This article has been contributed by Michael Cahill.
Let’s not tiptoe around the issue at hand, when dealing with matters of health insurance, freelancers in the USA get the bad end of the deal.
Freelance design is not a job for the meek given how competitive it is, and how rough freelancers have it without the typical health insurance plans offered by many employers.
The Affordable Care Act (ACA) has finally rolled out, and the law looks to be making some big changes that will have an effect on freelancers of all stripes seeking out health insurance. Together we’ll look at some of the big changes that this law is bringing into play, and we’ll see what exactly they mean for you. Afterwards, we’ll give you some alternatives to marketplace plans and a step-by-step guide to purchasing a plan.
The Essentials of the ACA
More Benefits On More Plans
The Essential Health Benefits are a set of 10 categories of medical benefits that the ACA mandates every health insurance plan to have, no matter the cost, thus increasing the viability of cheaper plans. These benefits cover a wide range of stuff, such as laboratory and ambulatory services. If you want to see what else is under the umbrella of essential health benefits take a look right here at Healthcare.gov’s glossary. If you were hoping for a more specific description of these benefits, you will have to look elsewhere. As I mentioned before the benefits themselves are categories. The services that fall under each category are to be determined on a state, not federal, level.
The Centerpiece of the Affordable Care Act: The Marketplaces
At the center of this far reaching legislation are online health insurance marketplaces, sometimes called exchanges, that serve as one stop shops for Americans looking to buy health insurance. Most states (36) chose to allow the federal government to establish and run their health insurance marketplace. In that case you will be buying health insurance at Healthcare.gov. Check out this list from the Kaiser Family Foundation to find out if your state is running its own marketplace.
Once you are actually at the marketplace, whichever one it is, you will see that plans are organized into four classifications: Bronze, Silver, Gold and Platinum. These classifications are there to give you an idea of a plan’s premium and coverage. Platinum plans come in as the plans with the highest premiums, but as you likely expected they cover the highest amount of costs. From there, the plans go from Gold to Silver and finally Bronze as the plan with the lowest monthly premiums.
However it’s good to keep in mind that as the cost of your monthly premium decreases, the cost of your out-of-pocket expenses go up. For example Bronze plans cost the least each month, but come with higher copays and deductibles.
All About The Subsidies
Depending on what your annual income is, it’s possible that you will get a federal health insurance subsidy on your marketplace plan’s monthly premium. The income range for tax credit eligibility is between 100 percent of the Federal Poverty Line and 400 percent, roughly $10,000 to $40,000 a year. To see an estimate of what your subsidy might be check out this subsidy calculator brought to you by the Kaiser Family Foundation.
Buying Outside The Marketplace
It is entirely possible that the marketplace options aren’t ideal for you. That doesn’t mean that you have to pay a fortune for healthcare. There are still alternatives. For example, the Freelancers Union offers health insurance in a number of states. Even if you can’t get a full insurance plan in your state, you might be interested in their dental options.
If your spouse has their own plan, you can look into getting covered by it. Another viable option is COBRA. If you meet certain conditions, this program makes it so you that you may be able to temporarily continue coverage that you have received from a past employer. For freelancers who have recently lost a job or who work another job with reduced hours, this can be a great short-term solution. To learn a bit more about COBRA, check out the FAQ on the Department of Labor’s website.
Getting A Plan
Step 1: Learn & Prepare
The above information is only a small percentage of what is going on with the ACA. Do what you can to keep learning. If you need some help understanding this stuff, and I don’t blame you, consider talking to a licensed insurance broker. You need to look at things like the number of people in your family, preexisting conditions, your preferred doctors (to see if they are in a plan’s network) and much more.
Before you buy a plan you should know exactly how much you have been spending on healthcare and health insurance. This is perhaps the most important piece of information to have. Look at your medical costs and figure how much of them your current plan covered. Additionally, distinguish between medical care that was routine, a small issue or a big problem. Something like an unexpected illness or surgery can end up costing you a fair chunk of change, and it might skew your figures a bit. Try to figure out the average cost of your medical expenses in a normal year.
Given that, it is also up to you how much you want to prepare for an emergency. You might find the risk of paying higher out of pocket costs in an emergency is worth the lower premium. All of this knowledge will give you a place to start with your search for insurance.
Step 2: Get Quotes
With a reasonable expectation of how much coverage you need and the amount of money you are willing to spend, you will no longer feel like you are swimming through an infinite sea of plan choices. Now you can pare down your choices and start wading through plans. Make sure to get quotes from multiple carriers on plans that seem like a good fit. Furthermore, it is advisable that you look for reviews of the plans. As with anything else, it is always good to get opinions of how it works out in practice.
Step 3: Make A Decision
When you have finally found the right plan for you, it is time to sign up. For one, be complete. If you don’t know something, collect the information and come back to it. Second, be honest. For example, if you are a smoker, don’t lie about it. You will likely be charged a higher premium, but if medical tests mandated by your insurance company show that you smoke, there is a good chance your plan will be revoked, and you won’t get a cent of your premium back.
At this point, I hope you are feeling confident and ready to get going. These changes in the healthcare system may have a huge effect on you, or a very little one. Whatever the case, stay informed of all the latest developments, and do your best to be a savvy consumer.
Do you have any other advice for freelancers looking for health insurance?
Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. Follow him on Twitter at @VistaHealthMike