Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010) • Hacker News Board

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#31

Post by llamataboot » Sat, Aug 10, 2013, 7:38 PM UTC

j2d3 wrote: post #23

brm wrote: post #4

Yes. It's a hindrance to most life paths that don't involve full-time employment. As someone with a chronic auto-immune condition I'm effectively tethered to an employer or a spouse if I want health coverage. Should I choose pursue an art as my vocation or start a company I'd have to be willing to endure a lag in my insurance until whatever I was pursuing became successful enough that I was eligible to be covered by…

I'm in pretty much the same situation, and it's absurd and also should be obvious.

Ditto here. About to run out of COBRA, working fulltime as a freelancer, and unable to get coverage because of chronic conditions.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#32

Post by jaibot » Sat, Aug 10, 2013, 7:44 PM UTC

mjn wrote: post #11

jjoonathan wrote: post #8

Earlier quoted context omitted.

You beat me to it! (For those who don't know, the PPACA is sometimes called "Obamacare" although it should be noted that the name is more a result of political maneuvering than the result of particularly close affiliation with Obama.) I still think we should go all the way to single-payer. Other countries have had such success with this model that it's becoming very difficult to argue that it's inherently flawed (rat…

I agree it's not really a proper solution. My move from the U.S. to Denmark has been smooth when it comes to healthcare; I've been very impressed at the lack of paperwork and lack of stress over my coverage. But nonetheless I grudgingly supported PPACA, despite it seeming like a mess, because I can't see another way to solve the tied-to-employers issue that's politically feasible, at least for now.

It may become easier to reform healthcare if/when people see that PPACA doesn't Ruin Everything Forever.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#33

Post by mgkimsal » Sat, Aug 10, 2013, 7:48 PM UTC

mjn wrote: post #22

mgkimsal wrote: post #6

Earlier quoted context omitted.

was this just for yourself, or a family? $1100 seems steep - a 'high deductible' HSA plan for a single person should be < $500/month - it's currently < $350 for two of us.

When I was looking (a few years ago, in California) I had trouble finding HSA plans that included prescription-drug coverage (even with a very high deductible) for less than ~$400-500/mo. There were plans cheaper than that with no drug coverage (starting around $200), but that leaves you on the hook for unlimited liability if you end up needing an expensive prescription (and some can be very expensive). I was looking…

It seems it's a bit of a shell game...

$500/month with some prescription coverage is a guaranteed $6k/year.

$200/month without prescription coverage is a guaranteed $2400/year - $3600 savings. If you know you'll have more than $3600/year in prescription costs, then this plan doesn't necessarily make sense, but unless you know you'll have that much in costs, it doesn't matter.

I was looking for something where I self-insure the first $10k in an HSA, and then the plan covers hospitalization+drugs past that. And those exist, but not at the lowest end.

Not sure what you mean. Those are the only HD/HSA plans I see - you self insure up the first $2k/$5k/$10k, and the insurance plan covers stuff after that. Most I've seen, deductibles under $10k carry a co-insurance split between you and the insurer up to a certain amount. In our case, if we just took the $10k deductible, we'd get everything covered after our initial $10k, and that is the 'lowest' end (I'm thinking you're meaning cost - maybe you mean something else?)

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#34

Post by rdl » Sat, Aug 10, 2013, 7:51 PM UTC

riggins wrote: post #19

mgkimsal wrote: post #6

Earlier quoted context omitted.

was this just for yourself, or a family? $1100 seems steep - a 'high deductible' HSA plan for a single person should be < $500/month - it's currently < $350 for two of us.

was this just for yourself Might be NYC. I can tell you individual plans in NY run $1,500/month.

Why is NY/NYC health insurance 5-10x what it is in WA/CA?

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#35

Post by mjn » Sat, Aug 10, 2013, 7:55 PM UTC

mgkimsal wrote: post #33

mjn wrote: post #22

Earlier quoted context omitted.

When I was looking (a few years ago, in California) I had trouble finding HSA plans that included prescription-drug coverage (even with a very high deductible) for less than ~$400-500/mo. There were plans cheaper than that with no drug coverage (starting around $200), but that leaves you on the hook for unlimited liability if you end up needing an expensive prescription (and some can be very expensive). I was looking…

It seems it's a bit of a shell game... $500/month with some prescription coverage is a guaranteed $6k/year. $200/month without prescription coverage is a guaranteed $2400/year - $3600 savings. If you know you'll have more than $3600/year in prescription costs, then this plan doesn't necessarily make sense, but unless you know you'll have that much in costs, it doesn't matter. I was looking for something where I self-…

My worry is coverage of prescription drugs above $10k/yr. I'm perfectly fine paying for normal prescription drugs, but when I was looking for high-deductible insurance, all the cheaper plans explicitly said "no prescription drug coverage", even above the high deductible, which I didn't feel comfortable with. To me the idea of the high-deductible plans was that I cover regular costs in return for coverage in the event of a catastrophic illness. For example, in the unlikely event I'm diagnosed with MS and need a Copaxone prescription ($40k/yr), I can't self-insure that amount.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#36

Post by mathgladiator » Sat, Aug 10, 2013, 7:56 PM UTC

j2d3 wrote: post #26

tarikjn wrote: post #16

I am from France and moved to the US over five years ago. I have been altering between working for an employer and taking time off to work on my projects. Within the first 2 years, I realized how cumbersome it was to switch healthcare and be covered between jobs, so I signed up for a private healthcare at once. I chose to have a low general coverage but a good one for accidents, I pay $20-40 for a doctor visit, nothi…

That's great for you, obviously you have no documented chronic health conditions that would exclude you entirely from private insurance. Unfortunately for me, I do, and am considered uninsurable as am individual, leaving only employer sponsored group coverage as a viable option until next year.

The really crazy thing is how hard it is to not to eventually have a chronic health condition given the typical american diet.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#37

Post by brm » Sat, Aug 10, 2013, 8:00 PM UTC

mjn wrote: post #5

brm wrote: post #4

Yes. It's a hindrance to most life paths that don't involve full-time employment. As someone with a chronic auto-immune condition I'm effectively tethered to an employer or a spouse if I want health coverage. Should I choose pursue an art as my vocation or start a company I'd have to be willing to endure a lag in my insurance until whatever I was pursuing became successful enough that I was eligible to be covered by…

Once the PPACA exchanges phase in next year, will that ameliorate the problems in your case? They seem like they target this case specifically, essentially trying to turn each state's population into a large risk pool that anyone can buy into, rather than having risk pools be employer-tied.

It will, in theory. In the past I would have been ridered or surcharged into oblivion had I applied for individual coverage. Expanding the pool, implementing some checks on costs, and properly operating an exchange would enable coverage for my condition and prevent me from being surcharged more than 25%? when compared with typical healthy person coverage.

That said, we're in an interesting part of the law's implementation. If you live in one of the 26-33(?) states who have currently declined to operate all or part of their own exchange (exchanges in these cases will be operated by the federal government) your state also lost some of the federal funding that was intended for use in spreading awareness and helping people to "navigate" the sign-up and purchasing process of the exchange. The worry thereafter is that if not enough people enroll through the exchanges they may not have enough leverage to keep costs down.

Add to this the idea that some state governments are actively dragging their feet with the implementation of anything exchange related (enrollment starts in October and my state has next to no information out there on the process yet) and we get the potential for messiness.

In my case, I still dream of single payer.

Disclaimer: Typing off the cuff, not a health insurance administrator, etc...

*For those interested in more about how the exchanges are progressing, I find the website of the Kaiser Family Foundation to be excellent:

http://kff.org/health-reform/issue-brief/establishing-health...

http://kff.org/health-reform/state-indicator/health-insuranc...

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#38

Post by nawitus » Sat, Aug 10, 2013, 8:02 PM UTC

Matti wrote: post #28

nawitus wrote: post #20

Earlier quoted context omitted.

At least in Finland entrepreneurs are taxed less than many full-time employees. Corporations are taxed at a flat percentage (about 28% of the profits), while income taxes are progressive and up to 50%. In fact, your argument doesn't make much sense. High taxation doesn't logically imply that it's necessarily unrewarding to become an entrepreneur but rewarding to be a full-time employe. You can have high taxes for ent…

A 2010 headline from Arctic Startup read: Killing Finnish Entrepreneurship With Tax http://www.arcticstartup.com/2010/02/24/killing-finnish-entr... Skim through the comments to the article: what are the general themes that are brought up?

You can provide your own arguments.

Anyway, obviously there are people who think entrepreneurs are taxed too much in Finland. That has nothing to do with my point, though.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#39

Post by cperciva » Sat, Aug 10, 2013, 8:03 PM UTC

mjn wrote: post #29

Matti wrote: post #14

Looking at the Nordic countries you might possibly make the counterpoint that publicly funded health care implies a taxation model that makes it economically unrewarding to become an entrepreneur.

Is taxation actually higher in the Nordic countries for entrepreneurs? If you bootstrap yourself to $100k as a 1-man company in the Valley, the taxes come out to something like: $7,000 CA income tax $14,000 self-employment payroll tax $16,000 federal tax (after deducting eligible portions of the above two) ------- $37,000 (37%) In Copenhagen, it would come out to [1]: $8,000 labor-market contribution (AM-bidrag) $24,…

Interestingly, in British Columbia a self-employed individual earning $100,000 with no deductions pays:

   $6,721 BC income tax
   $4,712 CPP (government pension plan payroll tax)
  $16,844 federal income tax
  -------
  $28,278 (28%)

Sounds like Canada is the low-tax paradise so many US entrepreneurs claim to be looking for.

Re: Is Employer-Based Health Insurance A Barrier To Entrepreneurship? (2010)

#40

Post by enra » Sat, Aug 10, 2013, 8:09 PM UTC

nawitus wrote: post #20

Matti wrote: post #14

Looking at the Nordic countries you might possibly make the counterpoint that publicly funded health care implies a taxation model that makes it economically unrewarding to become an entrepreneur.

At least in Finland entrepreneurs are taxed less than many full-time employees. Corporations are taxed at a flat percentage (about 28% of the profits), while income taxes are progressive and up to 50%. In fact, your argument doesn't make much sense. High taxation doesn't logically imply that it's necessarily unrewarding to become an entrepreneur but rewarding to be a full-time employe. You can have high taxes for ent…

  > At least in Finland entrepreneurs are taxed less than many full-time employees.

It is true in high income levels that you can gain with tax planning, but I wouldn't say many are taxed less. Actually taxes/costs are pretty hurting for many starting entrepreneurs or small businesses.

If entrepreneur wants money out of the company (like for rent), she pays the taxes twice. Once as a corporation (28%) and then again as capital gains tax and/or as an income tax (+ all the costs that comes with employing yourself). Rule thumb for starting entrepreneurs that you need to make at least twice the money you want to make as an individual since taxes and costs the other half.

This is more of a case that wealthy individuals have more options and sometimes they use them and not about entrepreneurship. If you don't have a high income, you're probably paying more taxes(+costs) as entrepreneur than as an employee.