Obamacare Could Help Fuel a Tech Start-Up Boom 671
dcblogs writes "The arrival of Obamacare may make it easier for some employees to quit their full-time jobs to launch tech start-ups, work as a freelance consultant, or pursue some other solo career path. Most tech start-up founders are older and need health insurance. 'The average age of people who create a tech start-up is 39, and not 20-something,' said Bruce Bachenheimer, who heads Pace University's Entrepreneurship Lab. Entrepreneurs are willing to take on risks, but health care is not a manageable risk, he said. 'There is a big difference between mortgaging your house on something you can control, and risking going bankrupt by an illness because of something you can't control,' said Bachenheimer. Donna Harris, the co-founder of the 1776 incubation platform in Washington, believes the healthcare law will encourage more start-ups. 'You have to know that there are millions of Americans who might be fantastic and highly successful entrepreneurs who are not pursuing that path because of how healthcare is structured,' said Harris"
Not for medical device startups (Score:2, Informative)
I've worked in the medical device start-up world for about 10 years now. The 2.3% tax imposed by Obamacare has really hurt. Because it's a tax on gross, not net, it makes it much harder for small companies to turn a profit. So funding has been drying up.
At least in the US. Because of the way the tax is calculated, imported products have an advantage. So funding is shifting OUS.
Re:One of the most obvious and false tropes (Score:4, Informative)
That is a load of bull. Any startup would have to have 50+ employees before being required to offer health care. And then the cost under ACA is much less. Stop spreading your misinformed lies.
Re:yep (Score:1, Informative)
Why should you have to worry about anything? Maybe the gov't should pay for your auto insurance too. That is one less thing that could interfere with you starting a business? What about your mortgage? How can someone start a business if they risk losing their house if the business fails. Maybe the gov't should just provide us all housing too. Why should we even have to worry about earning a salary. Can't the gov't just give us all free money?
Re:yep (Score:1, Informative)
OMG, holy cow and all that. Speaking as someone who has started and sold a couple of small businesses, I can promise you that Obamacare will NOT make it easier. There is even a tax for every employee, whether you have health insurance or not. Sorry to burst your bubble (and no matter how you feel about Obamacare in general) but more regulations do NOT make it easier to start a business, no matter what kind of regulations they are.
Re:The Real Problem Isn't Health Coverage (Score:4, Informative)
I have a friend who had breast cancer, and who went through the entire course of treatment without paying a penny.
AND
I have another who suffered kidney failure and went through years of dialysis -- without paying a dime.
you are lying. Stop it. That not how it works. They only have to be sure you aren't dying right at that moment.
" provide essential care."
Incorrect, emergency care not essential care.
" If they take you to court, you can tell the judge: I was out of work for a year, I can afford to pay them $25 a month and that's it. The judge will almost always agree."
This is why hospitals have started selling their debt to 3rd parties. These 3rd parties can claim more, sue you, destroy your credit, garnish you wages.
"I've been in court and have watched it happen.
since everything else you say is factually wrong, I'm not going t believe this either.
I am a Former ER billing specialist, Now ER nurse.
Had this freedom in Canada for a long time (Score:5, Informative)
Healthcare is one major reason I decided to move back to Canada and work in a self employed situation. Here people can work two part time jobs if they want, or start a business and not worry about having to buy into basic health care plans. Many companies do offer supplementary insurance though. Even our own family company is thinking of doing that.
Obviously freedom means different things to different people. Guess at least half the republican party sees things differently.
Re:yep (Score:0, Informative)
that's odd, because my brother is self employed. Due to ACA, he is now going to be marked a criminal because though he used to have health insurance, he can no longer afford it, and as such, has had to drop his coverage.
Wrong. Wrong. Wrong. (Score:5, Informative)
Read the laws again. The law merely requires facilities that accept Medicare and provide emergency care to provide "stabilizing" treatment to emergency conditions without regard to ability to pay. Once you are stable, it is perfectly legal to toss you out the door. Your friend likely found a facility that was willing to cover her cancer under their charitable care program (some level of unpaid care is required in most states for non-profit hospitals.) If your friend had needed a transplant, she would have discovered the limits of that care. (People routinely die due to inability to get transplants covered; they are just too expensive for most hospitals to write off.) Dialysis is ALWAYS covered by Medicare as soon as four months elapse, no matter your age. But you need to find somebody to cover those four months, unless you want to head to the ER every time you crash. This is by no means guaranteed. You most certainly can be refused "essential" care, as long as you are not in danger of dying right there in the lobby. (As in, they'll treat you if you are about to fall into a diabetic coma, but aren't at all required to provide you with a monitor and strips (much less insulin) long-term to keep it from happening again.)
Next, there is no law saying that hospitals (or anybody) cannot collect on debt as long as you are making minimal payments. They can pursue debt collection equal to the efforts of any other unsecured creditor. And yes, if you show up and offer up what you can, the judge may take you up on your payment plan... but that's not set in stone and varies widely by state.
And yes, being out of work drives people to bankruptcy, but so do unaffordable co-pays and deductibles, policies with horrible annual limits, policies with limited coverage, unaffordable drugs, sudden catastrophe without insurance (it doesn't take much), etc. The paths to medical bankruptcy are many.
Because they'll actually be able to buy coverage (Score:4, Informative)
If you have a "serious" pre-existing condition (and the criteria for what that means is VERY broad), absent Obamacare, it's VERY difficult (and in many cases impossible) to obtain insurance. And what insurance is available is often utterly unaffordable and or horrible. (Any pre-existing condition you have will usually be outright excluded, along with childbirth.)
With Obamacare, those in excellent health will indeed pay more for coverage, but those in anything less than excellent health will now be able to obtain usable insurance outside of an employer group plan.
Re:yep (Score:5, Informative)
Most Silicon Valley startups offer healthcare.........if they don't, they are horrifically underfunded and you should avoid them.
It takes time to obtain funding. The article is talking about the people who take a risk and actually launch startups, and their health insurance during the time that they are pitching their ideas to investors to obtain the funding to offer insurance to new employees, not people like you, who only join after the funding is secured.
Comment removed (Score:3, Informative)
Re:yep (Score:4, Informative)
I suggest you look on the exchanges to see if you can get a better rate. In MD the cost depends on the plan you choose, but will be between $100 and $300 a month for an individual. With you, your wife, and one kid it can't be more than 3 times that. Rates in your state may differ, but you may be able to get coverage cheaper by not going through your employer.
Re:yep (Score:5, Informative)
Basically you are telling us your employer sucks and really doesn't care about their employees.
Say what you will about Starbucks and their burnt coffee, but here's what Howard Shultz had to say about the subject:
Starbucks wonâ(TM)t use the new law as an excuse to cut benefits or lower benefits for its workers...
http://seattletimes.com/html/localnews/2021922111_westneat29xml.html
Apparently, cutting your employee's health insurance is so low Starbucks will not stoop to it. But there are plenty who will, and it is the sign of a shitty employer.
Re:yep (Score:5, Informative)
Some citations for my numbers:
http://aspe.hhs.gov/health/reports/2012/pre-existing/ [hhs.gov]
http://www.familiesusa.org/resources/publications/reports/health-reform/pre-ex-conditions-findings.html [familiesusa.org]
Notice that the non-government site posits a much higher number. I have more faith in the HHS numbers though.
Census data for the uninsured numbers: http://www.census.gov/newsroom/releases/archives/income_wealth/cb13-165.html [census.gov]
Logic. If they won't sell it to you if you have a pre-existing condition, then you're more likely to have a pre-existing condition if you don't have insurance than if you do. This is a direct result of Bayes theorem. Look into conditional probability.
Yup, that's a real impartial source there. ROFL. Actual studies, government or by a respected university (public or private) or STFU.
Also, use numbers that aren't most of a decade old and from before the worst financial crisis of the last 60 years.
Mostly because people didn't know about it at first- it wasn't well marketed. But FYI, the Maryland plan was sold out for the year months ago. I tried applying for it and was put on the waiting list. And told not to expect to get it this year (I haven't).
Not a single person will lose insurance due to this law. Blatant fearmongering.
Re:Unmitigated bullshit (Score:5, Informative)
Reagan and Bush both proved that taxes are already too high. They both lowered taxes and the result was an increase in funding to the government.
Only in your imagination. The only time the deficit has gone down (in fact completely eliminated) was during the high tax years of Clinton. The economy did great and unemployment went to a record low.
Enough with this BS (Score:4, Informative)
My HSA is still tax free. 1099s are mostly a tax dodge, taking advantage of desperate people or both. Companies hire 1099s for what's really full time continuous work and call them 'contractors'. The taxes are lower because you're not hiring an employee you're paying for work. The reason you can't get a 1099 is the gov't is cracking down on that. It's only good for you in the short run. In the long run they'll cut your wages and benefits while underfunding the safety net you'll need sooner or later.
Re:Absolutely ridiculous (Score:3, Informative)
Because if something major does happen, an MSA won't cover it. I had a bout of pneumonia. That cost me 5 weeks in the critical-care unit in an induced coma, a month of inpatient rehab, another 6 months of outpatient physical therapy, plus a year of IV therapy to fix the immune-related problem triggered by something (they're still not sure what) during my stay in the CCU (which still hasn't completely resolved the problems, but they're down to the point where the pain can be managed by medication). The hospital bill alone came to $350K, the IV therapy came to in excess of a hundred grand, plus another fifty grand or so for the physical therapy. All told over half a mil, and that's at the rates the insurance companies pay. Without the insurance contracts, the rates would've been at least twice that. Now, how many people do you know of who can afford to put half a million dollars in a savings account?
And you seem to be under the impression that insurance acts like a savings account. It isn't. Insurance coverage is supposed to be a risk pool. You don't pay into it to withdraw what you paid in. You pay in to insure that if that massive bill hits that it's paid for. That's why insurance rates were never traditionally calculated based on individual risk. They were calculated by taking the total risk for the whole pool and dividing it by the number of people in the pool. So if you had a thousand people and one of them would get hit with that half-million-dollar bill every year, you charged everybody a $500/year premium. Each year the pool gets enough in premiums to cover the pay-outs, and each person gets a payment they can afford and the security of not having to gamble on the outcome.
Re:Enough with this BS (Score:4, Informative)
Not a dodge...there are PLENTY of folks out there, working contracting, for real. You have to dot your i's and cross your t's to make sure the IRS doesn't reclassify you.
I personally LOVED this method of work. I paid my taxes, but was able to save money, and write off a ton of stuff. Frankly, I find it is about the best way to actually keep a much of your hard earned dollars as you can. Most of my work with as sub to subs for Federal contracts, very lucrative and definitely can be pretty long term (5 year at a time, then, switch to new prime).
It isn't a dodge, it is a way to keep the money you earn, and legitimate if you play by the rules. If you don't, the IRS will bite you hard on the ass.
I don't mind negotiating my bill rate, I know my numbers....I plan enough for 4x weeks a year for vacation/sick time. I put money back into HSA pre-tax, for my routine medical needs. I put money away for retirement.
I don't understand why they seem to try to make this harder for those that ARE responsible enough to guide their own future.
Anyway...I'm actually kinda hoping Obamacare does entice all businesses to allow more 1099 contracting, just have to make sure it is corp-to-corp to help shield somewhat from being reclassified which costs everyone money.
Re:yep (Score:5, Informative)
Yup, because that raise in premiums was really the effect of the ACA. Newsflash: health insurance premiums rose an average of 13% every year from 1999-2009. Source: http://ehbs.kff.org/pdf/2009/7937.pdf [kff.org]
Also out of pocket costs were increasing 5% a year on top of that. Source: http://www.reuters.com/article/idUSTRE62O1DJ20100325 [reuters.com]
So yeah, I HIGHLY doubt that the ACA caused even a penny of that increase. If it did, it was because some exec there said "Hey, we can claim the ACA is causing us to raise rates and raise them even more than usual."
Re:Unmitigated bullshit (Score:4, Informative)
Reagan and Bush both proved that taxes are already too high. They both lowered taxes and the result was an increase in funding to the government.
Only in your imagination.
No, the original comment was correct. Federal revenue did go up [heritage.org]... but spending went up even more.
The only time the deficit has gone down (in fact completely eliminated) was during the high tax years of Clinton. The economy did great and unemployment went to a record low.
Don't forget that those were also the years when the GOP took over Congress and restrained spending, a little bit, for a little while.
Re:yep (Score:5, Informative)
Oh, and they get between 5 and 9.5 weeks holiday, lot's of employment rights and protections and tasty cheese. The last time I saw an American commenting on France's productivity and employment laws it was the head of a tyre company - I think the French pointed out that Michelin is 20 times larger and 35 times more profitable than the US company. Also if you think the French are more concerned about money than quality of life then you have no idea what they are about. At least remember to thank them for scaring the British out...