Working from home (or a coffee shop) as a freelance writer certainly has its advantages, like schedule flexibility and everyday being casual Friday. However the freelance writing lifestyle is not without its share of shortcomings.
One of the most frustrating parts of the job for anyone who’s been freelancing for a while is trying to buy health insurance at a price that covers what you need and doesn’t break the bank. Those 9-5’ers employed by large companies often have the advantage of paying lower group rates on a comprehensive health insurance plan. Freelancers have usually had no choice but to cough up the money for a plan with an expensive premium that might not even cover all the medical services they and their families need.
With the Affordable Care Act, commonly referred to as Obamacare, this will all be changing. Freelance writers and other self-employed professionals will benefit disproportionately from the sweeping changes coming to the American health care system.
Let’s take a look at how the system will work and what you can do to get ready for it.
The Basics of the Health Insurance Marketplace
If you want to know what your options are, the first step is to take a look at the federal health insurance marketplace, or exchange as it’s sometimes called, on HealthCare.gov. This exchange is the cornerstone of the Affordable Care Act, and the place where Americans in 36 states can go to purchase subsidized health insurance that meets the new requirements of the law. Americans in the other 14 states will be able to buy Affordable Care Act health insurance at their own state’s health insurance exchange. To see which states are operating their own exchanges and which ones are operated through HeathCare.gov, check out this guide from the Kaiser Family Foundation.
Regardless of whether you’re buying at your state’s exchange or the federal exchange, all health insurance plans fall into one of four categories: Bronze, Silver, Gold, and Platinum. These metal-themed tiers offer a wide range of premiums and coverage, with Bronze plans costing you the least per month, but coming with the highest out-of-pocket expenses. At the other end, Platinum level plans have the most expensive monthly premiums, but come with the least out-of-pocket costs.
Finding the Right Level of Coverage
When you’re buying a plan, don’t just rush in and buy one that “seems” like the right choice. Bring some cold, hard facts about your needs with you to the table. Be realistic about the level of coverage you will need. If you have a family or any chronic conditions, you’ll probably need or want to have more coverage. Do you visit the doctor very often? How much are you willing to spend on a plan? These are all important factors to consider when you’re looking through plans at the exchange.
Getting an Affordable Plan
While the nicely organized tier system is helpful, it isn’t what’s going to save you money. Tax subsidies are where you save money. Depending on your income level, you may be eligible for a health insurance tax subsidy when buying a plan at the exchange. This credit is potentially pretty hefty, and it gets bigger the less money you make in a year.
Basically, if your annual income is between 100 percent and 400 percent of the Federal Poverty Line, you’re eligible for a subsidy. How much that subsidy will be exactly depends on a variety of factors. My personal recommendation for the easiest way to see how much you’ll get is to use the Kaiser Family Foundation’s subsidy calculator.
Introducing the Essential Health Benefits
Under the Affordable Care Act, every plan will be getting a little bit more comprehensive. A set of “essential health benefits” categories are now required to be offered by health insurance plans at every tier. Some of these categories include laboratory services, maternity care, and emergency care. It’s important to note that these are categories, and not actual medical services. It’s up to each state to interpret what these benefits constitute. Check out the full list of essential benefits categories here.
Simplified Health Insurance
Overall, the Affordable Care Act is going to do two things for freelance writers buying insurance: it provides hard-working individuals of all stripes with a set of health insurance options that are reasonably priced, but perhaps more importantly the law is making all health insurance plans more comprehensive and equitable.
To make a well-informed purchase you’ll want to study up on the Affordable Care Act, or talk to a licensed broker who can help you to choose. Take advantage of these options and procure yourself a good plan.
Michael Cahill is the editor of the Vista Health Solutions Blog. He writes about the health care system, the health insurance industry, and the Affordable Care Act. Follow him on Twitter at @VistaHealthMike
Your Take
Your thoughts on Obamacare/Affordable Health Care and how it applies to freelancers? Will it help you or not? Any specific questions about how it works and what it does?
Hi Michael. Nice summary of a complex law.
What many will find when they can actually get on the Healthcare.gov site are a lot of high deductible plans. Generally, the higher the deductible, the lower the premium. But, that can leave a lot of out-of-pocket expenses.
Over at my health care blog, I posted some info. on supplemental health insurance that freelancers may want to consider in their overall strategy to fill the gaps.
You are right about the tax subsidies – huge savings on premium costs – if you qualify. Estimates are that’s $45,960 (or less) for individual coverage and $$94,200 (or less) for a family of four.
Thanks for sharing info. that is so important for hard-working freelancers.
Hi Cathy,
I’m glad you enjoyed the article, and that’s some great information about supplemental health insurance for freelancers on your blog. It’s always important to keep in mind that plans on the exchanges are not the be all, end all for health insurance next year. There will still be plenty of options for people to shop off of the exchanges for health insurance.
I’ll be choosing the bronze plan. I’m a fairly healthy person and I have enough savings to deal with the high deductible (and spending time recuperating) if something bad should happen.
Great overview, Michael. Thanks, John. Love knowing more about the plan. I know a few people who are needing coverage, but don’t understand enough about the program.
Thanks for reading Lori and I’m glad you enjoyed the article. What specific areas are you having difficulty with. Maybe I can help?
Hi Michael,
This is informative. I have been without insurance for a while. I’d be interested in having a plan for a single person, but I not sure which to go with, as I don’t know enough about it.
Hi Terrence,
I’m happy to hear you found the article informative. When picking a plan for a single person there are a number of factors you should take into account. First and foremost in my opinion is the cost factor. How much can you budget for health insurance each month? One of the very helpful aspects of the ACA are the subsides for buying health insurance. These can save you a substantial amount of money if you qualify.
I’d recommend using the Kaiser Family Foundation calculator I linked to in the article. It’s not 100 percent accurate, but it’s good for a ballpark planning number. For the exact subsidy number you’ll have to go through the exchange, either your state’s exchange or the now dreaded HealthCare.gov.
Aside from price, you should also honestly assess your need for health care. For example if you are only going to the doctor once or twice a year, it doesn’t make sense to buy an expensive platinum plan, when a cheaper bronze plan would serve you just as well. I could continue to drone on and on about picking a plan, but I’ll try to restrain myself =). I would suggest though talking with a local or online health insurance broker to get some specific health insurance recommendations.
One thing that a lot of news stories don’t mention is that the exchange navigators are there to help you sign up for a plan, and figure out the exchange, but they are legally barred from making recommending specific health insurance plans.
Whereas with a broker you can sit down and discuss your health and financial situation, and specific things like how different insurers’ networks compare with one another. Then at the end the broker can suggest plans that fit your needs.
I hope that was helpful!
Just be forwarned that it is possible that anyone in a state that did not set up a state exchange may loose access to the federal exchange and subsidies. There are quite a few lawsuits right now over this. If the plaintiff’s get what they want, the exchanges will go away in the 35 states that didn’t set up an exchange.