
Ask HN: Bootstrapped US founders, who do you use for health insurance? - nodesocket
I&#x27;m a single founder in California, and via CoveredCA a decent health care plan (PPO) silver from Blue Of California costs $460 a month. I don&#x27;t qualify for any discounts so I have to pay full individual price.<p>So $5,520 a year for health insurance! Ridiculously expensive. I&#x27;m looking for any other options, perhaps plans geared toward small businesses with less subsidies.
======
jbarham
Do what I did six years ago: Marry an Australian and leave the US. I now pay
AU $350/month for private medical insurance for my family of five, in addition
to being able to access Australia's world-class public Medicare medical
system.

It's only when you live outside of the US that you realize it has the worst
healthcare system in the developed world (unless you're very rich, in which
case it's the best, which says a lot about the US political system).

~~~
FireBeyond
"It's only when you live outside of the US that you realize it has the worst
healthcare system in the developed world (unless you're very rich, in which
case it's the best, which says a lot about the US political system)."

As an Australian who moved to the US, this * 1000.

Yes, no healthcare is free. But a 1-1.5% increase in income taxes to pay for
healthcare is a whole world away from the US situation:

\- hospital stay in Melbourne, 9 days. Out of pocket, $36 for in room TV
rental (this was 15y ago), including take-home meds

\- kidney stone in Seattle, $8,000+ out of pocket AFTER insurance (and this
was good insurance, but admittedly more complex than average kidney stone -
surgical removal attempted, infection found, stenting, lithotripsy a week
later)

How does your average person come up with $8K to deal with a kidney stone?
Something many people might have to deal with multiple times in their life, if
not annually?

~~~
wapz
Yeah it's ridiculous. I was in the ER in California for 2.5 hours (I got IV
and a CT scan). The bill was $4600. I stayed overnight in Japan entering the
ER and got IV only and it was $41.

------
gaelenh
I run a bootstrapped non-profit in NYC with two employees (myself and my
wife). A bronze plan for my family on the NY marketplace is about $1,200+
month with an $8k-14k deductible. I was hoping to get something through
JustWorks, but since it's really just one household in our company, we can't
apply for that (requires at least 3 separate insurees).

Our combined family income makes us ineligible for subsidies, so I guess my
option is to pay $14k a year for an $8k deductible with little coverage. I
guess now all plans are HDHP, but with 3-5x the premium.

~~~
cylinder
This is why I can't be self employed. The situation is out of control. That's
the rate for the small local carriers too with poor provider networks. The
major carriers such as United go for $2,000/mo.

Don't forget the 30% coinsurance after you get past that deductible!

~~~
gaelenh
I don't understand the subsidies at all. In 2015, ACA gave people waivers (no
penalty!) if the minimum insurance was more than 8.05% of household income.
The minimum plan for a family in NYC on the NY Healthcare Exchange is
$12,500/year. Self-employed families making less than $147,000 and more than
$60,000 (I think that's where subsidies cut off) are overlooked and left
without a safety net.

~~~
sharemywin
It's like that everywhere. family plan at my work or through exchange is like
17.5k before they pay out dime one.

------
samaritan1
We use a direct medical expense sharing non-profit. Ours is called Samaritan
but there are a few of them. Basically, every month we write a check for about
$460 to another member, and the one time we had a hospital stay, we got a
bunch of checks to cover the full amount. (It covers everything but $300, but
if you negotiate the price down at all, the full amount is covered.)

That's a family plan price and we were looking at 2-3 times that with a big
out-of-pocket obligation on the Exchange. So far it's saved us about $10,000
and we really like the communal model.

(Posting under an alt account to avoid giving out too much personal info)

~~~
vyrotek
This is definitely a starting to become a popular option. I had just commented
over in another thread about it
[https://news.ycombinator.com/item?id=13356900](https://news.ycombinator.com/item?id=13356900)

It's pretty affordable and the nicest part is most of these health shares are
ACA exempt so you don't get hit by the fine of not having "normal" insurance.

Do you use a Direct Primary Health provider to cover normal doctor visits and
things? I'm a fan.

~~~
brianwawok
Are there ones not run by religion? The health sharing plans I have seen
require such things as belonging to a certain church and not drinking any
alcohol.

~~~
samaritan1
I think they're all Christian, but I don't know any that require belonging to
a specific church or totally abstaining from alcohol. I think they do all ban
smoking habitually and getting drunk, though. And they all have a broad
statement of faith and require participating in some kind of regular
church/spiritual community.

------
csdreamer7
A little off topic but I decided to look this up.

What would taxes be if we compared the US to Canada?

Using the following two tools:
[https://simpletax.ca/calculator](https://simpletax.ca/calculator)
[https://smartasset.com/taxes/california-tax-
calculator](https://smartasset.com/taxes/california-tax-calculator)

For 50k a year in British Colombia for Canada and California for the US I get
the following:

BC: $8,372 CA: $11,112

At 100k with 18k contributed to 401k/RRSP the numbers are 17.5K and 25.8k for
BC and CA.

Unless I missed typed something because it's late we Americans are getting a
raw deal. I realize Canada has VAT, but CA has very high sales taxes and I did
not include the cost of an exchange plan. What you are looking is the Income
and FICA taxes alone.

~~~
cperciva
That particular simpletax calculator is weirdly broken -- it seems to ignore
payroll taxes. (I say weirdly, because simpletax usually doesn't bungle things
like that.) Once you include CPP (Canada's version of Social Security) and
Employment Insurance (benefits for unemployed people, but not remotely
resembling insurance despite the name), someone earning $50k in BC pays just
over $10k... plus another $900/month (more if you're not single) of mandatory
tax-but-not-called-a-tax government medical premiums.

So for your hypothetical $50k/year worker, the tax burdens are pretty similar;
BC+Canada sales taxes come to 12% which I believe is a bit higher than
California's sales taxes, but of course the BC resident has government medical
coverage.

Two important caveats however:

1\. Depending on your income, BC is the lowest-tax or very close to the
lowest-tax jurisdiction in Canada. Someone earning $50k in Quebec would pay
around $13k of income taxes instead of $10k.

2\. Salaries in Canada are vastly lower than San Francisco / Silicon Valley
salaries.

~~~
csdreamer7
> That particular simpletax calculator is weirdly broken -- it seems to ignore
> payroll taxes. ... Once you include CPP (Canada's version of Social
> Security) and Employment Insurance

That is disappointing. I̶ ̶w̶i̶l̶l̶ ̶a̶m̶e̶n̶d̶ ̶m̶y̶ ̶c̶o̶m̶m̶e̶n̶t̶.̶ (Can't
amend, the above post is too old.)

> someone earning $50k in BC pays just over $10k... plus another $900/month
> (more if you're not single) of mandatory tax-but-not-called-a-tax government
> medical premiums.

$900 a month? Are you certain of that? That seems very high, unless it is paid
by the employer. Is that a fixed amount or is it dependent on income?

> 1\. Depending on your income, BC is the lowest-tax or very close to the
> lowest-tax jurisdiction in Canada. Someone earning $50k in Quebec would pay
> around $13k of income taxes instead of $10k.

I chose BC because it seemed to be having it's own tech boom in Vancouver and
has very mild weather in that area. I felt that would be relevant to alot of
people here.

~~~
cperciva
_$900 a month? Are you certain of that?_

As cbowal noted, the $900 is per year, not per month. I'd fix it above, but
apparently my comment is also too old to be corrected now...

 _I chose BC because it seemed to be having it 's own tech boom in Vancouver
and has very mild weather in that area. I felt that would be relevant to alot
of people here._

Oh, I entirely agree -- the Vancouver area is the only part of Canada I would
want to live in. (Well, maybe Victoria, but that has the same weather and tax
rates.) My point was simply that Canada's reputation for being a high-tax
jurisdiction isn't entirely undeserved when you consider that _most_ of Canada
has significantly higher taxes than BC.

------
caseysoftware
Ha, that's a deal. Prior to joining my current company, I was paying almost
$2k/month.. and that was up from $1k/month just 4 years before. :(

I'd recommend checking out your local professional associations. IEEE and ACM
have some options:

[https://www.ieee.org/membership_services/membership/discount...](https://www.ieee.org/membership_services/membership/discounts/group_insurance.html)

[https://www.acm.org/membership/insurance-
programs](https://www.acm.org/membership/insurance-programs)

~~~
changeseeker
Any one has experience with using either of these two? Can you please chime in
with the advantages of going through this vs going for individual plan?

------
toodlebunions
500/mo for silver plans is pretty standard.

If you want a better health care deal you'd need to leave the USA or maybe
become a member of congress.

------
butner
A little background: The health plan market roughly divides into individual
health plans, small group (2-50 FTEs), and group. You fall into the individual
market, at least for now, it seems.

A small group health plan isn't likely to be much less expensive, if any, and
the small business health exchange SHOP (CoveredCA, Healthcare.gov, etc), the
plans are pretty much the same individual plans.

The Affordable Care Act defined Essential Health Benefits (EHBs) which are
basically a way to ensure that common and critical types of health care are
guaranteed to be covered, along with a variety of other market making aspects
(individual mandate, pre-existing conditions, etc). Prior to this, people
could sell "health insurance" which covered few services, had strict amount
limits, and could deny claims for various unclear reasons.

If you're going to earn less than $50k in 2017, then you'll qualify for a
subsidy on your plan. If not, your options are going uninsured (potentially
getting a tax fine at the end of the year), or enrolling in an individual
market plan.

Stride Health, [https://www.stridehealth.com](https://www.stridehealth.com)
helps consumers enroll in plans through CoveredCA and Healthcare.gov, as well
as directly through the health plans. * Prices are the same you'll find
anywhere else (they're set by law). I'd encourage you to try it, and hopefully
it will take some of the headache out of it. * There's a support line with a
very knowledgable staff if you have more questions about the impact of your
income earning for the next year, or any more questions about your health care
needs. * We'll also be there to help you throughout the year, and make sure to
close the loop with your taxes the following year.

~~~
bdcravens
> potentially getting a tax fine at the end of the year

A couple of years ago a snafu caused my insurance to go unpaid. When it got
cancelled, I couldn't pay for a policy anywhere due to enrollment rules, and I
think the monthly penalty on my taxes ended up being $230 or so per month my
wife and I were uncovered.

------
stevesearer
If you don't qualify for any subsidy, you should definitely just purchase
health insurance directly through the carrier.

I initially purchased insurance via CoveredCA (no subsidy) and they just acted
as a middleman between my family and Blue Shield without providing any
benefit.

~~~
nodesocket
Thanks that's great advice. It seems there is absolutely zero discounts using
CoveredCA when you earn more than $50,000 a year.

~~~
rixrax
For CoveredCA, does anyone know if capital gains count towards $50k? Or 'just'
your ordinary income?

~~~
nshelly
Yes, looks like it includes all forms of income - capital gains, dividends,
etc. However, it is using the MAGI so you could potentially use a solo 401(k)
to defer income and get under that threshold. [http://insuremekevin.com/type-
income-counted-covered-califor...](http://insuremekevin.com/type-income-
counted-covered-california-aca-plans/)

------
ereyes01
Get a spouse who works and is gracious enough to pay for your health insurance
via his/her company plan :-)

That's how I do it, but this probably puts me in the "lucky" category...

~~~
nodesocket
Seeking spouse with good health insurance plan...

~~~
sheraz
I actually know a guy that was amicably divorced for 10+ years but remained
married on paper just so he could keep his healthcare benefits.

They have children so there was mutual interest in making sure all family
members were cared for.

------
HoyaSaxa
This is something I've been looking into for the last few weeks for my 3
person NYC based startup. All of the options through the exchanges/brokers are
laughable. If you are young and healthy, a catastrophic plan might be your
best bet. I was paying ~$125 a month for Oscar last year. Coverage only kicked
in after ~$6600, but I was just looking for something that covered me from an
IRS/penalty perspective. The premium went up ~33%, but sadly that is still my
best bet without a company plan.

We just signed up for JustWorks, a PEO, primarily because their healthcare
plans are much cheaper than going direct to brokers as a 3 person company.
They require 2 people though so if you are solo I don't think this is an
option for you.

~~~
phonon
Trinet (also a PEO) accepts a one person company. (I signed up through a
WeWork special though...don't know for sure about new enrollments.)

------
asdf333
try Kaiser permanente

cheaper and the model is more efficient. yes you give up some choice but
there's a reason it is cheaper

before you poo poo it I would give it a try with an open mind

~~~
itake
I loved Kaiser when I was in SF. they delivered an awesome service. I just
wish they were in Florida :[

~~~
homero
I too love kaiser

------
toomuchtodo
Does that include subsidies? I would assume, based on your income as a
founder, that you'd qualify for subsidies for plans on healthcare.gov. If you
don't (>$60-70k/year income), even high deductible plans are in that monthly
range you quoted (my individual high deductible marketplace plan went from
~$290/month to ~$500/month [$9000 deductible], so my wife, daughter, and I are
now on a PPO plan at $1300/month).

~~~
nodesocket
Any income greater than $50,000 a year does not qualify for any California
assistance. $50,000 a year is completely unlivable where I live in the bay
area. You have to be near poverty (bay area) to get any government assistance.

~~~
toomuchtodo
> You have to be near poverty (equivalent in bay area) to get any government
> assistance.

Assistance is for those who need it, not those who willingly choose to live in
a high COI area. It is possible to live in CA on $50k/year.

Would you pay that assistance back if you had a liquidity event? Probably not.

~~~
nodesocket
I'd prefer to not get into a political discussion, but once I get on a health
care plan, my full premiums will be subsidizing others, so where's my money
back when I don't use any of my health care benefits?

Also, you think it's fair that somebody who makes $55,000 pays the same amount
for health insurance as somebody that makes $500,000 a year?

~~~
toomuchtodo
Let's not get into politics then.

At your income level, you're not getting subsidies. You can either pay the IRS
penalty, around $2k at what I'm estimating your income at, and cash for
whatever health expenses come up, or you can seek out a religious organization
who will give you a waiver if you join their program (note: the healthcare
that can be provided through such a financial program is probably not what
you're going to prefer when the time comes for your healthcare needs to be
addressed, caveat emptor).

Another option is to move out of the country before the end of the month;
you're not required to be insured if you live outside the US at least 330
days/year.

You could also look at a cheaper bronze HDHP plan instead.

EDIT:

> Also, you think it's fair that somebody who makes $55,000 pays the same
> amount for health insurance as somebody that makes $500,000 a year?

Not at all! I'm just telling you your options. Don't like it? Quit your
startup and go into politics. Good people need to grind day and night to fix
things like this. Your fight is not with me. The situation in general sucks,
and I am genuinely sorry about your frustration with your healthcare insurance
costs.

I thought we weren't getting into politics though (re: your edit adding the
last line).

------
larrysalibra
I sponsored my own visa & moved to Hong Kong where all residents (even
temporary) are covered by almost free public health care.

------
Mz
Look into Direct Primary Care. If it is available in your area, it is an ACA
compliant option when paired with a health savings account or high deductible
coverage.

~~~
nodesocket
I'm pretty sure I have to have full insurance or I'm going to get a nice big
tax penalty at the end of year.

~~~
Mz
[http://micheleincalifornia.blogspot.com/2015/12/how-to-
fix-a...](http://micheleincalifornia.blogspot.com/2015/12/how-to-fix-americas-
financial.html)

~~~
uiri
> _My understanding is that health insurance originated in this country as a
> means to plump up employee compensation in a situation where paying more
> wages was not desirable. You could not entice good employees by offering
> them a pay raise because it bumped them up into another tax bracket and it
> just wasn 't worth it to them. But the way health insurance got handled, if
> you offered them a benefits package, it increased their quality of life
> without the punishing extra taxes._

You could not entice good employees by offering them a pay raise because _it
was illegal_ [0]

This passage also reflects a possible misunderstanding of how marginal income
tax brackets work. In no situation does bumping someone into a higher tax
bracket result in lower net pay.

[0]
[https://en.wikipedia.org/wiki/Stabilization_Act_of_1942](https://en.wikipedia.org/wiki/Stabilization_Act_of_1942)

~~~
Mz
Thanks. I am considering doing a new piece because I get a lot of flack over
details like that while people generally seem to miss the point relevant to
our lives today that DPC is a legal alternative under the ACA and a genuinely
better solution.

I am frustrated and not sure what I need to do differently to get that across
effectively.

Edit: Feel free to nitpick this version:
[http://micheleincalifornia.blogspot.com/2017/01/direct-
prima...](http://micheleincalifornia.blogspot.com/2017/01/direct-primary-care-
real-alternative.html)

Maybe I shall eventually get it right (just in time for the law to change
under Trump).

Thank you.

~~~
uiri
Sorry, I didn't mean for my comment to be taken as a criticism of the overall
piece but rather a nitpick of that particular paragraph.

I agree that separating disaster/catastrophic coverage (ie: _insurance_ ) from
routine things like doctor visits (ie: _health care_ ) is a good thing. I was
aware of HDHP and HSA for the former but I did not know about DPC until you
brought it to my attention with this comment thread.

Thank you.

~~~
Mz
It was written somewhat off the cuff and I did frame it as "as I understand
it." I was just trying to give some general historical background for why the
US has gotten to where it is currently, even though what we currently do is
incredibly broken.

I don't know why I seem to inspire this kind of reaction in people, and maybe
it isn't "me" per se, but I seem to get this a lot. And I am genuinely
interested in figuring out if it is really something I do that I can somehow
change.

Thank you for engaging me in meaty discussion.

Best.

------
nradov
On basis do you assert that $5,520 is ridiculously expensive? What price would
not be ridiculous? What makes the cited plan decent and the other lower-
premium options not decent?

~~~
corv
Healthcare in the States is ridiculously expensive to everywhere else on the
planet.

~~~
nradov
Sure but that's a separate and much more complex issue. The original question
was about a practical matter of _insurance_ , not reforming the whole US
healthcare system.

