What Startups Need to Know about Obamacare

[nkoren]

Good grief. I'm from California, and in the past couple of years I've started a couple of companies. We've been successful and now have a handful of full-time employees in addition to the usual assortment of contractors. Reading through this material -- and seeing the level cost and complexity required to sort out one's healthcare situation -- makes me incredibly glad that I emigrated to London to do it.

I'm reasonably sure that Obamacare is in fact an improvement upon the status quo, but it's still an absurd level of overhead to inflict upon either individuals or businesses. It's clearly in society's interests to have a healthy populace. Everybody benefits when the "are you covered?" checklist looks like this:

1.) Are you a human being? [ ] No -- Sorry! [ ] Yes -- Great, you're covered.

And the premium/co-pay policy looks like this:

2.) Can you walk out of here under your own power? [ ] No -- Stick around and we'll see what we can do. [ ] Yes -- Excellent; now put away your wallet and scram.

Honestly the NHS has its problems, but it's saved my life at least once, and made my businesses far easier to get off the ground, and I'd never again live in a country that doesn't have something like it.

[onislandtime]

Unfortunately, this is the price we need to pay for living in a plutocracy. Healy insurance companies and brokers add no value to society. However, Obamacare is infinitely better than what we have now because it is almost impossible to get individual insurance for most people over 40 forcing them to stay at their current jobs. Perhaps this will make it easier for people over 40 to take 6 months off and start companies without having to play Russian Roulette with their families.

[psychometry]

That's great, but in case you hadn't noticed, it's practically impossible to get a U.K. work visa these days so it's not like any of us here in the U.S. can follow your lead.

[chamblin]

> 1.) Are you a human being? [ ] No -- Sorry! [ ] Yes -- Great, you're covered.

Is this actually true? Does the NHS (or any so-called universal government healthcare programs) really cover literally any human?

[Apocryphon]

Universal pet insurance seems like the sort of thing that Scandinavian nations, or Japan, could explore in the future.

[JonFish85]

I'm curious to see how this affects the startup community, especially since I'd imagine cost-wise, this affects the startup community disproportionately (20-40 year olds who fall into the "In many states, premiums are expected to increase by 15-50% for people under 40 years of age" category). Either salaries will have to rise to compensate for that, or startups will have to pay for those higher costs themselves.

[_delirium]

Depends mainly on your health history. Startup founders are generally young and male, but not all are free of preexisting conditions. For those who had elevated rates due to health histories previously, the new rates will likely be lower. For those with no negative health history, the rates will likely be higher. The new rates will be roughly a weighted average of the old ones, modulo noise. There are a number of people in both categories on HN, so it would seem to depend on the specific startup.

[xnickp]

Startups and companies with younger employees will (should) early renew in December of this year, extending their current coverage til late 2013, avoiding the price increases in the short term. For the long term, partnering with a good broker and making sure you're on the right insurance plan can wring out some savings to make up for the increases.

[vivekajayshah]

The other potential effect is that startups continue to spend the same amount of money - but purchase lower benefit levels e.g., move to $5-10K maximums from $2-3K maximums.

[guelo]

This felt more like marketing material than objective information for startups.

[anigbrowl]

It is (SimplyInsured is an insurance broker) but the objective information is short, accurate, and to the point. Discussion of the changes in health insurance markets from the ACA has been sidelined by the crisis in Syria, so some timely information is good to have even if it's from a commercial source.

[joshontheweb]

I hate the fact that I am being forced to do business with companies I don't trust (insurance companies) or face being penalized with fines.

[jbooth]

Unless you have enough liquid cash to self-insure against high medical costs, then you're just hating the fact that you can't freeload on the rest of us who pay for insurance.

[mattzito]

Also, something I don't see people talk about as much as they should (perhaps because startups are staying smaller these days), but if you have 8-10 employees or more you should be looking at a PEO.

We used Insperity/Administaff, and our healthcare rates went down by 30% and the coverage got dramatically better. Plus, they added all these adjunct benefits that big companies typically offer that few people use, but don't hurt to offer your team - free legal advice, adoption assistance, cheap LTD and life insurance (and a free life insurance policy for everyone), and so on.

They were organizationally harder to deal with than our previous payroll provider, but it was one of the better backoffice decisions we made period.

[basp]

Having analyzed Trinet plans against readily available group plans, I don't think PEOs are necessarily better in terms of health insurance, though that probably depends on how good your broker is.

[qdog]

Not mentioned: You might now be able to hire a much wider variety of people who couldn't come work for you before because of healthcare worries.

[vivekajayshah]

That is a really great point. We wanted to make it - but were trying to find a data-backed way of showing it.

Do you know of any studies/reports that show offering healthcare - results in lower hiring costs, more applicants, more qualified people, etc?

[old-gregg]

  > Will my rates go up?
  > Yes! (~40% increase)

What?! What was the point then? The cost of healthcare in US was already 5-6x of a typical EU nation, and we're looking at additional 30% increase?

WTF!

How do we stop this forced re-distribution of wealth from the general public to healthcare workers and (via government-backed loans) to Wall Street?

[akgerber]

The point (or at least one of the points) is that you cannot be permanently trapped without insurance, and thus essentially unable to access the American healthcare system, if you acquire an expensive pre-existing condition, which many people do as they age from being young, healthy people to older, unhealthy people.

Moreover, your premiums may go up, but if your income is low, those premiums will be subsidized.

Merely banning health plans from excluding those with pre-existing conditions doesn't work, as you may know if you've ever had the displeasure of purchasing insurance on the individual market in New York State.

Another 'point' of the law is to decrease the rate of increase of healthcare costs, and preliminary indicators are good: http://www.kaiserhealthnews.org/daily-reports/2013/july/30/h...

There are very few young, healthy, high-income people in the United States buying health insurance on the individual market, and, quite frankly, they're able to take care of themselves.

[pekk]

> How do we stop this forced re-distribution of wealth

Sounds like your complaint is really about taxes being somehow equivalent to Communism or Slavery.

[fennecfoxen]

That is the point!!!! Because they couldn't fly an outright government takeover, they've set up this system to be an abysmal failure, giving themselves an excuse for the outright government takeover of the healthcare system further down the line. :P

Next question?

[eksith]

When I visited that page, Avast gave me a malicious download warning:

hxxp://fekhdkxtnosb.rr.nu/jquery/get.php

Apparently what's loading isn't jQuery?

[pyrocat]

I like how this article assumes all startups are in California.

[vivekajayshah]

We don't assume all startups are in California, we just have the best dataset for CA (since that is where we operate). We look forward to showing analyses like this for other states as information becomes available.

For example - this is a great analysis by Forbes (which we linked to) http://www.forbes.com/special-report/2013/what-will-obamacar... that goes state by state.

[ck2]

Apparently every adult in the US now has to spend $4 extra a day on healthcare.

There wasn't $4 per person of waste in the system?

[humanrebar]

Alternate hypotheses: 1. There's more waste in the system now. 2. The money is paying for people that weren't being treated before. 3. The money is paying for risk that wasn't being assumed before

[tocomment]

Do the bronze plans qualify as "high deductible" plans and let customers use a health savings account?

[chris11]

This does make me curious how much the government subsidizes some of their health care plans. I'm on Tricare Young Adult right now, and switching over to an equivalent health plan would probably double my monthly premiums and add at least $6,000 in deductibles.

[basp]

For a young, healthy person, is there any reason to spend beyond the basic "bronze" plan?

[ctdonath]

I was young & healthy.

Then a doc wanted to put a pacemaker in me the next day. He was wondering why I was still alive.

The infected gall bladder and aortic flutter came with no warning too.

[nsxwolf]

You might only think you're healthy. You'll be the first to test out the claimed pre-existing conditions benefits of Obamacare.

[eli]

The deductible might be an issue for some people. If you don't have a spare $5,000 then you might choose to pay more per month to decrease the risk you have to pay that amount all at once.

Also, make sure to factor in the cost of any prescription drugs you're on.

[billybob255]

If you have hobbies that may result in injury you might upgrade.

[pbreit]

It's a pretty straightforward tradeoff: lower premiums = higher cost of care. Bronze plans are not inferior, just priced differently.

[rdl]

If an employer is paying, it's tax deductible to the company and doesn't count as income to you.

[muzz]

The graphic they used shows the Bronze plan is $122 per employee per month.

That's far, far cheaper that I had been lead to believe, from some of the articles written about the subject.

[spindritf]

I get prompted for username/pass.

> Enter username and password for http://www.kff.org

[nsxwolf]

Seems to make no mention of spouses and children.

[vivekajayshah]

Family plans are literally 2x individual plans - the maximum, deductible, and other limits are just doubled for the family.

For your spouse - you can identify her rate by entering her in as an individual (her quote is her rate).

Currently - our quoting tool: http://www.simplyinsured.com/small-group/first-quote will also let you see the prices for spouses & children on current small group health insurance plans.