Is employer-based health insurance a barrier to entrepreneurship?

Insurance in general is an impediment to entrepreneurship. I know our insurance costs are way more per unit than those of larger companies. I don't know if the higher costs could be attributed to the marketplace or the fact the larger companies are much more sophisticated in their risk management.

Right, US heath insurance is a form of collective bargaining. The more people you have the more you can negotiate. If you have a small group you cost are exponentially higher and the conditions covered significantly less.

I once bought a policy for myself, we had just exited one of our startups and I was on my own and working freelance. So I had no insurance. I was a 25 year old male and the only health problem I had was high blood pressure. It is/was controlled by medication.

Anyway, given that I was essentially a group of 1, the policies available to me where pretty expensive. If I recall correctly they where around $1000 a month for me. I did not have family at the time so it was just me.

Further I had a $500 annual deductible (I had to spend $500 before they started paying anything) then the per visit co-pays where pretty steep too. They ruled almost every possible male related problem a preexisting condition, so if I had a major medical issue related to any of them, they would not cover it and probably the wost of all, self purchased insurance plans don't cover perscriptions, these are a huge medical expense.

So not only where the policies expensive but they where essential useless for 2 years while you run down the clock on the preexisting conditions clauses. Given that many people are insured through a company policy or medicare many never deal directly with the reality of trying to get a decent policy on their own. I have to say, when I had that experience I realized how broke the insurance system is, it is totally stacked in the favor of the insurance company and the only way to claw some of that favor back is through collective bargaining.

Offtopic, but the parent post should not be downvoted. It clearly adds to the discussion. (I can barely read it to make sense of the replies!)

Please, don't downvote when you think someone is wrong; downvote when their post doesn't contribute.

> The more people you have the more you can negotiate. If you have a small group you cost are exponentially higher and the conditions covered significantly less.

I have not found this to be true. I run a small company in Florida. We have BlueCross BlueShield. Comparing notes with other employers, big and small, the size of the group does not appear to make a difference. What seems to matter more is the makeup of the group in terms of age, gender, and preexisting conditions.

There is a huge difference between buying individual insurance and qualifying as an employer group of two or more.

To give some perspective I now live in the US and have, as best as I can tell, excellent insurance from my employer.

I am Australian and have lived in the UK, Switzerland and Germany so I can compare all of these.

Australia has a mix of private and public health care. You pay 1.5% of your income as theMedicare levy. If you have sufficient income but no private hospital insurance, you pay a surcharge (1% iirc). The previous (Liberal/National, which is actually conservative) government made private health insurance tax deductible. I can't remember but the current government has tried to roll that back but I think has so far failed (to get it through the Senate).

Private health insurance pays you a portion back of each expense, a system I actually think is not good. It encourages people to "get their money's worth".

Doctor surgeries are all small businesses so they have differing hours, costs, etc. Medicare pays for a part of that bill. Low income earners can generally get their doctor visits bulk-billed, meaning the practice only charges the government rebate so there is no out of pocket expense.

For years I had no private health insurance. Any serious hospital care (eg cancer treatment, transplant, serious injury, heart attack, stroke, etc) could be covered in the public system. The private system seems like it's for people who don't want to share hospital rooms.

Some so-called elective surgery can have long waiting times which is why I say I'm self-insured. If I needed something like this I could pay $2-5000 out of pocket (large medical expenses are tax deductible too). Not everyone has the disposable income for that.

The one weird thing is private health insurers have "community pricing" (I forget the exact term). That means they charge the same premium for everybody. The net result is young people don't get it and old people drive up the premiums.

The UK system is similar except they take 11% of your income (capped) but health care is basically one huge bureaucracy. Seeing a GP is generally a pain. You have to be registered with a surgery. Often their books are full so you can only get into the one open from 9-4 Mon-Fri. Since that's typically near where you live going to the doctor typically means taking the day off work.

The UK has long wait times for some even common medical procedures (eg certain scans) to the point they've started paying Germany and other countries to help clear the backlog.

Seeing a doctor is free though but IMHO this leads to overuse. The cliched example is of the old age pensioner seeing the doctor to have someone to talk to. Also for a procedure or seeing a specialist you'll receive a letter telling you when your appointment is sometimes 3+ months later and it might be a few days away. Can't make it? Back to the bottom of the list.

Switzerland has a system of mandatory insurances everyone must by law have various health and unemployment insurances. I don't remember the specifics but I had lime 5 policies iirc.

Actually Germany I know little about because I never used the system while there. It has a reputation for efficiency though.

The US system is IMHO the worst in the developed world (and even some developing countries put it to shame).as people have said the best insurance is negotiated at group level. Good for large companies. Bad for the self-employed, small businesses, entrepreneurs and individuals.

What's more, if you start to incur large expenses the companies are motivated to find some way to disqualify you. And then good luck as you'll have a preexisting condition. Last month a story made the national press of a veteran in cancer treatment being dropped for being 2 cents short on paying the premium.

Defendants of the current system argue free market but the result is the most expensive health care I've ever seen. Drugs, hospitals, doctors, you name it. The litigious nature of the US probably doesn't help.

Actually even Australia has the problem of litigation in certain fields. Obstetricians pay upwards of $200k a year in malpractice insurance due to a lot of frivolous litigation, forcing many out of the profession. It's a field dominated by women who more often than not end up having families at which point it is uneconomic to work part time in that field due to the insurance.

So if I ever went to work for a small start up here I'd take advantage of COBRA (iirc) for 1+ year then get insurance with a huge excess and I ever needed, say, cancer treatment I'd go back to the UK or Australia (I have dual citizenship).

Not everyone has that option.

I get the feeling many entrepreneurs are young and gambling with their health, figuring it's cheaper to declare bankruptcy pr just not figuring on unintended expenses like a motor vehicle accident.

So anyway I'm not against health insurance but group insurance is a huge problem and people need the right to get insurance. Honorifics are better insurers than for-profits (IMHO).