Comment by grecy
12 days ago
> but also good health insurance.
I'm always amazed how blatantly clear it is that having health insurance tied to employment specifically discourages this kind of entrepreneurship, and the ability to "strike out on your own".
Literally handcuffs keeping people at their jobs.
It really is a detriment to entrepreneurship in the U.S., as well as early retirement for those who have saved up enough money but are locked into a job until Medicare kicks in at 65.
One other observation: During the pandemic my spouse left her job to work with me full time. We had COBRA (health insurance based on her previous plan per federal law) for 18 months, which was great. Then we had to go to the open health marketplace. What a freaking disaster that was.
If you make any sort of middle class income, which we did through my business, you don't qualify for any breaks in our state's marketplace (Massachusetts Health Connector). The broker database they had for small businesses insurance was a joke - no one ever returns your call; it seems they are looking for midsized businesses where their commission will be larger.
I spent many hours comparing family plans on the Massachusetts Health Connector and eventually decided to bypass the marketplace and purchase insurance directly from the insurance company because it was a little less expensive and had a slightly lower deductible (but was still sky-high compared to COBRA/her previous employer's plan). We got reamed on the monthly insurance cost as well as the crazy-high deductible. She eventually went back to her old employer, and one of the primary reasons was getting access to affordable health insurance without crushing OOP costs.
Alright here are three health care reforms that we could implement without going all the way to Universal Health Care:
1. Anyone who pays cash for a procedure should pay a price that is no more than the lowest price that any insurance company has negotiated for the same service.
2. Anyone who buys a health care plan from the marketplace should get a price that is no more than 10% higher than the cheapest negotiated price any company pays for the same plan.
3. Anyone should be able to deduct the cost of health care for income tax purposes, not just companies that buy health insurance for their employees.
All else being equal, I'd rather see the pricing pressure done by market competition rather than enforced price caps benchmarked against some metric controlled by the industry (see Medicare Part D - gov. negotiates hard to only reimburse xx%, drug industry says fine, we'll just raise the book price - you'll get your talking point, and we'll still get our asking price).
So more significantly:
* bring back association health plans across state lines and industries, so small businesses can band together for group rates. https://news.bloomberglaw.com/daily-labor-report/biden-admin...
* Expand Direct Primary Care. https://www.dpcare.org/
* Allow primary care physicians, dentists, etc. to offer services without a state board providing "certification of need". This seems to just be gate-keeping / moat-building.
I'm not saying either or all of these are a perfect solution (nor do I think we need to find that solution immediately). As a small business owner, they'd make the health insurance handcuff problem easier to navigate by driving costs down.
I will say this - flying solo without health insurance does make you a FAR better consumer of healthcare services. You will comparison shop (made easier by price transparency rules). You will critically consider the necessity of gratuitous tests / procedures. You will learn that doctors are running profit-minded businesses like everyone else.
It also makes you reconsider some life choices (re: physically risky behavior).
I think the biggest fear I faced was the lack of catastrophic coverage (cancer, etc.). When we didn't have insurance (both small business owners) my wife and I probably consumed less than $1000 of direct services combined, per year. That part (direct pay for services used) was fine. Walking the tightrope without a safety net for expensive medical developments was our biggest risk. With kids it's even less of an option to operate that way. I've known many that have returned to corporate jobs for this reason alone.
It’s not as easy in reality as theory.
1) Services are often unique per patient. Even for patients with the same ICD-10 codes, the quality of service will vary. Hospitals cost different amounts to run. If you always peg the price to the lowest, it will be a race to the bottom for quality of service.
2) Patients are unique, with different health profiles, with different preferences for paying. Markets are different. Some markets only have one insurance payer.
3) Healthcare is already tax deductible
Regarding #3, do you mean in the United States? That's not generally true. Your health insurance premiums, under normal employer plans, are not tax deductible, but they are paid pre-tax.
Additional out of pocket healthcare expenditure is only deductible if you itemize your deductions and you're only allowed to deduct medical expenditures in excess of 7.5% of your income (AGI to be technical).
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Or just have Medicare for everyone.
The current scheme only benefits rich people whose ability to pay outrageous insurance rates is easy and less than taxes. Poor people get substandard care, middle class workers get boned. I spend more on healthcare than taxes, and half my taxes are paying for stupid healthcare, either directly or through proxy.
Is that universal healthcare with extra steps? Almost, but on a serious note, why not go all the way with universality?
Because universal healthcare is not the best solution, as is becoming increasingly evident in Canada and the UK.
We need to fix the price gouging in the medical system by incentivizing competition. With the way things are currently set up in the US, the hospitals are essentially written a blank check any time a patient steps foot on their premises. If we bring competition between the hospitals with price transparency, the prices will fall dramatically.
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4. Go back to county hospitals. If you want to pay extra for the Cadillac plan and go private good for you. But let them compete against the county just like the 80s and prior.
Those are fair. But why impose them through regulations?
Entrepreneurs see business potential on this arbitrage opportunities.
Well, for starters, two things come to mind:
1. The healthcare and health insurance marketplace is riddled with regulation. There is no such thing as offering a health insurance plan or a healthcare service in the United States absent any regulation. Every existing service is, more or less, imposed via regulation.
2. The current health insurance system dates, in its current form, either to shortly after WWII or to the adoption of the ACA, depending on your perspective. That’s somewhere between 14 and 75 years. Where are the plans you speak of from these entrepreneurs? What are they waiting for, letting all of this sweet, sweet, arbitrage pass them by? Biding their time? Toward what end?
Yep. I’ve been saying for awhile now that universal healthcare would likely lead to one of the biggest small business booms ever. Not only does it help people strike out on their own, but makes easier/cheaper for them to hire.
Same for housing. In Tokyo median rent price for a 1BR is $600-$700. No onerous contracts either with month-to-month rental options. The freedom to explore creative and business endeavors without these worries cannot be overstated.
I'm going to be honest, I don't believe this at all. It seems like one of those things that everybody says because they want it to be true.
Ya. It sounds good. But then the question is why doesn’t every other country destroy US in entrepreneurship? Why does US still have so many small businesses?
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On the other hand, it would make it harder for big business to retain talent.
You mean they would have to offer a good job with competitive wages, enjoyable work conditions, good benefits (mat leave, paid time off, sick pay, etc.) and a good career path?
This is a feature, not a bug.
This is why big business is not an ally for anything that makes health care cheaper or easier to engage. It's a great system for them.
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People don't appreciate how expensive health insurance in the US is. A high-quality PPO plan for a whole family on the open market can cost $4k/month.
On the other hand startup culture and entrepreneurship are much more common in the US, compared with the EU. But the latter does not tie health insurance to employment, in most countries. Probably other factors are more important.
I don't think so. I think it means other factors are also very important.
I think both things are true, that we're getting a bunch of things right toward a successful entrepreneurial culture, but are also getting this one thing massively wrong and leaving a huge amount of further potential on the table!
Doesn't mean Universal Healthcare wouldn't be a net win for entrepreneurship.
We should unlock all barriers to entry that we possibly can
It's a net win for everyone except the middlemen.
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Universal Healthcare in the US will negatively impact entrepreneurship.
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What are some good examples of countries with a different healthcare policy and more entrepreneurship, small businesses, and/or craftspeople than the USA?
Taiwan has a solid national health insurance plan. The number of small and medium sized businesses is very high for a country with a working age population of 16 million people:
Taiwan boasted more than 1.59 million small and medium enterprises (SMEs), according to the White Paper on Small and Medium Enterprises in Taiwan, 2022. This accounts for more than 98 percent of all enterprises, an all-time high. Further, SMEs employed 9.2 million people, representing more than 80 percent of the total workforce.
https://www.moea.gov.tw/MNS/english/news/News.aspx?kind=6&me...
I think the official number undercounts the many micro-businesses that exist around the food industry, markets, and services.
This is highly dependent on where you live. If you're unprofitable, you can qualify for Medicaid and various state benefits. If you're profitable, there are strategies that can make nearly all health care dollars tax-deductible.
It should still cost you less to hire yourself than it'd cost a company to hire someone to compete with you, even before considering things like pass-through taxation and agency problems.
This is not an accident.
This is the whole point.