After getting yet another email a few weeks back from a reader, suggesting a post on health insurance for freelancers, figured it was time. I know this is a hot button issue for any commercial freelancer, often looming as one of the key issues giving salaried employees/aspiring commercial writers pause when considering the leap to self-employment.
If you’re single and in good health (like I am on both counts), health insurance really shouldn’t hold you back from the commercial freelancing life – psychologically or logistically. As I see it, there are far bigger boogeymen (usually imaginary if you’ve planned well) facing free agents like us. Will I go broke? Will I lose my house? Will I be reduced to standing on a corner with a “Will Write Copy for Food” sign? Nonetheless, it’s still one more thing to consider.
Since 1997, I’ve used Kaiser Permanente. I rarely step foot in the place (but you’re paying for peace of mind), but over the years, have been pretty impressed with their offering, services and thoroughness.
I’m not crazy about the fact that, like clockwork, my premiums go up every year by roughly 15+ percent, but all in all, I still pay a not-unreasonable $325 a month. Co-pays for doctor visits are $30, and a surprising number of other services are covered or subject to co-pays (as opposed to coming out of pocket to satisfy your deductible).
Women will typically pay more for health insurance than men of the same age, but depending on the plan, and the deductible and co-insurance level chosen, a single person of either gender can generally find a manageable plan out there.
And with some of the new clauses of the healthcare bill, you’ve got more protections than may have been the case in the past. And do NOT try to drag me into a debate on THAT issue; ain’t gonna happen. I will ignore you and delete your comments. No hablo ingles…;)
For those pondering going without – a temptation for singles in good health and feeling bullet-proof, I wouldn’t even consider it. Not worth it. One accident or illness and you’re in deep doo-doo.
And yes, if you have a family, it’s going to cost a good bit more. Not every freelance commercial copywriter has a gainfully employed and benefits-laden spouse to cover that base. But a quick look at Kaiser’s plans turned up plans in the range of $600-800+/month for a family of four, depending on options chosen (don’t take these figures to the bank; that’s Georgia. Your mileage may vary, etc, etc.).
Not great news, but not necessarily a deal-killer, either. Remember, stay in a job you hate, just for the bennies, and your health will likely suffer. Sort of defeats the purpose.
For the uninitiated, here’s a basic overview of an HMO. As a member of Kaiser, getting insurance on my own, I’m put in with a certain group of subscribers. I have no choice in the matter – that’s the nature of the HMO model – and I don’t know who they are (i.e., we don’t catch up for coffee…).
The nice thing about the HMO group model is that individual consumption of services doesn’t directly affect one’s rates. That’s good news and bad news. Good news: if you use a lot of services in a given year, you won’t be singled out for a skyrocketing rate increase. Bad news: even if you don’t use it at all, your rates will still go up every year.
A few resources:
For more information on health insurance (as well as life and disability insurance), click here.
To find a health insurance agent in your area, click here.
For insurance plans for creative folk, click here.
Assuming you don’t have a spouse with benefits, what do you do for health insurance?
If you have a family and had to get insurance on your own, how did you go about finding the best deal?
Any good health insurance resources you’ve come across for the self-employed?
Any strategies you’ve employed to get the most from your health care dollars?
Well, this is one that hits close to home. After 30+ years in health insurance (working for insurance carriers, benefits consulting firms & brokerages), I left Corporate America to freelance as a business writer. I still have an active agent’s license in ID, CA & AZ.
From the standpoint of insurance, I unfortunately live in a state (ID-moved after 20+ years in CA) with few health insurance options. It’s basically Blue Cross or the highway. I am also a baby boomer-duh, as if you couldn’t tell from all the decades I’ve noted here. 🙂
Agree 110% about the need for insurance. You are NOT invincible, no matter what you might think. One skiing or automobile accident and you have major $$
I have a Health Savings Account (HSA) with a high $2,000 deductible, which brings the premium down. Certain preventive services are covered at 100% (like mammograms). You can supplement a high deductible plan with supplemental plans, like the duck-sponsored Aflac to cover hospital costs, accidents, etc. to defray the cost of that high deductible. If you can add to that HSA savings, you choose to use it for a claim or have it roll over year after year and have it for retirement (which may happen when I’m 80). HSAs are particularly good if you are healthy.
🙂
There are still a lot of regional differences and the inherent complexities of health insurance makes it difficult to give a simple response. Some associations and unions have health coverage.
IF the provisions of the health reform law stay in place (and I won’t get into THAT debate either), the state insurance exchanges do not go into effect until 2014. So don’t wait on that.
When I 1st looked at healthcare.gov website, it was horrible. It appears they have more state-specific plan information, but I haven’t studied it since the initial look.
Finally, I am an avid believer that we have to start managing health and not disease (which is what insurance does). So, work on your health and get your preventive visits. It is far less costly to take blood pressure medication than it is to pay for a stroke or heart attack.
Didn’t mean to monopolize or preach here, Peter. Thanks for taking up the cause.
Here’s something I learned about health insurance over 20 years ago: https://chl-tx.com/2009/09/how-to-get-the-best-deal-on-health-care/
I also have an HSA. The deductible is relatively high, but if you’re generally healthy with no scary family medical history you can do quite well by going this route. I enjoy a lower premium than I might otherwise be able to get, and as a freelancer I like being able to take every tax advantage available to me.
How deep is the doo-doo with no insurance? Unless you have been in a hospital or have seen the bills of a relative, sit down and prepared to be shocked. In late Jan. I fractured my right ankle sliding into 2nd base at SF Giants fantasy baseball camp. An ambulance took me to an ER, and I spent two nights in a hospital after pins and plate surgery. Couple weeks later the hospital sent me an information-only statement, i.e. not a bill. (This wanna be player is covered by Medicare plus a supplement to cover the other 20%.) $33,000.+ I cannot put weight on it for at least 6 weeks plus rehab and physical therapy. How would you manage what is actually a very common injury?
I freelanced full-time from 2004 until mid-2010. The whole time I carried a policy for my family, first from Blue Cross and later with Aetna (I purchased it through Sam’s Club, saving me a good bit at first). But with both companies, the rate just climbed up and up, and the coverages were abysmal. When the recession hit Michigan in 2008, and my income took a big dip, the health premium still stayed at the dear price of $700 and it was just one of several crippling factors that ultimately led me to leave full-time freelancing. Our coverage was so poor that our family health decisions were often based on cost, rather than what we truly needed.
Last year I took a job writing grants with a large university and I have ridiculously good health insurance — low premiums and I end paying $1.38 for prescriptions. I can also get a Master’s Degree for free, and my kids won’t have to pay college tuition either. You have to love benefits.
My advice for would-be freelancers has changed based on my experience. I think if you are leaving a $70K, full benefits job, you will probably need to pull in about $150,000 or so in freelance money to make it worthwhile. On the other hand, if you leave the $70K job and manage to make $90K as a freelancer, I honestly think you’re still losing ground when you factor in your health costs, the retirement savings you need to be putting away, the tax bite of self-employment, and the lack of paid vacation/holidays/other benefits. In other words, don’t leave that stable job unless you really have solid clients and/or an overpowering business plan in place.
Rick Middleton
If you’re single and in reasonably good health, you can get a high-deductible ($5000-10,000) plan for under $200 a month. I’ve lived in Colorado, and I’m currently working on a long-term project in Hawaii, and I’ve found plans for ~$150/month in both places. (Currently Kaiser- like Peter)
But then, I’m one of those people who would pretty much rather live under a tarp tied to a tree than wake up in the morning with “Employee” written on my forehead. 😉
Dennis — $33,000 for a fractured ankle? Come on… you’re getting screwed. That cannot possibly be an honest “statement.” Can you say “Medicare fraud”? Hey, I’m just sayin’. And no, I’m not a lawyer, but… come on… What on Earth are those charges for?
Laurie — Yes, I suppose a five- or ten-thousand dollar deductible is “manageable” for the typical “successful” freelancer. I have to wonder, though… You make it sound so easy. Do you have *any* idea what it feels like to lay out that kind of money for… anything?
I’m not sure why anyone would be surprised at a $33,000 bill from the ER.
Same–that seemed low to me. Of course, I have been in the ER, in the hosp, and so has my mother (I manage her money). I have Medicare HMO now–dropped the supplement after 2 yrs. I still forgo things because even the HMO does not cover them. I am my own Death Panel! LOL. My daughter, 28, unemployed for 2 yrs, got MRSA, was treated at the ER, went back for followups, etc. They got her right on Medicaid so they could get paid. None of this is about improving care, it’s about paying someone. Now our state wants to abolish Medicaid–and others say the same. This whole thing is coming apart. There are hate Kaiser sites–everything has a dark side.
To Michael: Your speculation that the bill is an example of Medicare fraud may be based on not enough information. (That’s the polite way to put it.) This is how Medicare defines fraud: “Fraud occurs when someone intentionally falsifies information or deceives Medicare. Abuse occurs when doctors or suppliers don’t follow good medical practices, resulting in unnecessary costs to Medicare, improper payment, or services that aren’t medically necessary.”
How would you, or any outsider to the system, know what a broken ankle “should cost”?
To Rick: This is not the ER charges, but the total HOSPITAL bill. (No MDs included. They bill separately.)
Details in round numbers (for 48 hours)
Private room: 2400.
Pharmacy 500.
Pharmacy IV 500.
Non-Sterile Supply 100.
Sterile Supply 1300.
Other Implants (The plate, pins and screws?) 4800.
Chemistry 500.
Immunology 390.
Hematology 350.
Radiology, Diagnostic (Yep, his ankle is broken in two places all right.) 2800.
Chest X-ray 500.
Operating Room Services 11,300.
Anesthesia 1600.
Physical Therapy 600.
Occupational Therapy 500.
Emergency Dept. 2100.
Pulmonary Function (A little plastic tube device to blow into; keep my lungs clear) 98.
Drugs/Detail Code 1254.
Self-Admin Drugs (My daily thyroid supplement 2x?) 98.
Recovery Room 1200.
EKG/ECG 282.
Thanks all, for your comments. Great resources here – thanks for sharing them.
AND (I’m smiling as I type this), let’s not get the conversation TOO far off-topic with a discussion of the the emergency-room bill, which while outrageous (I agree with you there, Michael), doesn’t particularly surprise me).
I think we can all agree that not having insurance can spawn some pretty awful financial nightmare scenarios, as Dennis’s example graphically illustrates (more evidence of a broken healthcare system – something I think we can all agree on, no matter what our other positons are on the subject; and that’s ALL I’m going to say about that…:)
So, let’s hear from some more folks about your strategies for getting health insurance on your own!
PB
Agreed, Peter. And there’s plenty of potential spec work there for magazine article writers.
When you do get health insurance on your own, self-employed business owners get a tax break for their insurance premiums and THOSE OF THEIR DEPENDENTS. Pre-age 65, when I was still paying ever-more-exorbitant quarterly premiums to Blue Shield of CA, my wife listed on her business income and expenses (on Schedule C) “self-employed health insurance premiums” for herself, me and each of our two minor children. (We each had an individual policy. She has mild MS and my son and I both took meds for ADHD. We were spending around $16K per year in premiums.) At first, the deduction from income was 50 percent. I think it has since gone to 100 percent.
Great and important topic, Peter. I’ll weigh in on the female side of the issue. I’m a full-time freelancer who is single, so I’m not covered by anyone else’s insurance. I currently have a PPO plan with Aetna that runs me $317 per month. And yes, it goes up every year whether I use it or not, but not exorbitantly so. I chose not to go with a slightly cheaper HMO because I want the option of going to any doctor anywhere I want. I have a $1,500 deductible, which I never meet, so I carry the policy as peace of mind mostly, because you never know when you will need it. On the upside, I have a $15 in-network doctor co-pay, $25 for specialists, and my network is pretty wide, even in small-town region where I live. I also have a $15 co-pay on generic prescriptions, higher on brand name, which a lot of insurance policies don’t offer. Again, I take no prescriptions right now, but it’s nice to know it’s there if I need.
Your most important point here is: “For those pondering going without – a temptation for singles in good health and feeling bullet-proof, I wouldn’t even consider it. Not worth it.” I can tell you from my dad’s recent massive heart attack and subsequent rehabs, surgeries, home health, etc., he would have been bankrupt without insurance. He’s old enough for Medicare but he presciently carried supplemental insurance as well. He’s had to pay very, very little out of pocket as a result and we were able to get him in with one of the best surgeons the country has to offer without even thinking about the cost aspect. We’re talking millions of dollars here. Having been a witness to all that, I can tell you that I would never dream of going without insurance for a single day (something I thought nothing of when I was younger and just starting out in self-employment).
Hi, I was unemployed, freelancing a little for most of last year. I opted out of cobra and got health insurance for about $265 a mo, with a 5k deductible. I never used the insurance because I couldn’t afford to go to the doctor. It felt like throwing money down the drain. Then came my birthday and my rate went up to $330. I started looking for another insurance policy. I found a small company who mostly does business in rural areas (I live in NC) but they had an agent in Raleigh. The agent came out to my house and explained how their plan worked in detail. It was less than the half the price with a 5k deductible. Coverage was a little less, but you’re covered for catastrophic. If you’re really needing affordable insurance I’d recommend this company. They are called Reserve National. It’s a small, honest company. You only get two doctor visits a year but you can add extra visits to your policy. I was able to get a payment of $145 a month (with automatic payment from my checking account) and I’m 58. You can also save money by paying quarterly.
My insurance agent, Joe Neuman, does a great job of designing a health care insurance product. I asked him to weigh in on this post. See his quotes below:
“The traditional way to shop for Health Insurance is to find the lowest Deductible for the lowest premium. In the era of Health Care Reform this is actually counter-productive!
Premiums (including rate increases) are primarily based on deductibles. I’m confident we can all agree that rates are going to continue to rise. What you’re going to find, is that purchasing Health Care in the traditional manner will cause (now more than ever) you to shop on an annual basis. As a result you’ll spend time and effort AWAY from your business (again) every year, trying to achieve the unachievable!! Stable Premiums!!!!
Allow me to make a recommendation: Embrace the Future. High deductibles are here to stay and depending on the product, they may not even apply to day-to-day benefits such as Dr.visits and R/X.
FYI: your annuals should be covered 100% no Deductible no Co-Pay, thanks to HCR.
So, consider a higher deductible, say between 5-10K, and attach a Supplemental product that pays YOU money to off-set your deductible, Co-Ins. and lost income!!
This will help to stabilize your premium while being covered on multiple fronts.
100% Health Insurance for 1 low cost is gone & is not coming back!!
Embrace the Future, you will spend less time focusing on Health Care and spend more time focusing on your business! ”
***************************
If you’re in the Balt Wash D.C area look him up.
As I mentioned in my blog post (https://chl-tx.com/2009/09/how-to-get-the-best-deal-on-health-care/), buying health insurance that covers ‘everything’ is like buying car insurance that covers oil changes, wiper blades, and gasoline. You get oil changes for $500 (+$20 “deductible”), and wiper blades for $300 (+$10 “deductible”), and gasoline for $75/gal (+$2/gal “deductible”), all for the ‘convenience’ of a single monthly payment. Back when I was (trying to earn a living as) an insurance agent I COULD NOT get this point across to any of my customers. I began to think of my clients as dumber than a box of rocks, which is one reason I got out of that business.
Insurance is for covering catastrophic events. Trying to use it for any other purpose is going to cost you LOTS of money.
But since the cost of medical care is often so high, a lot of things could fall under the category of “catastrophe.” A prescription that 1) your doctor says you really need, but that 2) will cost you $700 per month is suddenly a catastrophe, right? I see insurance as protecting you against those things you can’t be expected to pay for out of your normal resources, and in today’s health environment, even a sprained ankle will produce a bill that can clear out a savings account.
With all due respect to your blog post, TX CHL Instructor, my experience has been completely opposite of yours. Hospitals, labs, imaging centers, etc. tend to charge those without insurance MORE, not less, than those with insurance. That’s because they can get away with it. When they’re working with the insurance companies, they have prenegotiated rates, above which they cannot charge. When you have no insurance, they can charge you anything they want … and they very often do just that.
I do, however, agree with you that trying to get a policy that covers everything, which is basically impossible, is a big waste of money unless you live at the doctor’s office.
I agree with you, Rick. That insurance spokesperson will just say we are stupid, but when you can never “use” the policy bec of horrible deductibles (who has $5,000 lying around for when you suddenly need a broken bone set–the doc will want it upfront if you haven’t paid any of it)? You also have to be your own Death Panel…I aupposedly need a breast sono and a mammo, but the mammo is covered, the sono will cost me 20%–so I am not getting the sono. The mammo will have to do. People who say just get something and pay the least you can–those people haven’t gotten sick or injured yet–I can almost guarantee it!
As for where to get it–well, I would not count on Obamacare to make them take you even with pre-existings in 2014–not unless you are made of money. If the law is not repealed, the cos can charge whatever they want. I used to get group rates thru the Cultural Alliance in DC–not sure they do it anymore. I also had membership in some weird union for several yrs–and got it through that. I have heard you can get something through Costco…The Freelancers Union has something but it’s for people in NY, I think. How about your local chamber–they used to offer members a chance to buy insurance–do they still do that? My niece married her kid’s father just for insurance–they live in VA–someone came to their house and for $35, married them. She said they didn’t have justices of the peace in VA. Who knows…
Actually, the insurance companies have been charging whatever they want, and dropping people, and making capricious decisions about people’s health, for decades. I don’t understand the logic that the 2010 legislation is what is causing all of these problems. Nothing could be further from the truth.
Well, we’ve certainly spawned a spirited debate here… I like that 😉 Kathy, per your comment about how “hospitals, labs, imaging centers, etc. tend to charge those without insurance MORE, not less, than those with insurance,” I’m sure that’s the case in many circumstances.
But a recent experience I had was, in fact, just the opposite. I had a two MRI’s done, and instead of going through my HMO, where I knew they’d run $800-900 EACH (I haven’t met my deductible), I had them done on my own at an imaging center. A chiropractor I’ve been going to (and who gave me the referral to the center) had been approached by several imaging centers, offering self-payers healthy discounts. I ended up paying $900 for BOTH, and was told they charge insurance companies way over twice that amount.
It’s the market system at work. These places are trying to fill their unused capacity, and $450 per series is better than nothing at all.
PB
I would say that if you are getting a chiro to refer you to an imaging center for a discounted MRI or two, you are putting a lot of time in on insurance issues…
Not really. I mean, doing shopping is what any smart shopper does in any setting, so this is nothing different than that, methinks. And yes, I’m doing an end-round the insurance company (who, incidentally, didn’t care that I didn’t go through them; I wasn’t somehow penalized). But it really wasn’t a lot of time. The information was pretty easily researched.
PB
Having thought about it a bit more, Peter and TX CHL Instructor, I can see how both instances (charging insured individuals more and less) could arise. If you live in an urban area, you might very well benefit from paying out of pocket if you do your research first, because you have more medical establishments competing for your business. In suburban and rural areas, in my experience it seems as though the doctors and hospitals get together and basically charge the same amount. Then there’s the question: If you can get a better rate by shopping around, is the time spent getting it worth the cost savings?
Since we’re (presumably) all freelancers here, I think it goes without saying that the most important thing is to make sure you’re getting the best-quality care for the best price. Like freelancers, not all medical professionals are created equally and cost shouldn’t be the sole deciding factor. The fact that it often is makes this whole healthcare debate even scarier.
I’m going to drop another pet peeve into the mix: specialists who require a referral even when one’s insurance stipulates s/he doesn’t need one. I’ve encountered this situation a LOT over the years and it reeks of a money-making scam. In essence, it requires both those with and without insurance to pay two doctors, either through co-pays or payment in full. And that’s not to mention the time-wasting factor. Everyone wins … except the patient.
To broaden the perspective a bit: The dynamic is more complex than insurance companies and MDs vs. the patients. It’s really a triangle of insurance vs. MDs vs. patients, each pulling in a different direction. My wife is an MD in private, solo practice (Psychiatry). Here’s how the cos. abuse doctors. They promise to fill the MD’s waiting room if he/she will accept the insurance. Very appealing. Comes the kickers: 1. they offer the MD say $80 for what the MD would bill at $200. 2. they make the MD chase very hard to collect even that. A busy MD office may have 1-2 people whose sole job is verifying coverage, submitting claims and following up for months why the claims were not paid. (“Time value of money” means if the company can hold off even 30 days paying out $millions in claims, it puts that money to work in short-term investments.) Have you noticed the signs in your MD’s office saying, “We no longer take insurance but will provide you with paperwork to submit to your insurance company”? Kicker #3: Insurance companies control the practice of medicine by what they will and will not reimburse the MD for. Example I have from an MD/former client: Company would not reimburse a gynecologist for a minor vaginal procedure because their (fossil of a) medical expert said “relief of painful intercourse” did not meet the criterion of “medically necessary.” No wonder thoughtful observers have long called for universal coverage and a single payer system, i.e. Medicare for the rest of us.
As several have stated, I think the bottom line is that unfortunately in the U.S., health insurance is moving away from paying for every doctor visit, etc., and moving towards covering you for catastrophic health problems. (But as Rick Middleton pointed out, “catastrophe” is a relative thing) The point I was trying to make in my earlier post above is that having a high deductible is better than having NO insurance. (i.e., if something happens, you’ll be in debt $5-10K instead of, say, half a $million). But I certainly didn’t mean to imply that it’s easy to meet that high deductible. If things were easy, I’d be paying a huge premium in order to have a zero deductible.
I left my longtime corporate gig over three years ago to start my writing business and have had my own PPO policy since day one…never considered going without it for the reasons given here. Went with a relatively high deductible and had decent premiums with modest annual increases until this past October when I got hit with a 30% increase, which was nearly three times any previous annual increase. To make matters worse, they hammered me again in January with an additional hike of 25%. I don’t need to say it, but a 55% premium increase in a three-month period is quite a jolt to any budget.
Since I’ve been in good health and have only used the policy once in three-plus years, these increases came as quite a shock, and the reasons initially given were vague and unconvincing. In both instances, I filed a complaint with the state insurance commission, which, in my state at least, forces the company to reveal the real reasons for the increase. For the first increase, they said it was because I turned 45 “recently”…which in fact was several months earlier in the year. For the second increase, they specifically cited the new health care law (aka the “Affordable Care Act”). Wonderful.
The recent increases have forced me to consider other alternatives, including going back to work for someone who offers medical…but I can’t envision having to get up every morning and work in an office again. Hopefully it won’t come to that, as long as my business continues to sustain me and any future unplanned premium increases are kept to a minimum…which is unfortunately something I have little control over.
Any advice on handling applying for health insurance with the possibility of a (minor) pre-existing condition? I’ve heard of instances where insurance companies have denied coverage for “pre-existing conditions” such as corns or irritable bowel syndrome. In fact, my understanding is that most people, especially above the age of 22, have one of some kind. I’ve also heard that if you’re denied by one company, it can be difficult to be approved by another one. Interested in tips or comments on this front.