Ask HN: What to do about healthcare when working on a startup? | Hacker News Reader

Ask HN: What to do about healthcare when working on a startup?

29 pointsmrsmee8920 comments

I'm currently living off my savings.

What are my options as far as getting a high value healthcare plan?

To be clear I have no income as of now, not sure how that affects government subsidies.

Have you checked https://www.healthcare.gov/ (or http://www.coveredca.com/ if you're in CA)? If you're living off your savings and have little or no income, your monthly premium should be heavily subsidized.

Do this. Much of what the ACA is intended to do (we can debate its effect another day) is address low-income scenarios. Also, consider COBRA (and related state programs) as an intermediate step if available and necessary[1]. Dont' get a part-time job just for insurance...that's a distraction which will sap your energy and focus.

[1] http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html

Absolutely consider COBRA.

You have 60 days after leaving a job to enroll. (At least in California.)

Looking at Covered CA: for the same monthly cost, I would be able to get significantly better Kaiser coverage through COBRA than I would getting a plan through Covered CA.

Of course, if your goal is to minimize cost by having just an "I won't go bankrupt if I need to go to the ER" plan, the calculus is different.

Is it ethical to take a government subsidy intended for low- or no-income Americans if you have the savings to start a startup, and presumably the thought capital to be able to work for a real salary if it doesn't work out?

Think of all those folks use legal loophooles to move their millions to trust funds, so that they can get on medical, medicare, etc. Len Till, the radio lawyer from the bay area, used to give such advice!!

Yes. What do you think you paid taxes for while you were building those savings?

The Affordable Care Act is working pretty well for me as a lone wolf consultant.

Premiums for a bronze plan are about 35% less than I was paying previously (and I don't qualify for subsidies), with somewhat better coverage for prescriptions and office visits.

The selection of physicians is not great and deductibles are high, but that was true of my previous plan, too.

Lots of horrible issues with healthcare in general and the ACA in particular, but for me it's been a moderate improvement in quality along with a big reduction in cost.

This. If you've had no income for the past year, there's a very good chance you now qualify for completely free healthcare under Medicaid (Medi-Cal in California). The ACA altered the asset based qualifications for low income coverage. I believe it essentially has wiped out the asset test.

I would love to see some kind of streamlined startup system. You apply, pay a nominal fee, if accepted--you're then set up with a corporation, standard offering documents, digital captable, vested founders agreements. The government offers HC for companies with less than $1.5m funding and lifts all of the legal overhead associated with employment/compliance issues--at least for a short period of time. Starting a startup is hard, you give up a lot of your life, opportunity cost, take on a lot of risk, mess with your health, and then you have to deal with all of the legal and admin costs--it's a tax on innovation.

Just buy health care. Since you have no income you qualify for subsidies under ACA/Obamacare (but even without those subsidies the plans available are much better than the ones before the law passed).

The ACA is one of the most entrepreneur-friendly laws passed in my lifetime. Big businesses don't like it because health care is one way to retain employees, and so the lobbyists screwed it up a bit for medium businesses. But while starting, it's a lifeline.

COBRA from your previous employer is probably more expensive.

It sounds like it's not viable at this moment, but later down the line you could use a PEO (professional employment organization) for your startup. This would give you health insurance in addition to a bunch of other benefits and services.

Professional organizations (like IEEE) offer insurance plans. Another possibility are shopping clubs like Costco. I haven't used either, but include them as possibilities in case you weren't aware.

I had a health insurance expert tell me with a straight face that she recommends getting a part time job at Starbucks to her clients. Apparently they give great health benefits to part time employees.

Believe it or not I actually considered that!

You may want to consider a High Deductible Health Plan (HDHP), which generally offer lower monthly premiums for a higher deductible. This reduces your monthly cost but should something happen, would require more paid out of pocket before insurance contributes. The main benefit is a safety net in case something serious happens.

Additionally, with an HDHP you may be eligible for a Health Savings Account (HSA), which are tax advantaged savings for medical coverage, reducing your cost of care.

If you're interested in HSA's I have blogged on their benefits[1] and wrote a web app to track your HSA spending[2].

[1] http://www.hsaedge.com/ [2] http://www.trackhsa.com

Absolutely consider an HDHP. I did a ton of analysis on how much I paid in premiums versus how much was actually paid out on my insurance plan, and I discovered that in a typical year on my old "gold" plan, I paid out twice as much in premiums as the insurance company paid on my behalf. To put this in real terms, I paid $12k in premiums and I needed $6k in care. My HDHP premium is more like $1.5k, and although the idea is that I pay for everything out of pocket, I've been surprised at the amount of stuff that's been covered as "preventative". And the out-of-pocket maximum is capped on the HDHP to barely more than the amount I paid in premiums on the "gold" plan. I encourage you to run the numbers. It's really eye-opening.

It's interesting to see different people have such different experiences. For me, my wife and I both have chronic health issues, in her case more serious ones, and so HDHP makes no sense for us. I can see how for people without those issues it can make a lot of sense if you use your insurance less for chronic treatment and more for preventative care and, as you said, a safety net. On the plus side, you can generally switch from HDHP to a low deductible plan at the next plan year start date should your situation change (as ours did).

Yeah, that makes sense. The way it works out for me, even a year with astronomical healthcare costs is only going to cost me a couple thousand more because of the HDHP, and I saved nearly $8k last year due to the extremely low premiums, even after considering the out-of-pocket healthcare costs for my whole family. The way I look at it, that $8k has already paid for 2-3 hypothetical worst-case years sometime in the future.

Go without? What's the worst that can happen? You go bankrupt? Surely you've accepted that possibility already, if you're living on savings, and knowing that most startups fail.

This is horrible horrible horrible advice that may or may not have been facetious.

The main reason, in my experience, for having health insurance is that you DO NOT receive the same standard of care with it, even in emergencies.

I discovered this when I accidentally cut one of my digits nearly off, and had no health insurance. I did not receive the same standard of emergency care, even though I had the money to pay. I was scheduled for repair surgery over a week after the injury and literally needed to show the money before any procedures to save the digit because it was considered "elective" to do more than just stop the bleeding.

So if you do not have the money to pay, you might be astonished at what procedures are considered "elective" or "non-emergency."

Forget bankruptcy, insurance coverage influences quality of care, and access to care, regardless of what popular conception is.

Can't upvote your comment enough. A lot of Americans have this (utterly incorrect) idea that emergency room care is free and equal for everybody. That's only (somewhat) true when it comes to preventing you from dying right now in this hospital.

As a college student, I was studying abroad and came back on vacation. A buddy crashed our car and I went face-first through the window. I went to the nearby Alta Bates hospital in Berkeley. Maybe it was the privileged white vibe I exuded, but I was immediately attended to by three different nurses, who cleaned up the wounds and told me all about the stitches I was going to get, and how Dr. So-and-so (forget the name) was so good and he would be with me soon. Meanwhile, after stopping the bleeding, they asked me to fill out some paperwork.

After I filled it out (listing "None" as my insurer) I never saw Dr. So-and-so or even any of the nurses again. I got five packaged alcohol wet-napkins and was sent on my way. I have a bunch of permanent scar tissue inside my mouth as a result.

Still, in my case, I thought the experience was worth it to me personally as a learning experience.

But I am old enough now to know lots of people in the USA who have gone up against cancer. Some with good insurance, some with typical insurance, and some with none. The people with no insurance didn't get anywhere near the level of care that the others did.

If you are unlucky enough to contract a serious and dangerous disease, following am6110's advice above will probably increase your chances of suffering and dying prematurely, or even avoidably.

Reply on news.ycombinator.com