If you’ve recently decided to pivot to full-on self-employment, you might have one question: What am I going to do about health care? It’s a valid question, and many people are in the same position. A 2021 Gallup poll found that 1 in 6 Americans stay in jobs they don’t find fulfilling just to keep their health insurance.
I’m here to tell you that if you are wanting to take the plunge into entrepreneurship, the health insurance options for those of us who are self-employed are not as bad as you might think. I work a very part-time job at a consulting firm, and the majority of my work is through my own endeavors, whether writing for magazines (like this one!) or working with my own client base as a marketing consultant.
I currently use a marketplace plan that is actually pretty affordable with a federal subsidy, and Illinois offers great state health care for kids that has high-income thresholds and low premiums (if any).
Working with an agent
I set up my marketplace insurance plan this year. I had priced marketplace insurance before, but it felt confusing and frustrating to me. The premiums looked too high, and I have very specific medical needs that require very good coverage.
I was referred to a health insurance marketplace agent by my father-in-law, who has a guy for everything. Health care brokers don’t charge you. According to this FAQ by the Centers for Medicaid and Medicare Services, broker compensation is paid to the broker by the affiliated health care plan.
Working with an agent was helpful to me personally because I take some very expensive medications and see a couple of specialists, meaning I am willing to pay more for a premium that offers more. I was able to find a plan that covers what I need and has a tax subsidy that makes it affordable.
Marketplace insurance
As I previously mentioned, I worked with an insurance agent to set up my marketplace plan. But you can do it yourself on the marketplace website as well. When you visit the Healthcare.gov website, there will be a drop-down menu that directs you to your state’s health insurance exchange.
Open enrollment begins on November 1 and ends January 15, with coverage beginning in January or February depending on whether you met the first enrollment deadline of December 15. When you go through the enrollment process, the marketplace will first check to see if you are eligible for Medicaid and then take you through the process of selecting a plan.
S.J. Antonucci is the co-owner of the Shtil Group, a real estate and mortgage brokerage that operates in Southern California and Pittsburgh. She gets her insurance through Covered California.
“I buy PPO insurance through Covered California,” Antonucci says. “So there are HMOs that you can buy that are cheaper… but one of my mom’s big [pieces of] advice is that you always sign up for PPO health insurance.”
The main difference between HMO plans and PPO plans are budget and choice. HMOs are usually cheaper and have cheaper premiums, but generally will not provide coverage for out-of-network providers.
One note of caution Antonucci shares is that there are some doctors who discriminate against Covered California plans, although it’s technically illegal to do so.
“There are many doctors that just won’t take it because they don’t get paid as much [in insurance payouts] on Covered California PPO plans,” says Antonucci. “And they would if you had PPO plans and worked at the school district or some other place.”
State plans for kids
The Children’s Health Insurance Program (CHIP) is a federal program to provide low-cost health insurance to minors whose family earns too much money to qualify for Medicaid. These plans are either provided by your state’s Medicaid program or can be purchased through the marketplace.
My kids are insured under Illinois All Kids, which initially offered health insurance with a lower premium or no-cost health insurance to children in families that qualified based on income. However, Illinois recently changed it so there is no premium for children who are insured through AllKids, meaning my children’s care is covered entirely.
What most parents don’t know about CHIP is that the income threshold may be higher than you would expect to qualify for free or reduced health insurance for your children: For a single parent and one child, the maximum earnings would be $81,760 and for a family of four, the threshold is $124,800.
Association health plans
In some states, members of a large organization could go in together on a group health insurance plan. This is an ideal option for businesses with one or two employees (like a married couple, for example). The idea here is that the organization (like a chamber of commerce) acts as the “employer” in a large group plan and members have the option to purchase insurance.
Sabrina Corlette, J.D. is a research professor and co–director of the Center on Health Insurance Reforms at Georgetown University; and she has authored articles on the topic of association health plans. She recommends that individuals compare plans to available market plans before making a decision to purchase them.
“The marketplace has a calculator,” says Corlette. “You can quickly put in your income information and your household size and get an estimate of what your premium would be for a marketplace plan.”
Check state-specific coverage
It’s also important to confirm what is covered because the laws on required coverage can vary from state to state.
“Some states require in vitro fertilization, autism services, hearing aids,” says Corlette. “There’s a whole bunch of requirements that states might have for health insurance, and if the association health plan is exempt from the state regulation and state standards, you may not have the same level of coverage that you would [otherwise].”
Corlette also noted that it’s very important to know that there has been a shaky history with association health plans defrauding their members or going bankrupt and leaving members on the hook.
“In some cases it’s outright fraud where they’re collecting premiums, but not actually covering much,” says Corlette. “And in some cases, it’s like more insolvency where they didn’t know how much they were going to have to cover, and they’ve actually gone bankrupt. They’ve left policyholders with a lot of unpaid medical claims.”
Dental insurance
Many people—even those who have insurance offered by their employer—elect not to have dental insurance. Dental insurance generally has annual maximum limits, which means you will often end up paying quite a bit of money for care if you need extensive work done. Additionally, dental insurance may not cover procedures deemed cosmetic, like teeth whitening or orthodontics.
Finding out you need a lot of dental work can turn into a big expense, and some dental insurance policies make you wait to get major work done. But buying a dental plan isn’t necessarily a scam because it will almost always cover preventive care 100%. It depends on how much your dentist charges for checkups versus the premium for the plan, and whether you need work that will cost more than it would with insurance.
Medical tourism
This month, I tagged along to Cancun with my friend Korie Veidel, a self-employed tutor who is currently authoring a homeschooling course, because she elected to get her dental work done in Mexico. She ended up not needing the root canal that an American dentist said she needed, but she stated that she would have saved over $2,000 on the procedure in Mexico.
“This is my second time that I came to Cancun,” says Veidel. “The first time I came, it was me and my husband and my two children. My husband needed a post, a root canal and a crown. I needed two root canals and crowns, and I needed my wisdom teeth removed. We came down as a family of four and got a whole bunch of dental work done.”
If you decide to go outside of the U.S. for medical care, it’s important to learn as much as you can about the health facility you go to as well as the area around it. The Centers for Disease Control and Prevention has a guide to safe medical tourism, which you should absolutely consult.
Health insurance companies for self-employed individuals
Where you shop will depend on your situation. You can shop the marketplace with or without a broker (I vote to use a broker because the broker is free), but your policy will depend on what your needs are.
The policies that are available also vary from state to state. If you shop the marketplace, your plan level will determine your deductible, co-pays and premium. For example, the premium for a Bronze plan will be cheaper monthly, but your deductibles and co-pays to access care may be more expensive, whereas the premium for a Platinum plan will cost much more, but your co-pays and deductibles are generally going to be more affordable.
The best company to choose will also depend on your region and the providers in the area. You can browse available plans directly on the Healthcare.gov website.
Blue Cross Blue Shield: What the plan is called will vary by your state as Blue Cross Blue Shield is broken down into several different health insurance companies. Because it is made up of so many entities, it was hard for SUCCESS to verify if it actually has the largest provider network. Anecdotally, Blue Cross is known for having more enrolled providers, and I have found this to be the case while navigating the many health insurance plans I’ve had personally.
Kaiser Permanente: Kaiser operates under a unique business model where they function as both the insurer and the provider. This leads to a reduced cost in care, but it can add complications if you want to see a provider outside of Kaiser’s network.
The biggest deciding factor for me is always whether my providers are enrolled with a certain health plan, because I want to continue to see the people who are already involved in my care.
Select the best health insurance plan for your needs
Choosing a health insurance plan is one of the hardest decisions to make if you don’t know how to navigate the system and all of your options. The biggest takeaway is that the best health care plan for you is the one that helps you access the best care, whether that be a plan that works with your existing doctor, the plan that offers the lowest premium or the one that covers your medications.
Photo by Antonio Guillem/Courtesy of Shutterstock
