5 ms·

Ask HN: If you didn't have to worry about healthcare, would you start a company?

• sirsean 17y ago
  No, I'm young and healthy, and don't care about health care. I wouldn't go to the hospital anyway. Mainly, what's keeping me from doing it is that I'm doomed to obscurity and people tend to dislike me when they either see me, hear me talk, or read what I write. If anyone has experience overcoming those problems, I'd love to hear it. But "health care" is right around "what color is the sky?" on the list of things I worry about.
• kgrin 17y ago
  Since I live in Massachusetts, that's almost exactly what happened! (It wasn't/isn't free, but it was no more expensive than when I worked for BigCo).
• ryanelkins 17y ago
  I imagine most people on these forums are interested in starting a company regardless of healthcare issues. Personally, as I'm a little older and have a family to consider it's a little more of an issue but even then I feel like I can work around it and that it's not one of the major risks I consider with starting a business. So, that being said, I guess my answer to your question is "yes" although I would probably be doing it regardless of your proposed situation. I guess what you really may want to know is how many people would start a business that otherwise wouldn't, or how many people consider this a barrier to entry.
• dabent 17y ago
  I just might have started one in the last year. I was between jobs over the Spring/Summer and developing pitches and prototypes. Without going into details, health insurance is a big issue for my family. I looked at my options (I'm in the US) and there really aren't any unless my employer has insurance. I have no idea how insurance companies and employers ended up married like that, but if one wants to get/change insurance, the only option is to change employers. And it seems fewer employers offer it every year. Then I landed a gig with a very nice place that has great benefits, including epic insurance. So, for this year, I'm here in a job that's about as far one can get from a startup without being a government gig and surprisingly happy about it. That's a big 180 from where I was 6 months ago. :-)
  • mojonixon 17y ago
    " I have no idea how insurance companies and employers ended up married like that" I believe the short answer is WWII. Price controls meant employers needed to find a way other than higher wages to attract workers.
  • joshfinnie 17y ago
    The reason it is cheaper through your employer than individually is simple (or complex) math. Increasing the risk pool allows for premiums to be reduced. I am not sure that employers and insurance companies are married; you can (for a price and acceptable risk) get insurance without an employer.
  • yardie 17y ago
    They are married through price controls and tax deductions. If the choice was 10000$ additional pay or 10000$ annual insurance premium. From a payroll and tax view that insurance premium is much cheaper. Not to mention in many states, once you reach a certain number of employees you are required to offer a HMO.
• jacktasia 17y ago
  Yes. That said, I plan on doing so anyway...but that would certainly make it even easier and that much more attractive of an option.
• ams6110 17y ago
  If you didn't have to worry about buying food, would you start a company? If you didn't have to worry about paying the rent/mortgage would you start a company? If you didn't have to worry about .....
  • nostrademons 17y ago
    It's a little different from that, as there are active proposals in the U.S. to not have people worry about healthcare, and in many other countries you already don't. There are relatively few countries where you don't worry about buying food or paying the rent, by contrast.
    • docmach 17y ago
      It's also different because healthcare isn't a necessity. Many people can go for years with no health issues, but everyone needs to eat on a regular basis.
      • logicalmind 17y ago
        It depends on your age. When you're in your 20's and single and your employees are also, healthcare isn't usually a huge issue. But when you work for startup(s) during your 20's your body will take a toll from all of the hours of hard work, lack of sleep and bad diet. When that, and the likelihood of having a family, catches up to you, you will find healthcare a necessity. You may have to pay for recurring prescriptions. The birth of a child, and many other things that will surely become necessities.
        • tptacek 17y ago
          I've had car insurance for many, many years. In the past 10 years, despite paying many thousands and thousands of dollars for it, I've never "needed" it, even though I drive every day.
      • baha_man 17y ago
        "...healthcare isn't a necessity. Many people can go for years with no health issues..." If you mean that most young people in the developed world (who've been delivered by trained midwives, checked over by a doctor at birth, had all their vaccinations, regular eye tests and dental checkups, and managed not to break a bone during childhood or adolescence) generally haven't needed to see a doctor or go to hospital for urgent medical attention, then you've got a point. Of course, as they get older, they'll almost certainly need some sort of medical treatment.
• anamax 17y ago
  Please don't confuse healthcare with insurance. I went for over a decade without insurance yet I was never without healthcare. That used to be quite common, especially among folks in their 20s. Is that unthinkable for the current generation? Why? Plus, if you're talking about the US, free basic healthcare is almost universally available. It isn't pretty or convenient, but US govt services rarely are.
  • mey 17y ago
    I agree with this point, except even basic health care (in the US) is expensive especially for someone on a ramen diet. If you plan correctly financially this doesn't have to be a problem. edit: My biggest issue would be hiring my first full time employee.
  • jws 17y ago
    The big trick about uninsured healthcare in the US now is that you will pay 2-3 times market rate for everything. My local hospitals wins with a 9 times multiplier on some emergency care.
  • mojonixon 17y ago
    If you're uninsured you get price gouged. A simple trip to the doctor with some basic tests can be a months rent. I have catastrophic health insurance; $5k deductible 20% copay to $50k. It won't pay for anything, but it will give me insurance group rates. Where is this magical free basic healthcare? Does not exist. Medicaid is only free if you've already become bankrupt.
    • yummyfajitas 17y ago
      You only get price gouged if you don't negotiate or shop around. My mom is uninsured. She negotiates everything and often pays less than I do (I once compared her bill to mine). If you pay cash up front, the doctor's office will be very nice to you. Additionally, they give you stuff for free that an insurance company might pay for. An actual exchange: Mom: "$300 for a splint? No thanks, I'll just have my son tape my finger to a piece of wood." Doctor's office lady: "Oops, my mistake, I thought you had insurance. We only charge people for stuff like that when they have insurance."
• matt1 17y ago
  Could someone elaborate on the issue? How much of a problem is it?
  • zackattack 17y ago
    It's a big problem. Private health insurance is expensive, and a costly medical snafu can bankrupt you if you're uninsured. Health insurance costs significantly increase your Cost of Living(/barriers to entry, so to speak).
  • logicalmind 17y ago
    I find that it is highly dependent on your target employees. For example, if you are a recent college grad and intend to employ recent college grads, you can probably get by without health insurance. However, if you are older and/or have a family and intend to employ people who also are older and/or have a family those people will expect at least partially subsidized health insurance from the company. And the costs of health insurance are relative to the size of the group you insure. The larger company you work for, the less expensive and more comprehensive the health insurance is likely to be. For small companies with few employees you will pay a lot for health insurance.
    • coolnewtoy 17y ago
      until one of your recent college grads gets knocked up or gets his girlfriend knocked up.
• michael_dorfman 17y ago
  If the cost of health insurance is the deciding factor in your decision to start a new company, you're better off not starting--you're seriously undercapitalized.
  • logicalmind 17y ago
    Isn't this a contradiction to being "ramen profitable"? If you're only ramen profitable, how can you afford health insurance for yourself and employees?
    • michael_dorfman 17y ago
      Do you think "ramen profitable" means "able to afford only ramen, and not somewhere indoors to sleep"? In my world, "ramen profitable" means covering basic expenses, of which (modest) health insurance is most certainly one. Put another way: health insurance is not a luxury item.
      • logicalmind 17y ago
        Health insurance is a cost that comes out of your profit. If you are ramen profitable after the costs of health insurance are removed you'd be even more profitable if the cost of health insurance was not there. If you're ramen profitable without the cost of health insurance, then by definition, you can't afford to pay for health insurance.
  • tptacek 17y ago
    Repeating a point I made elsewhere, and sorry, but: The problem isn't just that health care is expensive. The problem is that it isn't available to many otherwise viable founders. You can be turned down with shocking ease by private insurers; no exceptions, no recourse except a multi-month appeals process that is no more likely to get you covered. The financial drag isn't the issue for us; the uncertainty is.
    • michael_dorfman 17y ago
• eplawless 17y ago
  Fortunately, Canada has a sane policy on public health care and this isn't nearly the issue it is in the US.
  • pwmanagerdied 17y ago
    It'd be nice if they included dental and eye care as well; those are basically the same deal.
    • mikeyur 17y ago
      Prescriptions too, please. I pay an extra $40 or so a month for blue cross extended health.
• pasbesoin 17y ago
  Yes.
• clueless123 17y ago
  Maybe the question is: if you didn't have to worry about healthcare would you leave your current job for something else. In my career, I had lots of very sharp colleagues that had no choice but to stay at their "ok" jobs because someone on the family has more than average health needs.
• SamAtt 17y ago
  I have a friend who is self-employed as a web designer. He pays $269 a month for Health Insurance. That's lower than his car payment, house payment, monthly food bill, etc... In fact, by his own admission it's only $100 more than he spends at Starbucks every month. Health Insurance is a political issue that pertains to the poor who can't afford many of the things people on this board take for granted (like morning coffee). Anyone who has the means to quit their job and start a company also should have the means to pay for Health Insurance Also, if this was a huge issue for startups than wouldn't it stand to reason that Canada, the UK, France and others would have thriving Startup industries? Ones that far out pace the U.S.?
  • tptacek 17y ago
    No, you're incorrect. Your friend was able to get $269/month health care because he is young and male. But in the US, health insurance isn't guaranteed issue. If you are not young, if you are female, or if you have ever been hospitalized before, it is very possible that you are locked in to employer-provided group coverage. It happened to us and it happened to other people I know.
• DanielBMarkham 17y ago
  If I understand you correctly, a more interesting question would be "What are the reasons you are not jumping into a startup right now?" I'd love to see a ranked set of answers to that, organized along a timeline. Since there is so much politics infused in this, however, I imagine healthcare/health insurance is going to rank a lot higher now than say five years ago. As a historical note, every startup that I've ever know that started humbly had no health insurance (although the founders had plenty of healthcare). So it can't be a determining factor in success, although it may be a determining factor in attempts. On the attempt side, most startups fail, so anything you'd invest in them -- money, health insurance, food, lodging, etc -- is odds-on an overall loss. This is why raising startup capital can be difficult. If I had to pick a freebie to get from anybody, it would easily be lodging. You can do a lot with four walls and good internet connectivity. Much more than having some sort of insurance. In my opinion, of course.
• Tawheed 17y ago
  Has YCombinator or some other sort of startup incubator considered offering health plans for startups? We're a pretty uniform population, low risk, and probably a bit smarter about lifestyle choices. I could imagine a package deal (office space, funding, health insurance) DONE.
  • abyssknight 17y ago
    Actually, that would make a good choice for a start up, no? The population is generally low risk for costly procedures and mostly need basic, no-frills care and if their business succeeds, they could be converted to a more corporate friendly policy. To be honest, I'm not sure why this hasn't been done yet.
    • deleted 17y ago
      [deleted]
  • philwelch 17y ago
    Health insurance is state by state--I can't keep my WA health insurance plan if I move to CA, for instance. Since YC already says "settle in Silicon Valley", I'm sure it would actually be easier for them to buy a deal from a CA health insurance company, though the legal wrangling would undoubtedly be epic. pg has remarked multiple times about why he doesn't provide office space, though. Not sure if the same rationale applies to health insurance.
• tptacek 17y ago
  Before we had health insurance, we lost candidates over this issue. I don't have to speculate about it. The current US health care system retards startups.
  • smanek 17y ago
    I would contend that the root cause is that we expect our employers to provide our health insurance. We don't (usually) expect them to provide our housing, food, car, or other necessities of life. I'm not an accountant, but I understand that there are tax advantages for corporations to provide insurance (instead of just giving me cash, so I can choose my own insurance). The market is much more efficient (e.g., I can more easily and directly signal what is important to me) if the consumer of a good is also the purchaser.
    • jhancock 17y ago
      The root cause is that only your employer can afford to buy you coverage and also has less risk of getting dropped if they provide coverage for enough people. As an individual, the coverage costs more and your chances of getting dropped is over 50% if you do need care exceeding your premium.
      • smanek 17y ago
        The reason the market is so unfriendly to individual purchasers (high cost, possibility of getting dropped, etc) is that the entire industry is built around and optimized for selling to large corporations.
      • pfedor 17y ago
        Do you have a source for the 50% number?
        • jhancock 17y ago
          Here's a few articles pointing to the number. I assume that an individual buyer faces a higher rate of recission than those in a large group. http://tauntermedia.com/2009/07/28/unconscionable-math/ http://tauntermedia.com/2009/07/28/unconscionable-math/ http://www.walletpop.com/blog/2009/09/02/think-youve-got-health-insurance-better-double-check-and-be/ http://www.walletpop.com/blog/2009/09/02/think-youve-got-hea... http://wintershaven.net/2009/08/04/recission/ http://wintershaven.net/2009/08/04/recission/ http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=200906161521dowjonesdjonline000607 http://www.nasdaq.com/aspx/company-news-story.aspx?storyid=2...
• jhancock 17y ago
  I would adjust the question. Free healthcare can't exist. It costs something, either through taxes or your premium for insurance. A more appropriate question would be: "If health insurance were more affordable and you were not in danger of being dropped from coverage as a small company or individual, would you start a new company?"
  • logicalmind 17y ago
    What you say is absolutely correct. But the real point of what would be considered public health insurance is that the risks are spread over a much larger group than simply a base of employees. The pricing mechanism is based on the risk of the people in the group. If the group is defined as the employees of the company, then that number is going to depend on the risk factors of the entire group. If the group is the entire population of a country then you are going to pay a rate that is based on the risks of a very large population. If the people are on average healthy you will pay less. If the people on average are unhealthy you will pay more.
    • jhancock 17y ago
      I am assuming that any company or individual covered is covered as a group of everyone the insurer covers. I see no reason for one gov entity to cover everyone. 50 to 100 non-profit co-ops would do the job: enough in each group and enough choice to ensure competition.
• sachinag 17y ago
  By far the best thing about moving to Massachusetts for oneforty was the fact that I knew I could get reasonably priced health insurance that wasn't subject to recission through the Massachusetts exchange. (Of course oneforty isn't buying people's health insurance. We're barely seed funded.) Boston/Cambridge is no Valley, but it's certainly good enough. If health insurance is the one gating factor (and geography isn't), move here.
• surfmike 17y ago
  I purchased a $130 a month high deductible ($3500) health insurance plan before quitting my job. I am healthy and under 20, however. I do know people who are healthy but have been denied (not offered insurance at a higher rate-- flat out denied) because of past procedures.
• KWD 17y ago
  I've often felt that if you would remove health insurance from the employer-employee equation completely it'd be a financial boon for business. How many more employees could be hired, how much more could be put into product development, etc., etc., if one of the largest (and always growing) company expenses was not health insurance for employees. (I'd also like to see health insurance be at a national level instead of being regulated state-by-state, but that's another topic.)
  • yardie 17y ago
    I feel the same way, but I also know it's an institution unto itself. Think about it. Employer provided healthcare has been around since WW2. And you would have to convince the big dogs MS, IBM, KBR, GM,etc. to dismantle a system that they helped create. Even if the legislation did exist to dismantle the system it would still continue through sheer bulk. ie Microsoft will always be able to negotiate a better price for MS employees due to the fact that they have thousands of employees.
• harry 17y ago
  Yes I would.
• lsc 17y ago
  eh, I use CORBA; meaning every 3 years or so I have to go get a w2 job for a while. pain in the ass, but not insurmountable.
• dpcan 17y ago
  You're thinking like an employee, not an entrepreneur. Employees stay at jobs they hate for 30 years because of their "benefits" (what a silly name for cheaper insurance) and the "hope" that they will get some retirement money. Entrepreneurs start companies because they know that if they do it right, and make a lot of money, these things will come as part of their ongoing successes.
• sriramk 17y ago
  This begs the question - what does the average YC startup do for healthcare? Do the co-founders find insurance on their own? Can a startup do 'employer-provided' insurance? What sort of work does it entail? I see some comments from tptacker regarding this but would love to hear from the wider YC community
  • evgen 17y ago
    In my experience most startups live and die based on CORBA timelines. Once you leave a job with health insurance you can pay both the employee and employer portions of the bill and continue your coverage for up to 18 months. This is probably a different story for startups that are mostly composed of post-grads without employer coverage to continue...
• listic 17y ago
  Someone please give some leads for those who are unfamiliar with US health insurance system. I've been wanting to know how health insurance works for quite some time, but putting it off.
• earl 17y ago
  I bailed on a company with a great product idea because of health insurance. Basically, I have a congenital defect in my eyes that will lead, with about 20% probability, to very expensive health bills. This (http://en.wikipedia.org/wiki/Pigment_dispersion_syndrome http://en.wikipedia.org/wiki/Pigment_dispersion_syndrome ) if anybody cares. Therefore, I simply can't live without constant health insurance coverage on the off chance I require pretty expensive treatment -- drugs, then surgery if the drugs don't work.
• wlievens 17y ago
  I don't have to worry about healthcare (living in a country with a pretty good socialised system) and I'm still too much of a chicken to go fulltime.