As with all things, worth remembering who's writing this: Fred Wilson is an extremely wealthy venture capitalist. He stands to benefit a great deal from provisions like the repeal of the estate tax.
"This means that the Senate has now made the tax reform bill a win for those who work in startups instead of a loss."
Not the provision about options - "the bill."
So he's clearly saying that the bill as a whole is better for startup employees than the current system. GP point is that the bill may now be better from one single perspective but on the whole is still much worse than what we have today due to other issues.
EDIT: here’s the older story: https://news.ycombinator.com/item?id=15686442
> Here's a fun detail of the GOP tax plan: it will, according to Senate leadership, include a repeal of the ACA's individual mandate, which is the foundation on which guaranteed-issue health insurance works.
> Prior to the ACA, if you or anyone in your family had, in any previous doctor's visit, been assessed/documented as having any symptom of a very long list of disqualifying conditions, you couldn't buy individual-market insurance at any price. It was simply unavailable to you. There is no due process or meaningful appeal to these decisions, which were made mechanically and in bulk. How do I know? Because half my family --- none of whom suffers from any chronic conditions (or, really, any conditions whatsoever) turned out to be uninsurable when we started Matasano.
Repealing the individual mandate doesn't remove the requirement that insurers cannot discriminate based on pre-existing conditions.
If you want to argue about the economics and sustainability of the overall market without a mandate forcing increased participation then go right ahead, but don't make false claims about what's being included in the repeal.
Without the individual mandate, insurance companies have three options for pre-existing conditions. First, they can not insure them (which would be illegal). Second, they can raise rates for everyone who does have insurance. Third, lobby to have the pre-existing conditions section of the ACA repealed (which will now be much more palatable politically because in the mean time everyone rates will have sky-rocketed in the mean time).
Since #2 is the likely outcome in the short term if this bill passes. Startup employees who have health insurance may see a windfall in the future with the options change, but they'll lose out month after month with increased insurance costs.
But #3 would be up next, and the insurance companies will lobby hard, noting that they have been clear since day 1 that covering pre-existing conditions is only possible with an individual mandate. So long term, repealing the individual mandate and not covering pre-existing conditions look pretty much the same.
Starting with a premise that that ACA is working is invalid.
In the current US health care system about 49% of people get coverage through their employers, 19% are covered by Medicaid, 14% are covered by Medicare, 2% are covered by other by other public plans (ex: VA), and 9% are uninsured (for various reasons including not being mandated to get coverage). That leaves 7% of people that get coverage on the individual market[1].
On average, the cost to insure people in that 7% is substantially higher than the 49% receiving coverage through their employers. That's for a variety of factors including them being statistically unhealthier (unemployed people tend to be sicker) and more broadly because employer's generally provide coverage through self-insurance that removes all profits from the equation. Large employers don't just buy coverage from Anthem or Horizon, they self-insure and buy an umbrella style master coverage to cover outliers.
That leaves a small percentage of the 7% on the individual market that are not receiving any subsidies to pay a grossly outsized cost for health insurance because they're bearing the costs of the wider 7% risk pool. That's what's broken in the ACA and that's who bears the full impact of the mandate. The policy as it stands now is destined to implode as at some point that top end of the market will actively avoid it anyway.
My solution to all of this is to ban employer provided coverage entirely and require the same open access provisions for health insurance to all plans. That would widen the risk pool substantially, eliminate issues with fragmented markets, and open the door for more job mobility (health insurance wouldn't be tied to your job). Throw in Medicaid for free at the low end and a public option with which one could buy into a Medicaid-lite to add additional competition in underserved markets and you've got a working healthcare system that can be layered upon our existing one.
[1]: https://www.kff.org/other/state-indicator/total-population/?...
Regardless of that: we already know what happens when the economics of health insurance for a region become unfavorable for insurers: they simply exit the individual (and, ultimately, the small-group) marketplace. No law requires insurers to offer products on the individual and small-group marketplace, and, without the mandate, it's reasonably straightforward to predict that many/most insurers will leave those markets.
According to this Wikipedia article it's 81% of workers getting health insurance through an employer are self-insure plans[1].
There's also an inherent bias towards healthier small organizations going the self-insure route. If I'm running a small shop and intimately know all the people involved (ex: family business), I know more about our healthcare needs and risks than any insurance company could. Based on that I can self insure and keep costs down or defer to getting policies on the individual market. Rational actors who are "more sick" will do that latter.
> Regardless of that: we already know what happens when the economics of health insurance for a region become unfavorable for insurers: they simply exit the individual (and, ultimately, the small-group) marketplace. No law requires insurers to offer products on the individual and small-group marketplace, and, without the mandate, it's reasonably straightforward to predict that many/most insurers will leave those markets.
And that's what congress needs to solve. Keeping the mandate might delay the implosion but it doesn't stop it.
[1]: https://en.wikipedia.org/wiki/Self-insurance#Size_of_self-fu...
The 2017 edition of the underlying report is available at https://www.kff.org/health-costs/report/2017-employer-health... . The report states multiple times that "Sixty percent of covered workers are in a self-funded health plan." The following portion is relevant to your discussion a few comments up: "Eighty-one percent of covered workers in firms with 1,000 to 4,999 workers and 91% of covered workers in firms with 5,000 or more workers are in self-funded plans in 2017". Figures 10.1 and 10.2 show these numbers in graphical form.
From where do you draw the conclusion that the 7% individual market customers (if not 7% + 9% uninsured) are unemployed?
I can't fathom how a rational human being would think this is a good decision, so I can only conclude that it was a craven political ploy to put something obviously horrible in the bill in order to make the merely bad things look tolerable by comparison. The amount of evil in this tax bill is positively cartoon villainesque in quantity.
It is seriously gross that a tax reform bill that is by basically all accounts enormously, even proudly regressive is being sold to tech nerds with a marginal improvement in stock options accounting.
Here's a fun detail of the GOP tax plan: it will, according to Senate leadership, include a repeal of the ACA's individual mandate, which is the foundation on which guaranteed-issue health insurance works.
Prior to the ACA, if you or anyone in your family had, in any previous doctor's visit, been assessed/documented as having any symptom of a very long list of disqualifying conditions, you couldn't buy individual-market insurance at any price. It was simply unavailable to you. There is no due process or meaningful appeal to these decisions, which were made mechanically and in bulk. How do I know? Because half my family --- none of whom suffers from any chronic conditions (or, really, any conditions whatsoever) turned out to be uninsurable when we started Matasano.
If you work for some gigantic startup like Github or Airbnb, and your equity turns liquid in 2 years, here's a newsflash: the GOP tax bill is going to include a windfall for you. That probably would have been the case regardless of whether it included a new perk specifically for startup employees.
But if you're starting a company now, or if you just in general care about the rationality of our public policy and the way we finance government, you should be extraordinarily wary of anyone --- especially an investment banker, even if they happen to be wearing khakis and a zip-front sweater --- trying to sell you this new bill. Their incentives are not the same as yours.