
Ask HN: If you didn't have to worry about healthcare, would you start a company? - jasongullickson
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?
======
tptacek
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
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
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.

~~~
pfedor
Do you have a source for the 50% number?

~~~
jhancock
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://www.walletpop.com/blog/2009/09/02/think-youve-got-
hea...](http://www.walletpop.com/blog/2009/09/02/think-youve-got-health-
insurance-better-double-check-and-be/)

<http://wintershaven.net/2009/08/04/recission/>

[http://www.nasdaq.com/aspx/company-news-
story.aspx?storyid=2...](http://www.nasdaq.com/aspx/company-news-
story.aspx?storyid=200906161521dowjonesdjonline000607)

------
anamax
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.

~~~
mojonixon
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
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."

~~~
qeorge
$300 for a splint is one thing. Try negotiating an MRI when you've just been
in a car accident.

Its a real problem. Insurance companies have a ton of weight by virtue of
representing many patients, which they effectively leverage for lower prices.
Those paying out of pocket have no such leverage, and pay much more.

~~~
yummyfajitas
She has negotiated for post-hoc price reductions on emergency care.

Hospitals have leeway in what they charge. If you make it clear that you will
be a pain in the ass unless they give you a good deal, they will do so. This
is where you drop words like bankruptcy, $25/month for 30 years payment plans,
and threaten to contest every single item (out of 47) on the bill. They will
take all sorts of nickel&dime charges off your bill, lower prices here and
there, etc, giving you a reasonable deal.

~~~
logicalmind
All this aggressive price negotiation is fine if that is your choice. But keep
in mind your company will have to employ other people and if the company does
not provide health insurance you will be expecting your employees to also
perform these same kinds of price negotiations for their medical services.

------
dabent
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
" 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.

------
sachinag
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.

------
KWD
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
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.

------
Tawheed
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
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.

------
ams6110
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
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
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.

~~~
tptacek
This idea (not you, mind you; just your retarded idea) is retarded. Healthcare
isn't a necessity until it is.

As a 22 year old, you are unlikely to suffer congestive heart failure. But you
also clearly have no idea what it costs to get hit by a car, to have a sudden
unexplained seizure, or a burst appendix.

The problem with health care isn't that perscriptions cost to much or that it
costs too much to see a doctor. Any of us can pay for a doctor's visit. The
problem is that a 4-night stay at hospital will bankrupt you.

~~~
docmach
This is why I'm saying that healthcare isn't a necessity. I might not need any
medical care for years, but if I needed to spend 4 nights in a hospital it
would bankrupt me. This makes not having health insurance risky, but starting
a company has its risks. I would say that most of them are probably not as
serious as this, but it's still just a risk.

~~~
nostrademons
Starting a company is as much about managing risks as embracing them. You want
to take risks with little downside and enormous upside. Not having health
insurance is a risk with enormous downside and little upside.

------
DanielBMarkham
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.

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

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

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

------
clueless123
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.

------
surfmike
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.

------
jhancock
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
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
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.

------
ryanelkins
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.

------
kgrin
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).

------
sirsean
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.

------
jacktasia
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.

------
dpcan
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
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
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...

------
SamAtt
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
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.

------
listic
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.

------
wlievens
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.

------
matt1
Could someone elaborate on the issue? How much of a problem is it?

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

------
lsc
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.

------
michael_dorfman
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.

~~~
tptacek
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
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.

~~~
tptacek
Personally, Michigan and Illinois (at the time). Companywide, add New York.

We tried to get insurance ourselves, and then worked with a family friend
broker, and failed both times. We could get coverage for three of us (although
my daughter would have exceptions in the contract), but not for my wife. I was
28 at the time.

~~~
midnightmonster
Florida. No problem to get coverage for me; we can get coverage for the boys
but with riders on my youngest sons; we can't get coverage for my wife at all.
We're 27 and 29.

We're "lucky" in that we had COBRA coverage from a Maryland job before we
moved here. Now that COBRA is expired, our MD insurer is required by MD law to
offer us a group policy. It's decent coverage, but at almost $1000/month it
only covers my wife and the kids. It would be another ~$600/month to add me.

------
harry
Yes I would.

------
pasbesoin
Yes.

------
earl
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.

