses. It's clearly in society's interests to have a healthy populace. Everybody benefits when the "are you covered?" checklist looks like this: 1.) Are you a human being? [ ] No -- Sorry! [ ] Yes -- Great, you're covered. And the premium/co-pay policy looks like this: 2.) Can you walk out of here under your own power? [ ] No -- Stick around and we'll see what we can do. [ ] Yes -- Excellent; now put away your wallet and scram. Honestly the NHS has its problems, but it's saved my life at least once, and made my businesses far easier to get off the ground, and I'd never again live in a country that doesn't have something like it.
- psychometry 13y agoThat's great, but in case you hadn't noticed, it's practically impossible to get a U.K. work visa these days so it's not like any of us here in the U.S. can follow your lead.
- Apocryphon 13y agoUniversal pet insurance seems like the sort of thing that Scandinavian nations, or Japan, could explore in the future.
- pekk 13y agoBecause pets are just as important as human beings. Or maybe I should say, human beings are no more important than pets?
- Apocryphon 13y agoBecause those nations are wealthy enough and have sufficiently expansive social safety nets to accommodate such luxuries.
- pyrocat 13y agoI like how this article assumes all startups are in California.
- vivekajayshah 13y agoWe don't assume all startups are in California, we just have the best dataset for CA (since that is where we operate). We look forward to showing analyses like this for other states as information becomes available. For example - this is a great analysis by Forbes (which we linked to) http://www.forbes.com/special-report/2013/what-will-obamacare-cost-you-map.html http://www.forbes.com/special-report/2013/what-will-obamacar... that goes state by state.
- tocomment 13y agoDo the bronze plans qualify as "high deductible" plans and let customers use a health savings account?
- mattzito 13y agoAlso, something I don't see people talk about as much as they should (perhaps because startups are staying smaller these days), but if you have 8-10 employees or more you should be looking at a PEO. We used Insperity/Administaff, and our healthcare rates went down by 30% and the coverage got dramatically better. Plus, they added all these adjunct benefits that big companies typically offer that few people use, but don't hurt to offer your team - free legal advice, adoption assistance, cheap LTD and life insurance (and a free life insurance policy for everyone), and so on. They were organizationally harder to deal with than our previous payroll provider, but it was one of the better backoffice decisions we made period.
- basp 13y agoHaving analyzed Trinet plans against readily available group plans, I don't think PEOs are necessarily better in terms of health insurance, though that probably depends on how good your broker is.
- mattzito 13y agoI wouldn't be surprised if location, coverage type, etc. mattered quite a bit, and it's possible that in the last few years it's become less appealing. But I remember having a conversation with a friend-of-a-friend who worked as a health insurance advisor or broker (don't remember which) told me quietly that up to around 250 people, you can generally get much better rates from a PEO than from the provider directly (assuming you negotiate hard), and that she thought more companies should be using PEOs. She also felt that the reasons more companies didn't was having to basically turn over the whole benefits and payroll function to a third-party, and the loss of control therein. So - again, I'm sure there's variability, and you should look at all your options, but I think PEOs are something that startups should be considering in the mix.
- sahopson 13y agoOne thing to consider is that even with the lower rates you can get from a PEO, you're paying a setup fee and a monthly administration fee that, for a company of 8-10 people, may not make the lower insurance rates worth it. Startups innovating in the space like ours, Maxwell Health (http://www.maxwellhealth.com http://www.maxwellhealth.com), are able to offer way better tech and valuable services for startups and do all of it for free. We've been able to save money for companies who were currently using your typical PEO.
- ck2 13y agoApparently every adult in the US now has to spend $4 extra a day on healthcare. There wasn't $4 per person of waste in the system?
- humanrebar 13y agoAlternate hypotheses: 1. There's more waste in the system now. 2. The money is paying for people that weren't being treated before. 3. The money is paying for risk that wasn't being assumed before
- qdog 13y agoNot mentioned: You might now be able to hire a much wider variety of people who couldn't come work for you before because of healthcare worries.
- vivekajayshah 13y agoThat is a really great point. We wanted to make it - but were trying to find a data-backed way of showing it. Do you know of any studies/reports that show offering healthcare - results in lower hiring costs, more applicants, more qualified people, etc?
- sahopson 13y agoAflac's most recent WorkForces report (we blogged about some key findings a few months ago: http://blog.maxwellhealth.com/post/52789613016/what-do-employees-want-unraveling-the-latest-data-on http://blog.maxwellhealth.com/post/52789613016/what-do-emplo...) has some good data on this.
- qdog 13y agoI have not, but anecdotaly it's one of my own main concerns for being able to join a startup. If/when health coverage follows the person wherever they may work, it would make moving jobs a lot easier.
- chris11 13y agoThis does make me curious how much the government subsidizes some of their health care plans. I'm on Tricare Young Adult right now, and switching over to an equivalent health plan would probably double my monthly premiums and add at least $6,000 in deductibles.
- old-gregg 13y ago> Will my rates go up? > Yes! (~40% increase) What?! What was the point then? The cost of healthcare in US was already 5-6x of a typical EU nation, and we're looking at additional 30% increase? WTF! How do we stop this forced re-distribution of wealth from the general public to healthcare workers and (via government-backed loans) to Wall Street?
- akgerber 13y agoThe point (or at least one of the points) is that you cannot be permanently trapped without insurance, and thus essentially unable to access the American healthcare system, if you acquire an expensive pre-existing condition, which many people do as they age from being young, healthy people to older, unhealthy people. Moreover, your premiums may go up, but if your income is low, those premiums will be subsidized. Merely banning health plans from excluding those with pre-existing conditions doesn't work, as you may know if you've ever had the displeasure of purchasing insurance on the individual market in New York State. Another 'point' of the law is to decrease the rate of increase of healthcare costs, and preliminary indicators are good: http://www.kaiserhealthnews.org/daily-reports/2013/july/30/health-care-costs.aspx http://www.kaiserhealthnews.org/daily-reports/2013/july/30/h... There are very few young, healthy, high-income people in the United States buying health insurance on the individual market, and, quite frankly, they're able to take care of themselves.
- old-gregg 13y agoThanks for the link, very interesting. But I fail to see how will this help us reduce the healthcare costs by several factors? (where they should be) "Slowing cost increases" is fantastic but it's too late: the costs are already at 500% of normal and I just don't see how will this be fixed. An example: a 3-hour stay at the hospital (wrist surgery) was billed to me at $44K which is what insurance company actually paid. It included a few hundred dollars for a can of apple juice.
- akgerber 13y agoI am willing to bet your health insurance did not actually pay $44K, but rather the rate they had previously negotiated with an in-network providers for the services rendered. The high cost of healthcare stems from many systemic factors, all of which are pretty thoroughly screwed up. Tearing the system down and replacing it with something entirely new (perhaps a single-payer system, or a system with single-payer basic insurance) would be a great idea, but reorganizing an industry representing 17.9% of GDP[0] of one of the world's largest economies is a nontrivial undertaking, especially with one of the two major political parties dedicated to preserving the status quo by any means available. [0]https://en.wikipedia.org/wiki/Health_care_in_the_United_States https://en.wikipedia.org/wiki/Health_care_in_the_United_Stat...
- muzz 13y agoThe graphic they used shows the Bronze plan is $122 per employee per month. That's far, far cheaper that I had been lead to believe, from some of the articles written about the subject.