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
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:
- They create the biggest share of our economy’s net job growth.
- 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.)
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.
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