Entrepreneurship and Universal Health Care

PUBLISHED ON SEP 8, 2009 — RANT

I won’t delve into the arguments around the premise of universal health care,there are many better places to look at this and the ROI data speaks for itself and most people seem to get it. What I want to address is the benefit to a specific segment of the overall economy, chiefly increased and more successful entrepreneurship.

Startup founders are faced with enough burdens and obstacles as it is. There are big benefits if we can remove two principle ones, the fear of an insurance gap for themselves and their family, and the difficulty of providing reasonable insurance for staff during the period where every dollar put toward sustaining growth makes a substantial difference in the likely success of the company.

Anyone considering striking out on their own as an entrepreneur faces a challenge with insurance. I’ve faced it many times myself. Cobra goes some small way toward helping, but it can be tremendously expensive (and the stimulus bill is helping right now but that is temporary). For young entrepreneurs who are, or have a spouse who is, “of child-bearing age” it is particularly expensive and scary. How many inventions, products and companies have we missed out on because the potential entrepreneur didn’t want to jeopardize the well being of their family?

Once you are at a point where you can bring on staff you face this challenge again. A fat benefits package helps entice people to larger companies. Small companies and startups don’t have bargaining power to get better plans at better rates.

I would argue our current system is a major impediment to actual capitalism.

Fully 40% of high-tech workers work in small businesses. The Small Business Administration states that 60–50% of all net new jobs created annually over the last decade were in small businesses. If that surprises you at all remember the first tool at hand for a public company to raise their share price is to lay people off. Unfortunately these jobs often come with a price; little or no health insurance, and policies that are easily cancelled by the supposed insurers just when they are really needed.

Even if we can’t all stomach universal health care right now (the right thing is always resisted initially) we should be looking seriously at what an economic boost we would get from providing the kind of plans large companies can afford to entrepreneurs, small businesses and individual contractors. The best way to get that is some sort of single-payer system.

We’re already paying for it, we’re just not getting it.

TAGS: REMEMBER