

Will universal health care motivate the 'job-locked' to start businesses? - edw519
http://www.post-gazette.com/pg/09196/983864-28.stm

======
CWuestefeld
It's worth remembering that the relationship between health insurance and
employment is entirely due to government meddling in the first place.

Up through the fist half of the 20th Century, medical expenses were generally
paid individually, or through mutual-aid groups such as churches or fraternal
societies. This began to change when the government instituted wage freezes.
In that environment the only way for an employer to attract superior talent
was to offer non-salary benefits, and the tax advantages of health care made
that an attractive one.

Thus, American employers began to offer health insurance as a way to better
compensate their workers when the government was trying to interfere with the
labor market. As the practice became more common, it increasingly became a
point that job hunters would look for. And the rest is history.

If you think that the results of this meddling are undesirable, then you might
think twice about giving the same meddlers the authority to muck things up
further.

Edit: here's a bit on FDR's wage freeze and its effect on health insurance:
<http://faculty.smu.edu/tmayo/health%20care%20timeline.htm>

~~~
jfoutz
Can you elaborate more? A (cursory) google search didn't really come up with
anything about US wage freezes. there was a bit about price controls for 90
days when we came off the gold standard... that doesn't seem like the kind of
problem you're describing.

fwiw, it looks like white male lifespan went up a ton in the first half of
20th century, 48 to 66, 37%! vs 66 to 74, just 12%. I'm pretty sure each 1
percent is exponentially harder than the last though.

~~~
ckinnan
The change came from wage controls during the Second World War. Ever since,
employer-provided care is paid with pre-tax dollars while most private
insurance outside of the workplace is paid with after-tax dollars. That's a
huge penalty.

[http://books.google.com/books?id=_TRBtKwBr4oC&pg=PA261&#...</a><p>It is also
illegal to buy health care insurance across state lines, so it isn't a
competitive national marketplace.<p>We need to make health care more market
oriented, not less.

------
roc
Start businesses? Probably not. That's something a minority will ever do.

But -join- small businesses? Yes.

Labor will become far more mobile and small business will be on more-equal
footing if they aren't forced to pay more for competitive benefits packages.

That's A Good Thing(tm).

~~~
dan_the_welder
Labor mobility is broken and it is a huge problem with American capitalism.

Working for a small business is great, I have enjoyed and learned at everyone
that I have worked for.

Now that I am the small business owner, my employees are my family. If I were
to behave like a corporate employer I would be a lonely man.

~~~
jobu
Until recently, Labor Mobility was helped greatly by the housing boom - anyone
could sell their house with little economic impact and move to a better job in
a different area.

Now we have the double-whammy of a housing bust and astronomical health care
costs. Cobra helps, but it only lasts 18 months, and that's definitely not
long enough to build a successful business.

------
dan_the_welder
Oh I hope so.

This is an excerpt from a blog I wrote on this exact issue. It was on Myspace
which I don't expect anyone to want to log into to so I have just copied and
pasted.

" As an immigrant to the US, it took me years to realize that many Americans
stayed in shitty jobs because they were afraid to lose their health care.

Well, it's almost 20 years later and I have had health care for about two of
them, none recently, and I still won't keep a shitty job over health care. In
fact I have owned my own business for the other 18 years and … wait for
it…..STILL DON'T have health care.

Why? Because it's a bad deal. A sucker deal, because it's not really health
care, it's insurance and insurance companies are money grubbing, fear
mongering scumbags.

I used to have affordable product liability insurance, and then they tripled
the price post 9/11, because…….terrorists were gonna, what, ummm, file
frivolous lawsuits? Please, that was the last straw.

Insurance sucks. It costs a fortune, health, auto, liability, property, it's
all a bad deal, if you self insured on most of them or just absorbed your
losses. On an actuarial basis 99 percent of people would come out ahead, vs.
paying premiums their whole lives. That one percent? Well in my world, we have
benefits and it seems to work out.

But, that's too scary if you grew up with "The Fear" that every American gets
indoctrinated with.

I'll probably die of untreated cancer which is just a guess at this point, but
the freedom I have now by not having to pay for all that insurance is worth
it.

Don't misunderstand, some I legally have to have, auto, workers comp, but the
rest I let lie. In exchange for taking this risk, I have been able to pursue
my not so lucrative dreams.

I would love to see nationalized health care, not so much for myself, but just
to see my friends be able to leave "The Fear" behind and be able to follow
their dreams.

I love America. Here's to better times. Soon."

~~~
profquail
As much as I disagree with the unbridled spending that has been going on in
Washington recently (but is just continuing a trend from the past several
administrations), I just don't see any non-selfish reasons why someone would
argue against having universal healthcare.

I mean, it's the 21st century! We were supposed to have flying cars and such
already, but there's still tens of millions of people in our country that
can't get treatment for even minor illnesses (which, untreated, can worsen and
bring on deadly complications).

The only thing that I'm afraid of in this case (other than the cost) is that
the system becomes too bureaucratic, where most people continue to use private
doctors simply because there's too much "red tape" to get treated in a public
facility.

~~~
jerf
Nobody worth listening to is saying, "Hey, I don't want that guy to have
health insurance! I want that guy to die in pain!"

It's just that when you get past the touchy-feely "Nobody should be poor!
Everybody should have health care! Why can't we all just get along‽", and down
into the real world of economics and finite resources, it's not so easy. It
isn't all that hard to create a universal health care system that is worse
than the one we have now, and there are all kinds of other issues, too.

You might get me to sign up for health-care vouchers provided from the
government if you really insist, but all current proposals seem to just _beg_
for further increasing costs as the health care industry is further isolated
from pricing signals and beg even harder for regulatory capture within five
years by the already-powerful health care lobby. (The idea that the medical
lobby will be defanged by centralizing all the power is so absurd I can't
believe anybody who can think the words "regulatory capture" can believe it
for more than five seconds without bursting out in laughter.)

~~~
profquail
Like I wrote in my reply to "DanielBMarkham" above, I've actually heard people
say that they aren't paying for someone else's health care, and that they
simply don't care what happens to people without it. That's just a personal
anecdote, but I'm sure the people who said that to me aren't the only ones out
there.

I understand the real-world economics of the problem, but I think the real
underlying issue is that many (not all, but a significant) number of Americans
have simply become too selfish over the past 100 years or so. Those people
simply aren't willing to sacrifice a little bit of their time and money to
build a stronger community, because they don't see that they have anything to
gain.

I also think that however this thing works out, it's going to become such a
bureaucratic mess that it really won't be worth anything except to the most
desperate people. The worst part is that we'll still spend the money, and
it'll all get funneled away into mega-corporations without any real
improvement in anyone's standard of living.

~~~
javanix
Unfortunately, there just isn't anything you or anyone else is going to be
able to do to combat people's "selfishness".

It may not be the way we want things to happen, but nobody is going to be able
to convince every facet of the population to give up portions (however small)
of their livelihoods to "build a stronger community" for exactly the reason
you mentioned: nobody can see that they have anything to gain.

~~~
tptacek
But because insurance works best when the risk pools are largest, and
irrational behavior among consumers (ie, spending zero in your 20s and free-
riding in your 50s) will prevent those pools from being built organically,
this seems like a perfectly sensible place for the government to apply
regulation.

~~~
javanix
Oh, I completely agree on the regulation front - health care in this country
_is_ broken right now. I'm not in agreement with the current Administration's
plans to fix it, but _something_ needs to be done.

I just think that when people start claiming that "selfishness" is the
underlying problem with our broken health care system, they're ignoring the
pressures that brought on this "moral decline".

It's really no different than the far-right nutjobs who blame the state of our
inner cities on the "laziness" of the people living there.

------
sunir
From doing a lot of customer dinners in the United States with FreshBooks
customers, the absolute top of the list with a bullet number one reason
Americans don't quit their day job and start freelancing or start a business
is lack of health insurance.

I'd bet most of our customers don't have health insurance, and that's why we
push them to professional organizations like the Freelancer's Union and AIGA.

My personal beliefs: It seems counterproductive to me to make citizens risk
their entire future just because you wanted to be innovative or fill an
unserviced need in society.

------
tptacek
Anecdotally, I can't see how it could _not_ be the case that universal
healthcare will promote startups. In '05 and '06, we routinely lost candidates
because they were married and required health insurance. If you've never tried
to buy private health coverage for a family of 4, you may be laboring under
the delusion that it's possible to actually do that.

Is there a difference between starting a company and joining a small startup?
Sure. But the same obstacle confronts any family that wants to start a
company. How could removing a huge obstacle to entrepreneurship _not_ help?

~~~
TheCondor
No question about this. It potentially can help any industry where the
healthcare costs are high in relation to other costs, this include heavy
manufacturing where there are pensions to pay. All provided the tax burden
doesn't out weigh everything else. If the collective tax rate was doubled,
then that will kill the start-up market.

~~~
tptacek
When you talk about tax rates and health insurance, it's important to keep in
mind the shadow tax paid in the common case by families and businesses that
employ them today. Privately-run health insurance is expensive, and there's an
inherent adverse selection problem because coverage is discretionary.

------
drawkbox
Healthcare needs to be an independent insurance that companies will pay you in
salary to get on your own.

Right now do companies or governments pay your auto insurance? How about home
insurance? Why health insurance? It is a tired and wrong way to do things, it
removes the cost of insurance and medical care from the paying customer and it
is the major reason there is a huge healthcare bubble in cost. We would see a
very fast cost correction in healthcare if we treated it like other insurance.

I truly believe if health insurance moves like retirement, away from the
employer, then we will have a much more agile workforce and the walls to move
around more and be more entrepreneurial will be removed.

~~~
tptacek
Your analogies are all faulty. You can avoid paying car insurance by not
driving. You can avoid paying homeowner's insurance by renting. There is
nothing you can reasonably do to ensure that you won't break your leg, lose
your appendix, or develop a lymphoma.

Meanwhile, you can't simply buy health insurance. Under our current system,
any insurer can refuse to cover you for any number of reasons, or assign
calamitously high premiums to you. The medical pretexts required to do this
are numerous and opaque. Ask any 30 year old woman who's tried to buy health
insurance if you need convincing.

Many people with families simply cannot start or join startups in this
climate, because there is no feasible way for them to cover their family.
Without health insurance, you can be bankrupted by relatively minor health
events; more importantly, you put your family at risk for receiving inferior
care, particularly on the preventative side.

~~~
dantheman
Of course if you are a risk then you should pay more. The correct answer is
for those people to rely on public charity to help with their medical bills.
What you're advocating is just forcing people to subsidize others. At least
with private charity people: 1st are thankful, and realize that others are
helping them, and 2nd are controlling how their money is spent.

Insurance shouldn't cover preventive care, it should be insurance. You don't
have car insurance that covers getting your oil changed, why should your
health insurance cover your doctor visits?

~~~
tptacek
This is incoherent. I literally don't know what you're responding to. Charity?
Subsidizing others?

It really sounds like you're arguing against the entire concept of insurance
here. The idea of managing risk by pooling it dates back to the 14th century;
if you want to argue against it, consider time travel.

As to your second graf --- again, what are you talking about? Oil changes
don't mitigate the risk of car accidents, which is why your insurance company
will give you a break for not getting tickets or driving a safer car, but
won't give you a break for changing your oil.

~~~
dantheman
>>Under our current system, any insurer can refuse to cover you for any number
of reasons, or assign calamitously high premiums to you.

If you can't afford insurance, then you rely on charity. To force lower
insurance prices than their risk demands is subsidizing them.

Yes the oil, example isn't the best. How about getting the breaks fixed.

------
thelonecabbage
If you start with 3 other co-founders, you can get the same deal (mostly) that
your employer gets.

Also HSA's and high deductible health plans are likely to cost less than
paying out for "Universal" coverage. Best yet, is that these solutions don't
suffer from a tax-drag on entrepreneur ship that the article is so concerned
with.

~~~
utnick
that works as long as your 3 co-founders are relatively healthy and have been
healthy their whole lifes, if one of them develops a problem you can expect
your premium to skyrocket into unaffordability

~~~
thelonecabbage
Group health care plans (what your employer gives you) are given largely
without consideration for the health of the individuals involved. Basic tests,
like making sure you don't have a major heart problem and pee tests are
involved but thats it. Friends of mine who have a business with only 3
employees listed me as one of their employees to get the number up to four.
Some how I was registered whilst living in another country.

And I believe there are already laws on the books about pre-existing
conditions (assuming you have continuous coverage)

------
theoneill
Doesn't seem to in Europe.

~~~
myth_drannon
The same applies to Canada. I don't think canadians are more enterprenual than
americans

~~~
cperciva
_I don't think canadians are more enterprenual than americans_

Perhaps not; but we might be even less entrepreneurial without universal
health care. I know I would never have started working on tarsnap if I was
living in the US.

~~~
r7000
I'd have been in a lot of trouble. I was very sick in my early 20s and from a
not so well-off background. The doctor that got me back on track is world-
renowned and I was able to waltz right in his office and see him for "free"
like anyone else. If I lived in (most?) states I'd probably never even think
of quitting my job.

------
yummyfajitas
An additional problem is that large numbers of people are 'job-locked' by
their need to have a regular paycheck.

I wonder if people would also be encouraged to start businesses if we came up
with a universal paycheck program.

[edit: could anyone downmodding me explain why? Just curious.]

~~~
tome
You sound a little trollish: "universal paycheck program" sounds like a thinly
veiled dig at "socialism"

(For the record: I upvoted you)

~~~
yummyfajitas
My specific point: people are "job-locked" by a desire to keep getting the
compensation that their job provides. One form of compensation is medical
insurance, another form is pay.

Is there any legitimate reason to single out medical insurance as a particular
cause of job-lock, rather than pay, corporate gym membership, etc?

