Anyone Else Care About Affordable Healthcare for Startups?

Of all the reasons to be pissed off about the rollout of the Affordable Care Act, the one that has me the pissed-off-est is that, so far, it doesn’t make healthcare affordable. Not for the unemployed. Not for the working poor. And affordable healthcare for startups? Not even on the radar screen.

Why should you give a flip about affordable healthcare for startups? Glad you asked.

EXPAND YOUR DEFINITION OF STARTUP

What About Affordable Healthcare for Startups?

The typical startup wellness plan.

When you hear “startup,” you might be picturing a 23-year-old with a scruffy beard, skateboarding to work barefoot and dreaming about building the next Pinterest.

But let’s expand the definition of “startup” to include anyone who starts a new business, from a new web platform to a vanilla CPA firm. And while we’re at it, let’s throw in the millions of freelancers, contractors and other independents who work outside the healthcare safety net of government, unions and larger businesses.

Now we’re talking about 17.7 million people, or 13% of all working Americans.

(If you count temps, part-timers and the semi-retired, some counts put the number as high as 42 million, or about a third of the total work force.)

And while that number certainly includes a few dreamy, pink-haired artist types, many more are men and women with college degrees and solid business credentials—not to mention families, mortgage payments and retirement plans.

This motley population has two things in common:

  1. They create the biggest share of our economy’s net job growth.
  2. They either go without health insurance, or pay out the wazoo for it.

THE REAL JOB CREATORS

Conservatives criticize tax hikes because they discourage job creators from creating jobs. I’m not saying they’re wrong.

But what discourages more job creation? Two percentage points of tax on income that’s already been earned? Or ten percentage points of health care premiums on income that may not even materialize?

(Where did I get that 10% figure? See below.)

What About Affordable Healthcare for Startups?

When she sees her premiums, she might just decide it’s not worth it.

A potential entrepreneur knows she might have some lean years at the beginning. Hell, she knows her business might fail entirely. Add to the equation the 300% premium hike she’ll endure the day she leaves her job, and she might just decide it’s not worth it.

Which is too bad, because startups, entrepreneurs and other new businesses have created virtually all the net job growth in this country over the last 30 years.

That’s right. All the big, established companies that pay for their employees’ health insurance have created zero net new jobs. But the companies too new and too small to cover their workers’ health plans have created 2 million new jobs per year since 2008.

Imagine the growth if our healthcare system weren’t stacked so heavily against them.

TEN BLEEPIN’ PERCENT

We’re a healthy family of three. My wife and I are both independent contractors. We pay out-of-pocket for health insurance that never covers anything.

That’s because it’s true health insurance. It doesn’t pay for doctor’s visits or prescriptions, any more than car insurance covers oil changes or brake replacements. But if one of us got really sick or badly hurt, the policy would—once we met our deductible—protect us from decimating our kid’s college fund.

What About Affordable Healthcare for Startups?

A subtle depiction of how I feel about my insurance premiums.

I like the policy, but the premiums are killing me. After a second consecutive 20% hike, they’re more than 10% of our annual pre-tax income. And that’s before we spend a dime on actual health care.

The Affordable Care Act was supposed to throw all of us contractors, freelancers and potential entrepreneurs into exchanges, where we would enjoy the same “pooled risk” effect that makes health insurance so much more affordable for big groups and major corporations.

It ain’t happening. If you can even get through to the website, you’re unlikely to find premiums any lower than you’re already paying. That’s why I’m pissed off.

The feds may eventually get the bugs worked out, and the Affordable Care Act may actually create affordable healthcare for startups and everyone else who needs it. But I suspect Obamacare’s too entrenched in the existing healthcare system to ever make the kind of radical difference its creators envisioned.

I wish they’d asked me, because my plan’s better. More on that next week.

Picture credits: www.impactlab.net, smallbiztrends.com, taxpremium.com
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2 thoughts on “Anyone Else Care About Affordable Healthcare for Startups?

  1. Some great points, here. I always value your insight. As I think of this, and relative to start-ups and high-tech firm creation…, I see another two points, that you might want to cover in a future blog.

    Sheesh…, like it or not, pro or against the ACA…, it doesn’t matter to the two points that follow:

    First, Have we not learned that short of guided missile systems, the government is not capable of creating world-class consumer-centric software – period. If they could, we would all be filing our taxes on a government website that was super simple…, but we don’t.

    Real software developers know that the success of any code is how well it serves the user / customer as it implements the innovation, function, operation, or purpose it is intended. Clearly, there were no users involved in the early alphas or betas (old-style software development terms) – nor were there any users exposed to rapid agile pushes of early versions. Had there been, EVERYONE would have known exactly where the software was, in terms of readiness. No surprises would have occurred, and it probably would have been fixed sooner – not to mention cheaper to the taxpayer.

    I worked at Autodesk, back during the AutoCAD Release 13 days…, that release was pivotal for Autodesk – they learned that users HAD to be involved or the software would turn into a government-style project. Release 14 was completely different – and we spent huge amounts of time on the global road involving customers to ensure when it shipped, it hit the mark because they had already been involved.

    Customers will forgive an error or two (call them bugs) if the user experience is flawless, or at least exceptional or remarkable. The roll-out of ACA missed this modern agile concept. And the dog-pile was invited.

    OK, now for the Second point. Where were Bill and Melinda Gates? For crying out loud, with all their philanthropy, and service-orientation to bring healthcare to the poor, and Bill’s incredible successful experience in software development and production-quality roll-outs… He seems to me to be the right balance between government-contractor-style IEEE software development processes (read that “archaic”) and cutting edge agile web-development…, yes, ACA needs a balance of the two, I think.

    I use Bill and Melinda as a metaphor for all of the California silicon valley and high-tech friends of the president. HOW COULD THEY let this flop occur to their president? Oracle, Microsoft, Autodesk, Groupon, Facebook, Amazon, Twitter, Google, … name the big names in software companies – they develop much more complex software than ACA is – my opinion – and turn our releases annually (and sometimes more often), that work, and satisfy customer expectations. One would think this army of supporters would have been all over ensuring this president delivered on this promise he made.

    Perhaps it’s a dream that anyone could support a president’s challenge (regardless of the side of the aisle you are on) like we did to get to the moon to meet Kennedy’s challenge.

    And, as a software guy, I think that software is less about the “code” and even less about the underlying constructs and logic – but more about the user experience and successful management (call it marketing…, if you must) …management of the roll-out. You can’t just dump a critical chunk of software on users and “hope” for the best, which is what happened here.

    OK for your future blogs, Jeff – 1) how can we get the “contractor-based” software development processes out of the IEEE-process-laden past, and into customer-focused and customer-involved agile-methods? Can start-ups help here?

    And 2) how do we get someone to step up, someone with BIG CONSUMER SOFTWARE ROLL-OUT experience to step up and manage the roll-out (positioning, messaging, training, updates, responsiveness, support, and so on) of the next roll-out of all the fixes? Another dump will look, feel and smell like another “dump.”

    …one thing we all can learn from Microsoft, it’s about marketing, not about the quality of the code. The ACA rolled out without any consideration for marketing the solution to users.

    Field of Dreams strategies rarely work. If you build it, they won’t necessarily come.

    • I didn’t even want to get started on the website — but I am furious that with 3-plus years and unlimited millions to work with, they launched such a trainwreck. Just inexcusable.

      I’m looking forward to you shooting holes through my proposed healthcare solution next week!

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