Freelancers are in charge of...well, everything. That includes buying your very own health insurance policy. You don’t have an employer setting your hours or hassling you about timesheets, so why should you have someone telling you what health insurance you should buy?
But because freelancers are in charge of everything, you might not put your health insurance top of mind. Who better to tout the importance of insurance than two freelance writers – who also happen to be personal finance experts?
Let’s dive a little deeper into how freelancers can use health insurance to build a better plan for their future.
You have less of a safety net
Don’t get me wrong – it’s possible for freelancers to have a very strong safety net. You can build your emergency fund and have smart budgets. But the fact of the matter is you don’t get benefits like sick leave or employer-provided disability insurance.
Even the freelancers with the most hustle have an irregular income. You finish a project, a client drops out, or – fingers crossed – you close a big new deal. You don’t want the boring day-to-day of an office job, but a little consistency when it comes to money isn’t necessarily a bad thing.
Let’s be honest: you might not want to pay for your health insurance every month, but isn’t a low regular cost worth not having a huge, unexpected cost that a medical bill can bring?
Let’s look at Miranda’s example from the video above: she broke her wrist and learned that, without health insurance, it would have cost $40,000. Forty thousand dollars! That’s like paying for a really nice car, except instead of a car you get a broken wrist, so it’s actually the worst deal ever.
Compare that to being part of the 70% of people who can get a health insurance policy for under $75 a month. I crunched the numbers so you didn’t have to: at $75 a month, you could go 533 months – almost 44 and a half years – before you spent $40,000.
Building a budget is easy. You can use an app like You Need A Budget or a simple spreadsheet. Plug that $75 into your budget and you can more or less forget about the danger that medical bills pose.
Or you can not buy it, still have to pay the individual mandate penalty, and worry about blasting through your emergency fund and heading straight for looming bankruptcy every time you trip over the rug in your apartment.
You don’t have to be a health insurance expert
Freelancers are, if not a team of one, then a team of very few. You have to be an expert in your field. You have to stay on top of the latest trends and technologies. You have to know who the right clients are, how to approach them, and how to deliver.
Do you really need to know everything there is to know about health insurance, too?
You should definitely know the basics. If you don’t, don’t feel bad: our survey last year, and a followup survey this year, showed that most Americans aren’t really up to speed on what their health insurance policy means.
There’s a lot that goes into health insurance. How many doctors are in your network? What’s the tradeoff between what you can afford and what’s available? What’s the difference between getting a federal subsidy and qualifying for Medicaid?
Both our freelancers pointed out that health insurance can be confusing, and when you’re bogged down in jargon, it can be easy to not see the forest for the trees. You’re so busy trying to remember what coinsurance means that you forget to check if the plan you chose covers your prescription medication.
Go into health insurance shopping with a plan – know what you’re willing to compromise on, what you actually need, and what’s important to you – so you can make the most out of Open Enrollment.
You can find affordable options
It’s true that health insurance premiums have risen this past year. Honestly, it’s kind of a lot in some places. But that doesn’t mean you can’t afford it. You just have to know where to look – and what to look for.
Let’s go back to that stat from earlier: 70% of shoppers can find a health insurance plan for under $75 a month. Part of this is thanks to federal subsidies, which lowers the cost of health insurance considerably for some people. But almost 2.5 million people don't take advantage of their subsidy. You won’t automatically have subsidies applied if you’re eligible, so
You also need to know, or at least assume, what kind of healthcare consumer you are.
If you’re young, healthy, and/or you haven’t gone to the doctor for much more than a checkup in the past, you’re probably good with a low-premium, high-deductible plan. You’ll have to foot more of the bill if something comes up, but you’ll probably save in the long run by not paying high upfront costs.
On the other hand, if you have a chronic condition that requires a lot of doctor visits, or if you know you’re planning on getting pregnant or getting a surgery, a high premium plan might not be ideal, but if it means you hit your deductible sooner and your insurance starts covering costs sooner, it could be better for your budget.
And don’t forget to shop around! Plans Healthcare.gov or state exchanges like New York State of Health are limited in the plans they show. If you shop off-exchange plans on marketplaces like PolicyGenius, you can find plans that are more flexible – and therefore potentially cheaper – without sacrificing the consumer protections like essential benefits and pre-existing condition coverage. Look outside of the government exchanges for even more options.
You stay on top of a lot of deadlines as a freelancer – when projects are due, when payments are supposed to come in – so you should stay on top of your health insurance deadlines, too. To get coverage for 2018, the federal deadline is December 15, 2017. Some states have extended their enrollment period, so be sure to see what's going on in your state with our state by state Open Enrollment guide.