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Obamacare Could Help Fuel a Tech Start-Up Boom 671

Posted by Unknown Lamer
from the communist-healthcare-would-have-helped-more dept.
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"
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Obamacare Could Help Fuel a Tech Start-Up Boom

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  • Exactly! (Score:5, Insightful)

    by Anonymous Coward on Monday September 30, 2013 @08:09PM (#44997069)

    One of the things the haters don't get is how big an implicit tax we pay because we don't have universal health care. Other countries pay far less per person, with far less risk. You may not be thinking about it when you're 20 something and healthy, but in a moment you can lose everything because you're not covered.

  • Sounds plausible (Score:5, Insightful)

    by onyxruby (118189) <onyxrubyNO@SPAMcomcast.net> on Monday September 30, 2013 @08:15PM (#44997127)

    I can't begin to imagine how many people I've worked with over the years that have only worked somewhere because of the health benefits. Make the health benefits no longer an issue and you gain better competition in the market for where people can work. Remove the barrier and all of a sudden a lot of places that previously would not have attracted enterprise class talent open up.

    The fact that some of these places are starts ups is largely incidental. Think of it this way, something like 40% of fortune 500 companies were started by immigrants. Why? Because they were hardworking and didn't have anything holding them back.

    I know I've turned down employment opportunities for a lack of viable health insurance for my family, I have to imagine that I'm far from the only one. What happens when people are no longer held back by this very practical concern and can go for broke like the immigrant entrepreneur?

  • Re:Really (Score:5, Insightful)

    by seebs (15766) on Monday September 30, 2013 @08:18PM (#44997151) Homepage

    Oh, sure. And we had prosperous booms without computers, too. That people succeeded without something isn't evidence that having it won't help them.

  • by Telvin_3d (855514) on Monday September 30, 2013 @08:21PM (#44997193)

    Like any other form of tax, Obamacare's net results will be negative in employment

    As a truism, that's bullshit. And it's not even entertaining bullshit.

    Let's pretend it was taken to it's logical extreme, aka a society with zero taxes. Also known as a society with no roads, no enforced laws, no food inspection, no building codes, etc. You really thing that's a better functioning society with increased employment? Now, obviously a society at the other extreme (100% taxes) is equally dysfunctional. Arguments can be made for lower taxes (and certainly better spent taxes), and arguments can be made for raising taxes in some circumstances (certainly worked in California lately), but to say lower taxes are always better is so stupid it's not even wrong.

  • Re:Exactly! (Score:5, Insightful)

    by AuMatar (183847) on Monday September 30, 2013 @08:23PM (#44997217)

    Yes it does. It requires insurance companies to accept people with pre-existing conditions (which can include mere weight), which is a major problem for anyone trying to buy individual coverage. It also provides rebates for people who make under a certain threshold, reducing costs.

    It's not perfect by a long shot, but it's better than what we had.

  • Re:Exactly! (Score:4, Insightful)

    by AuMatar (183847) on Monday September 30, 2013 @08:35PM (#44997335)

    Yup. My state exchange opens tomorrow. For the first time in 2 years, I'll have insurance (due to my weight no insurance provider was quoting me prices below 500 a month). That literally is the difference between life and death if I get seriously ill- it will be a huge weight off my shoulders.

  • by Anonymous Coward on Monday September 30, 2013 @08:48PM (#44997431)

    The article you linked to makes no mention of healthcare being a factor, but *gasp* lower taxes, lower regulatory barriers, and better access to capital.

    You may want to read things before using them to justify your position, or you end up looking silly.

  • Re:Exactly! (Score:5, Insightful)

    by MightyMartian (840721) on Monday September 30, 2013 @08:55PM (#44997463) Journal

    And if you had any sense of decency, you would feel that bankrupting people or dooming they to die because of pre-existing conditions was morally wrong.

  • Re:yep (Score:5, Insightful)

    by ebno-10db (1459097) on Monday September 30, 2013 @08:55PM (#44997465)

    I do have the impression at this point that ACA does not do enough to decouple health care financing from employment

    Hear, hear! Health care should be completely decoupled from employment. That would be pro-business, and I'm always amazed it hasn't been promoted as such. It works for Canada and many other countries.

  • Re:yep (Score:5, Insightful)

    by AuMatar (183847) on Monday September 30, 2013 @09:00PM (#44997503)

    Well, there's 48 million uninsured in America, by the latest estimates I can find. HHS finds that 129 million americans would be considered to have pre-existing conditions. With about 300 million americans, that's 43%. Assuming that those two are independent (they aren't, you're more likely not to be insured if you have a pre-existing condition) that's 21 million people who are now able to get insurance who couldn't before. As they aren't independent, it's more likely to be 30 million. So 1 in 10 to 1 in 15 people. That's a pretty dramatic positive benefit.

  • Taxes (Score:5, Insightful)

    by manu0601 (2221348) on Monday September 30, 2013 @09:13PM (#44997571)
    The level of the taxes is not really important. What is at stake is what you get for the taxes. If taxes pay for education and healthcare, businesses get educated and healthy workers. If it pays a war in Iraq, it just benefits businesses linked to defense (well.. I should say war instead of defense).
  • by j. andrew rogers (774820) on Monday September 30, 2013 @09:15PM (#44997595)

    Obamacare slightly reduces the cost of insurance for older people (like me) but then materially increases the cost for young males and in other ways in practice. Ever look at the demographics of a tech startup beyond a founder? At my startup, we pay for good insurance for our employees and while maybe my individual insurance is slightly cheaper, that is apparently buried in the noise floor of the increasing costs for the total employee pool. And the small difference in individual cost for older individuals does not materially alter the risk calculus for the individual in terms of whether they'll start a tech company.

    It would be nice to see a little honesty that the law as written will be terrible for a lot of people. Including, empirically, tech startups. The percentage increases per employee are not small at all going forward and I know a lot of tech startups that are trying figure out if and how they can bury those new costs. I'm sure there are many policies that would reduce the direct costs for startups but this wasn't it, and predictably so. Perhaps media spin artists can contrive politically palatable scenarios where it reduces some startup's cost slightly while out here in the real world there has been a substantial increase in the cost of providing health insurance at tech startups.

    Consequently, the idea that this reality will fuel a tech startup boom is some pretty strained reasoning. It may have some benefits but this won't be one of them. Obamacare might have helped some people but tech startups do not seem to be among them.

  • Re:Exactly! (Score:5, Insightful)

    by AuMatar (183847) on Monday September 30, 2013 @09:19PM (#44997611)

    You'll be paying exactly $0 for my insurance. I'll be paying for it, and I don't qualify for (or deserve to qualify for) reduced rates due to income. What this law does is force them to sell it to me, for the same rate they were quite happy to sell it to my employer at 3 years ago when I last worked for a company that provided insurance. Instead you'll be forcing them to do what insurance is supposed to do- mitigate risk of a population by spreading it between all of them, whereas before you only got that benefit if you qualified for a group plan.

  • Re:yep (Score:2, Insightful)

    by Mr. Firewall (578517) on Monday September 30, 2013 @09:21PM (#44997631) Homepage

    Precisely.

    My first thought on reading the summary: "Holy crap, is Slashdot getting paid to shill for Obama / DNC? now" Because this whole thing is not only ridiculously absurd (people afraid to start up a business because they can't afford health care -- yah r-i-i-i-i-g-h-t), it's straight out of the DNC talking points memo.

    The truth is that no one wants to start a business with the Obamacare mandates hanging over their heads.

  • by Lehk228 (705449) on Monday September 30, 2013 @09:44PM (#44997761) Journal
    By keeping workers as serfs to their and their children's medical needs the capitalists have kept wages down and mobility on their side, even during the tech boom, how much knowledge and experience was kept in billion dollar corporate hands instead of joining a startup or founding a company not due to free choice but rather the need to make sure little timmy got his braces and little Susie got her insulin pump.

    job security is already a goner, pensions are an endangered species in the private sector and the oblong box in the corner of the room keeps the people mystified and jealous of public workers who hung on to their pensions and insurance instead of being pissed that theirs were stolen to buy another private island for the CEO.
  • Re:yep (Score:4, Insightful)

    by icebike (68054) on Monday September 30, 2013 @09:44PM (#44997763)

    Meh, it wasn't that big of a deal when I left corporate employ to buy private medical insurance.
    Still have it today. I'm lumped in a category of similar size businesses for actuarial purposes.
    And I will pay more under obamacare.

    Its not the panacea you think. And its not going to be as cheap as you think.
    Forbes [forbes.com] says it will be almost $7500 per year for a family of four. Time [time.com] pretty much concurs.

    The only way this proves a boon to entrepreneurship is if they skates on the insurance (refuse to buy) and just pay the fine.
    And why wouldn't they? The fine is 1/12th of the cost of an actual insurance policy.

  • Re:yep (Score:5, Insightful)

    by PopeRatzo (965947) on Monday September 30, 2013 @09:51PM (#44997835) Homepage Journal

    Because this whole thing is not only ridiculously absurd (people afraid to start up a business because they can't afford health care -- yah r-i-i-i-i-g-h-t)

    You know that one of the top reasons people give for not quitting their job is that they need to provide health insurance for their family, right? And if they're getting health insurance from an employer they're not likely to give it up and take a chance.

    You bet being able to get reasonable insurance on your own is going to have more people quitting jobs to start a new business.

    I started a business when my daughter was 4 years old. The only reason I was able to do it was because that was when my wife went back to work and got insurance for us through her job. Now I have a business that provides insurance to my family and the families of my three employees (two full-time, one part-time).

    It's really not that hard when you think about it beyond "Goddamn Obama/DNC!". Put aside your AM radio thinking for a minute and think about how people actually live.

  • Re:Exactly! (Score:5, Insightful)

    by Anonymous Coward on Monday September 30, 2013 @09:54PM (#44997869)

    Is it right to make people buy national defense?

    Is it right to make people buy a national highway system?

    Is it right to make people buy federal inspections to ensure safe water supplies and food?

    Here's the answer... unless you are an anarchist, it is perfectly alright to make people take responsibility for themselves and not allow them to shift the cost of their health care onto the rest of the public by getting it for free from emergency room services, who then bill the rest of us with insurance to make up for it. It is perfectly reasonable to make the public participate in a program which will allow people to feel like visiting the doctor before they start an epidemic will not bankrupt them.

  • Re:What a joke... (Score:4, Insightful)

    by PPH (736903) on Monday September 30, 2013 @09:55PM (#44997877)

    The theory is: We already subsidize health care for everyone. Get sick and collapse on the sidewalk? They take you to the hospital. If you have money or insurance, you pay. If you are a homeless person with nothing, the hospital eats the cost. Well, they actually spread the expense across all the paying customers.

    Wandering in (or being carried into) an ER is an extremely inefficient way to handle most medical issues. It would be more efficient to get people into a clinic for some treatment before they become an emergency. So Obamacare is aimed at getting the above subsidy to the people at a point that would buy them better and cheaper care.

    Now, the reality is that every special interest has gotten their fingers in the legislation. So its probably rife with loopholes and opportunities for abuse. We will have to audit it carefully, plug the loopholes as they are discovered and throw some scam artists in prison to keep the program from bleeding money. It can be done, but only by people willing to work on it. Jumping up and down and whining will just play into the hands of the crooks.

  • Re:yep (Score:4, Insightful)

    by NoKaOi (1415755) on Monday September 30, 2013 @10:53PM (#44998237)

    I do have the impression at this point that ACA does not do enough to decouple health care financing from employment

    Hear, hear! Health care should be completely decoupled from employment. That would be pro-business, and I'm always amazed it hasn't been promoted as such. It works for Canada and many other countries.

    It would be pro-business, but not pro-insurance-business. The more insurance is decoupled from employment, the less they can charge for premiums and so the less money they make. The insurance industry has a big lobby, and this is the ACA is the one and only issue they are focused on. Other business have to divide their lobbying dollars between different issues.

    A major part of the ACA is that medical insurance companies must spend a certain percentage of their premiums on medical care. If they don't, they have to return it to their customers. This is to significantly reduce premiums in the long term and to make sure that those dollars are going towards actual medical care. Of course, that goes contrary to insurance companies' practices, which is to maximize premiums and minimize the percent spent on actual medical care in order to maximize profit, which is their obligation to their shareholders, evilness doesn't even enter the equation. So you can sure as hell bet insurance companies are going to be doing whatever they can politically to push back on that. You can also sure as hell bet that they'll do their best to artificially jack up premiums in the short term in order to make the ACA look bad.

  • Re:yep (Score:4, Insightful)

    by IICV (652597) on Monday September 30, 2013 @10:57PM (#44998253)

    That would be pro-business, and I'm always amazed it hasn't been promoted as such.

    It wouldn't be pro-business; it would be pro-small business and pro-new business, but it wouldn't be pro-large business at all; after all, health care is one of the levers they use to press your nose to the grindstone.

  • Re:yep (Score:4, Insightful)

    by AuMatar (183847) on Monday September 30, 2013 @11:53PM (#44998567)

    Nope, not at all. A private entity that the government does not set prices on decided to raise prices. This raise was not mandated by the ACA. A second private entity, his employer, decided not to increase his pay to cover that increase. Had there been no government exchange, his options would be to pay for the increase or not have health care. With exchanges his options are to pay for the increase, buy from the exchange which will likely be far cheaper, or not have health care.

    In fact his choices are most likely exponentially increased by the existence of exchanges, as its unlikely that his employer offered more than 2 or 3, and may have only offered 1. My state has over 40 options on the exchange.

  • Re:yep (Score:4, Insightful)

    by guises (2423402) on Monday September 30, 2013 @11:56PM (#44998591)
    It's pro-small business, but larger established companies can use it to force employee retention in poor working conditions. If you have a health problem (maybe work related?) and are dependent on your work-supplied health insurance, then you may not have the option to quit no matter what they do to you.
  • Re:yep (Score:2, Insightful)

    by Jane Q. Public (1010737) on Tuesday October 01, 2013 @12:06AM (#44998633)

    "Hear, hear! Health care should be completely decoupled from employment. That would be pro-business, and I'm always amazed it hasn't been promoted as such. It works for Canada and many other countries."

    The reason they don't do it in the U.S., is because if the employer pays for it, the cost is "hidden" from the worker.

    Yes, many people are stupid enough to believe it's "free" if it comes from the employer. Never mind that it is inherently discriminatory and unfair in other ways; that's the only way they've been able to sell it to the people (I'll probably take flak for this but I'll say mainly people on the political Left), who see this as a "free" benefit.

    Never mind the fact that it DOES come out of their paycheck, directly or indirectly. The reality is that the employee still ends up paying for it. It's just that many people refuse to acknowledge that it is the way economics actually works.

  • Re:yep (Score:5, Insightful)

    by danheskett (178529) <danheskett AT gmail DOT com> on Tuesday October 01, 2013 @01:38AM (#44999031)

    And wait patients must. A hospital survey of five countries (United States, Canada, New Zealand, United Kingdom and Australia), conducted by Robert Blendon and colleagues in Health Affairs found that “waits of six months or more for elective surgeries were reported to occur ‘very often’ or ‘often’ by 26–57 percent of executives in the four non-U.S. countries; only 1 percent of U.S. hospitals reported this. Half of all Canadian hospitals reported an average waiting time of over six months for a 65-year-old male requiring a routine hip replacement; no American hospital administrators reported waits this long. --- more [heritage.org]

    The big answer to this is: so? In America, some people will wait forever. Literally, the wait is forever. Then, for others, it's a few weeks.

    The people who never get surgery are not included in the "wait times" comparison.

  • Re:yep (Score:2, Insightful)

    by Joe Tie. (567096) on Tuesday October 01, 2013 @01:48AM (#44999067)
    I tried to move "to a real country". Even with family there, if you have an expensive medical condition nobody is thrilled to open the gates no matter how long you scream "I'm an american, don't you want my blessed culture within your borders!"
  • Re:yep (Score:4, Insightful)

    by icebike (68054) on Tuesday October 01, 2013 @02:19AM (#44999171)

    Market? Are you joking?
    With the federal government involved there is no market.
    Prices will expand to absorb all available funds.

  • by thechanklybore (1091971) on Tuesday October 01, 2013 @03:56AM (#44999705) Homepage

    All of you guys arguing about a system that makes healthcare available to those who don't have it - assume the vulnerable as it seems they are most likely to benefit - sounds like base savagery. I can't begin to imagine that you think the free market is a better fit for such a basic human requirement.

  • Re:yep (Score:4, Insightful)

    by squizzar (1031726) on Tuesday October 01, 2013 @04:57AM (#44999991)

    Might be why, despite 30% of the population smoking (2005), they live 3 years longer than people in the US (20% smokers in 2006). It's not all about money...

  • Re:yep (Score:5, Insightful)

    by mjr167 (2477430) on Tuesday October 01, 2013 @09:07AM (#45001469)

    Why should our health care be tied to our employer?

    My employer can't tell me what grocery store to shop at, why do they get to dictate my doctor?

This place just isn't big enough for all of us. We've got to find a way off this planet.

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