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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"
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Obamacare Could Help Fuel a Tech Start-Up Boom

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  • by Anonymous Coward on Monday September 30, 2013 @08:05PM (#44997045)

    Bachmann said Job Killing Regulations!

  • yep (Score:5, Interesting)

    by geekoid ( 135745 ) <dadinportlandNO@SPAMyahoo.com> on Monday September 30, 2013 @08:09PM (#44997067) Homepage Journal

    If th e US has a civilized Health Care system, I would start my own business much easier. Or join a start up without worrying about health care.

    • Re: (Score:3, Interesting)

      That's the problem, employers are starting to stop worrying about healthcare because, hey, the government will do it for you right?

      I pretty much didn't like this from the start but I'm no fool, I'll take advantage of any government program I can. But this one sucks. First, my employer dropped 4 of our 6 healthcare options this year because some didn't qualify (they were the super cheap options the younger sales guys usually took) and some because they would have fallen into the "Cadillac" class. So now we c

      • Re:yep (Score:5, Informative)

        by Frosty Piss ( 770223 ) * on Monday September 30, 2013 @09:57PM (#44997891)

        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...


        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, Interesting)

        by Arterion ( 941661 ) on Tuesday October 01, 2013 @08:04AM (#45000943)

        The idea of your employer being in any way connected to your health care is just vile. I am sorry to hear about your personal situation, most of the analysis I've done shows that the exchanges are competitive with employer-provided health care, and in many cases cheaper with subsidies. If it turns out at the end of the year your employer insurance over-charged, I believe they have to refund you some of your premiums. They can't just pocket the difference and call it a day anymore. This is totally new. How well it will work remains to be seen. There is also the somewhat shady option of just paying the penalty for no insurance, and if something major happens, sign up then since you can't be denied for pre-existing conditions now...

        As for the poor, the law was written so that anyone making 138% FPL or less would get Medicaid. From there up to 400% would get subsidies. But half the states aren't doing the Medicaid expansion. This is a pretty big wrench in the cogs, and it remains to be see how it plays out. The idea was to get people with no insurance out of the ER and into preventative medicine, which is much cheaper to provide. Plus the moral arguments about helping the poor and sick, etc.

        I've been saying the same thing about the Republicans. If Obamacare is so awful, why not just sit back with a smug grin and let it fail for two years, then rake up in 2016? I have this suspicion they're afraid it might actually work. If all the poor, white people that voted for them suddenly can do see a doctor and get medicine and take care of nagging ailments under the auspices of "Obamacare", that's gonna devastate them at the polls with that demographic.

        As it stands for my family, there is myself, my brother, and my nephew who I know off the top of my head could get in on the Medicaid expansion. We currently have no health insurance. My brother actually has diabetes, so he needs it pretty badly. As it stands here in Tennessee, Obama is still evil and those damn liberals, etc., since we STILL won't have coverage in 2014. But if the expansion had went in, the three of us would have Obamacare, and it would be a hard argument for any of us (or my parents) to say Obamacare is bad when we're suddenly getting medical treatment we've needed for a while.

      • by Jon_S ( 15368 )

        Are you saying that requiring coverage for contraception and keeping kids on the program until they are 26 raised the rates by 15%. I think your employer is feeding you a line of BS.

    • They/we may need medical insurance but this isn't it. Just because I'm dying of thirst in the desert doesn't mean that I am going to drink the glycol with water out of the radiator.
      The problem is the medical system itself uses corrupted, ineffective and extraordinarily cost inefficient methods favored by certain suppliers e.g. the pharmaceuticals.

      I have a family member with stage IV cancer, once considered truly hopeless. Cost at this point is normally $1-2 million and certain death, usually
    • 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.

    • Which is why the most vibrant business environment in the world is France.

      Oh wait... no it isn't.

      • 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, Informative)

          by squizzar ( 1031726 ) on Tuesday October 01, 2013 @05:06AM (#45000055)

          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...

  • 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.

  • by Anonymous Coward

    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.

  • That simply doesn't wash. While I certainly want everyone to have coverage and to get the best treatment, the fact is, BY LAW in the United States, no hospital can refuse to provide essential care. I have a friend who had breast cancer, and who went through the entire course of treatment without paying a penny. I have another who suffered kidney failure and went through years of dialysis -- without paying a dime.

    The real killer is *being*out*of*work. You're so sick, you can't work, so you have no income. Fo

    • by seebs ( 15766 )

      The problem is, if you are paying them as much as you can afford on bills that are 20x your likely annual income, you are never gonna be able to do anything else. No savings, no investment.

    • by Anonymous Coward on Monday September 30, 2013 @08:32PM (#44997303)

      I have a friend who had breast cancer, and who went through the entire course of treatment without paying a penny.
        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.

    • Wrong. Wrong. Wrong. (Score:5, Informative)

      by sirwired ( 27582 ) on Monday September 30, 2013 @08:50PM (#44997441)

      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.

  • Sounds plausible (Score:5, Insightful)

    by onyxruby ( 118189 ) <onyxruby@[ ]cast.net ['com' in gap]> 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?

  • Actually (Score:5, Interesting)

    by Ol Olsoc ( 1175323 ) on Monday September 30, 2013 @08:24PM (#44997221)
    He's right. The present system ties people to their jobs. Aside from all the hate by certain groups, there is something to be said for some of the provisions.

    If you say, have some disease, and it is cured, and you want health coverage, you are stuck in your present job with it's present health coverage. Change jobs, and ooopsies, it's a preexisting condition. So a friend of my spouse who had breast cancer, is stuck in her job. Because if it recurs, which isn't likely at this point, but possible, she is bankrupt.

    And despite all the hate, there is a lit fuse in the present system. People without health care do get treatment for their illnesses and minor issues. They go to the Emergency room. There, they get the most expensive treatment available to people - emergency room care. Before my father passed away last year, he was in the emergency room three times. And it was a little strange. Most of the people there just seemed to have minor problems, like sore throats, colds, sick kids. I'd asked about that, and the eanswer was "it's poor folk with no insurance." But rest assured that it is paid for, by your's and my premiums, and by Government.

    The problem is, as insurance costs go up, and people drop off the rolls, the emergency room will become more and more used for more and more people. A real positive feedback loop, Eventually no one except people who can pay for their medical bills out of hand will afford health insurance. Then, unless we are going to force peole to go without medical treatment, we'll have a bizzare form of universal coverage. Not a good idea at all.

    Reading the opposition plan, it is some bafflegab about doing the same thing as we are doing now, except for more bafflegab about affordability.

  • by caseih ( 160668 ) on Monday September 30, 2013 @08:37PM (#44997347)

    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.

  • by bhcompy ( 1877290 ) on Monday September 30, 2013 @08:40PM (#44997379)
    What exactly do they mean by tech startup? The 40 year old project manager for a software company that leaves to consult with an existing customer base to increase freedom/pay? Or the Elon Musk starting a new billion dollar venture? I guess they're both tech, and they're both startups, but the current industry definition of tech startup only really applies to the latter, while the age of the people being mentioned are the people that go into small time consulting after they're tired of the corporate world and realize that the company is charging the customer $200/hr while you're being paid $50/hr to render service
  • 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.

  • by erroneus ( 253617 ) on Monday September 30, 2013 @10:12PM (#44997989) Homepage

    Most people are healthy and only need to learn to stay healthy. Most are better off with a medical savings account than with medical insurance. Why give money away for someone else to make billions off of it while you get little more than weak promises that in the event something bad happens, you might get minimal care?

    We live in such a debt financing society we've all completely forgotten how to save money for bad days. Does a credit card really substitute for a savings?

    • Re: (Score:3, Informative)

      by Todd Knarr ( 15451 )

      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 hospi

      • by JayBean ( 841258 ) on Monday September 30, 2013 @11:46PM (#44998519)

        The answer to this is a MSA + a high deductible insurance plan. You use the MSA to cover smaller expenses and the insurance plan for situations like yours (which sounds like it was bad).

        The added benefit of an MSA is that it causes people to shop around a little.

        Insurance is not a bad thing by any stretch. Even that dream of single payer is really just an national insurance plan. It starts to get problematic when large numbers of people want insurance to cover smaller issues ("insurance covers birth control? I want my Viagra free!"). This leads to the costs going up on everyone.

  • 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.

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