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

https://news.ycombinator.com/item?id=976344

25 105 17 years ago

news.ycombinator.com

If health insurance for yourself and your employees was not a consideration (taken care of without cost) and wouldn't change, would you start a new company in the next year?

kgrin• 17 years 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• 17 years 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• 17 years 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. :-)

mojonixon2• 17 years 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• 17 years 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.

yardie2• 17 years 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• 17 years 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• 17 years 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 .....

nostrademons2• 17 years 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.

docmach2• 17 years 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.

yummyfajitas7• 17 years ago

Many EU countries have welfare so generous that one need not worry about buying food, paying rent or paying for healthcare.

Why not look to those countries and see if they have more startups?

notauser• 17 years ago

I do cook at home a lot, saving about $500 a month over what I once paid. When I revert to having money again I can just switch back.

I share an apartment, saving about $2,000 a month over what I was paying before. When I have money again I can just switch back.

I can't really downgrade health care in the same way, as when I have money again they won't be able to pull my amputated leg out of the freezer and give me the hypothetical costly surgery that might have saved it.

jstevens85• 17 years ago

Your argument is that health care is the same as food/accomodation, and therefore should be treated the same way. It definitely isn't. Food and rent are a fixed cost that are identical each week. By being frugal and possibly living at home or relying on a spouse, one can keep it at a very low rate, for example $100 a week. The cost of health care can quickly reach several hundred thousand dollars in a matter of days.

anamax2• 17 years 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• 17 years 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• 17 years 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.

mojonixon2• 17 years 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.

yummyfajitas7• 17 years 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."

anamax2• 17 years ago

> Where is this magical free basic healthcare? Does not exist.

It's called the county hospital plus medicaid.

> Medicaid is only free if you've already become bankrupt.

Medicaid is extremely cheap to free if you don't have an income, which is the premise of the question.

matt1• 17 years ago

Could someone elaborate on the issue? How much of a problem is it?

zackattack• 17 years 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).

logicalmind7• 17 years 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• 17 years ago

until one of your recent college grads gets knocked up or gets his girlfriend knocked up.

michael_dorfman3• 17 years 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.

logicalmind7• 17 years 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_dorfman3• 17 years 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.

tptacek16• 17 years 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_dorfman3• 17 years ago

Really? Which state are you in?

I used to work for a private health insurer (in the US) and our "group" coverage was offered to businesses of 2 people (i.e., a founder and one employee). At that time, at least, sole proprietors were in the "individual" coverage category, but there was talk about changing that.

eplawless• 17 years ago

Fortunately, Canada has a sane policy on public health care and this isn't nearly the issue it is in the US.

pwmanagerdied• 17 years ago

It'd be nice if they included dental and eye care as well; those are basically the same deal.

mikeyur• 17 years ago

Prescriptions too, please. I pay an extra $40 or so a month for blue cross extended health.

pasbesoin• 17 years ago

Yes.

clueless123• 17 years 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• 17 years 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.?

tptacek16• 17 years 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.

DanielBMarkham3• 17 years 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• 17 years 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• 17 years 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.

philwelch3• 17 years 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.

tptacek16• 17 years 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.

smanek2• 17 years 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.

jhancock4• 17 years 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.

mcculley• 17 years ago

I wish it were true that there were a free market that employees can participate in.

I run a small company. If I were to take the monthly premium I pay for my employees and instead give it to them as cash, they could not get health care or insurance anywhere near as good.

earl3• 17 years ago

And I would contend (because I'm right) that you have no idea what you're talking about.

The single most important feature of group health coverage, even more than the lower costs, is the fact that they generally don't (and in many places can't) require health exams beforehand. This is obviously crucial for people with health problems. For example, if you are a survivor of many types of cancer, private health insurance is unavailable at any price.

Perhaps you should take 2 minutes to educate yourself instead of spewing market efficiency nonsense.

yummyfajitas7• 17 years ago

My startup loses candidates because I can't afford to pay them. I don't have to speculate about it. The current US wage system retards startups.

tptacek16• 17 years ago

That's interesting. Mine doesn't. We can afford to pay the candidates we want to hire. We could not simply snap our fingers and solve candidate insurance problems; it took about half a year. What's your startup again?

You also misread my comment. Losing candidates sucked but did not particularly slow us down. I didn't argue that health care retarded Matasano; I do a good enough job of that on my own. I'm arguing that if health insurance ruled out people even when we offered a good wage, it must be doubly hard for people who want to start from zero.

[oh, hey, ps for readers: we're hiring: http://news.ycombinator.com/item?id=953114 --- of course we have health insurance]

jhancock4• 17 years 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?"

logicalmind7• 17 years 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.

jhancock4• 17 years 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• 17 years 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• 17 years 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• 17 years 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.)

yardie2• 17 years 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• 17 years ago

Yes I would.

lsc• 17 years 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• 17 years 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• 17 years 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• 17 years 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• 17 years 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.

earl3• 17 years 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 ) 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.

sirsean• 17 years 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.

wlievens2• 17 years 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.

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

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