Last week's article talked about estimating how much you need to earn before you make a shift to writing full time. This week will focus on health insurance.
Health insurance is something many people don’t think about in advance, but in the United States it's often harder to get, or costs much more, than expected.
Because I’ve been self-employed for a decade, starting before the Affordable Care Act was passed, I’ve devoted a lot of time and energy to healthcare and insurance costs and staying covered.
I offer what I’ve learned in the hope that it helps you with what to think about before launching a full-time writing career, but—here’s the disclaimer you knew was coming–I’m not a legal, financial, or insurance expert when it comes to health insurance or medical care.
This article is meant as an overview and starting place, not to tell you what you personally should do for your specific circumstances. Also, this post is mainly directed toward writers in the United States because that's where I live, and it's the health insurance world I'm familiar with.
Reasons Not To Skip Health Insurance
The Affordable Care Act requires most people in the USA to have health insurance or pay a tax penalty. Recent changes to tax law eliminated the penalty, but I've read that those changes don't go into effect until 2019.
Whether or not you would pay a penalty, being uninsured poses significant costs and risks.
- Even if you are overall healthy and haven't needed to spend much on healthcare in the past, you can’t control everything in your life.
If you cross a street and a driver who is texting rounds the corner and hits you, it’s very possible you’ll suffer serious injuries. It’s easy for hospital bills to run into the hundreds of thousands of dollars. Even for less serious injuries other medical care, such as physical therapy, is not cheap. (I know firsthand from recently breaking my foot.)
- Regardless of your past health and no matter how much you take care of yourself, you could be surprised by a serious illness or heart attack.
Your health insurance information is the first thing most doctors' offices, clinics, and hospitals ask for.
Getting treated without it, other than at an emergency room, is a challenge. Paying for that treatment, unless you either have massive wealth or are completely broke, risks draining your bank accounts and sending a lot of your future earnings to healthcare providers.
- If they can afford to pay, uninsured people generally pay the highest rates for healthcare.
Insurance companies have bargaining power because they influence so many patients' choices of medical provider. As an individual, you have next to no bargaining power.
Also, quite often the billing office of a medical provider won't be able or willing to tell you the price in advance, you just get a bill later and get collection calls if you don't pay in full. (The exact words at my doctor’s office when trying to find out a price before treatment were, “Ma’am, whatever the charge is, you need to pay the full amount.” “But what is that amount?” “You have to pay it in full.” This went on through several attempts until I gave up.)
Where You Can And Can’t Get Health Insurance
Some options for health insurance:
- You may be eligible for insurance under a spouse or domestic partner’s group health insurance policy. (You probably are not if your partner is self-employed.) If you are, there’s a good chance it will be your least expensive option or at least will offer the best coverage for the price.
It’s worth understanding other options, though. If your relationship status changes or your partner’s employment changes, you may need to find another way to stay covered.
- Most full-time jobs include health insurance benefits. If you leave you will usually be able to extend that coverage for eighteen months under a federal law known as COBRA. (There are a few exceptions, so verify this with your employer.)
After that, you will need to find something else.
- Since 2010, under the Affordable Care Act health insurers who offer individual coverage have been required to insure everyone regardless of medical history.
You can buy individual coverage through healthcare.gov. These plans are not government insurance (there is no insurance called “Obamacare”), but are individual plans health insurers offer.
Check into this well in advance. There are limited enrollment periods, but certain life circumstances (like a job loss or change) allow you to buy at different times of the year.
That means you can also buy an individual policy directly from an insurer if you aren’t seeking a subsidy to help pay the premiums. When the ACA became effective, I called Blue Cross directly because I knew it offered good coverage. I found the salespeople very helpful in sorting through all the plans and options.
In recent years there have been news stories about counties where there are no health insurers offering individual plans. This is mainly due to a lot of uncertainty about changes in the law and what payments insurers will receive. If your county has no insurers, your state or county may have a set up an option.
- If you are or you become a student at a college or university you may be eligible for student health insurance.
But check the fine print. You may need to be a full-time student or to take a certain number of courses. Also, the insurance may or may not continue during times when you aren’t taking classes.
Some writers and artists I know have extended or enrolled in graduate programs relating to their art not because they want the further education but to stay insured.
- Some voluntary organizations, such as churches or professional associations, may offer limited health insurance options.
Always check the benefits before you count on these types of plans. Some have waiting periods of over a year for coverage of pre-existing conditions and/or offer limited total coverage.
Also, every professional organization I've checked offers not a group plan but some sort of deal on individual plans. This means the coverage will be the same as what you’d get in an individual plan and typically won’t offer the type of insurance or pricing a group plan might.
I mention this because in the days before the ACA, many people mistakenly believed they could get covered despite pre-existing health issues through an organization like the Chicago Bar Association, AARP, or some type of self-employed network. Because such plans are individual plans, not group plans, that was not the case.
Costs Of Insurance And Healthcare
If you extend your current employment coverage through COBRA, your cost per month will depend on your employer's plan. It may cost more than you expect, but in my view it’s best to take the paperwork and compare to other options before you turn it down. It may turn out to be your best option.
You can check out the range of costs on individual plans on healthcare.gov even if you don’t plan to buy through the website.
In some areas, there are a dizzying array of plans, so at first it’s best to use it to get a rough idea of costs. You can narrow it down later.
Most health insurers also provide an online tool, such as this Blue Cross Blue Shield site, to compare their plans.
A few things to keep in mind when thinking about costs:
- The premium for an individual plan rises with your age and depends in part on where you live.
As a 52 year old in Chicago, my current premium for a fairly wide provider network (which still doesn't include my doctor) with a $5,500 in-network deductible is over $650 a month. If I were 22 and lived in Springfield, Illinois, it would be a lot lower. If I chose a narrower network (see below) or a different insurance company, I could likely lower my premium.
- Higher deductibles and higher out of pocket limits generally mean lower premiums.
When you budget, it’s helpful to compare the costs of a year’s premium plus a year’s deductible–and a year’s premium plus a year’s out of pocket expenses–for each plan. That gives you a better sense of the overall cost of each plan.
- Wider networks, meaning more options for choice of hospitals or doctors, usually means a higher premium.
Search for a few hospitals and doctors in your area to see how wide or narrow the network is. Check on whether your regular doctor is in various plans. If you're willing to choose from a smaller number of, or a different set of, medical providers the cost may be less.
Keep in mind, though, that you may not always be able to find the care you need within network, so at least eyeball the out of network benefits so you're not taken by surprise.
- Research the insurer to see if there are consumer complaints.
Some insurers are better than others about paying claims.
This may affect not only your bottom line but whether a healthcare provider will accept that insurance. Check sites such as your state government's consumer website and the Better Business Bureau or simply run a general search for the insurers' name and consumer complaints and see what comes up.
Quality Of Care
There’s an old saying in the insurance industry that when people shop for insurance they only care about price and when they use insurance they only care about benefits.
This can lead to a lot of problems, particularly in healthcare.
Writing about healthcare quality issues is a topic far beyond this article, which is already one of the longest on this site. But a few thoughts before I close.
When you’re choosing a plan, in my view it's key to consider what doctor you'll be able to see and at what hospital you'll be able to seek treatment along with the cost. Even if you need to go with the lowest cost plan, being prepared in advance for what your choices will be will help.
Finding out when you’re already injured or ill (and so in distress) that the medication your doctor prescribed will cost $500 because you went to the wrong pharmacy or it’s not on the insurer’s preferred list can not only be upsetting but can seriously harm your health.
If you'll need to find a new doctor or hospital, look at how many options you will have to choose from. Keep in mind the number of options listed can be deceiving. My insurer lists quite a few primary care doctors as accepting new patients, but so far I've called seven of them and none were accepting new patients.
Also, remember that not all doctors and hospitals are created equal.
Do some research (online at the library if necessary) into the quality of care of the hospitals in the network. How does the hospital rank for patient outcomes compared to others in your area?
Also look at the qualifications of the doctors you may want to see.
How long have they practiced? Are they board certified in their area of expertise? Do they get good reviews on patient care sites? Where did they go to school?
If you follow the news you know that healthcare options and insurance options are always changing and not always for the better. For that reason, it’s wise to have a back up plan.
Many people, myself included, who sought individual plans in the days before the ACA were surprised to find no one would insure them. I’m in overall good health, exercise 30-60 minutes a day, am the recommended weight for my height, eat a healthy diet, and don’t smoke. None of that mattered.
What mattered was that I had a blood clot a month before I opened my law practice. It was the kind that can’t kill you, and it requires no on-going treatment.
The medical establishment differs on whether it puts me at risk for the more serious type of blood clot down the road, but the insurance industry wasn’t taking any chances. I was turned down and had to buy insurance through a state plan (now gone) that allowed me to basically continue my COBRA coverage.
Another attorney I know got turned down because she went to counseling during her divorce nearly a decade before she applied for individual coverage.
I mention this so you’re aware that changes in the law could mean you can no longer get insurance even in you think you’re in good health. So it’s important to keep an eye on developments so you'll have time to make changes if needed.
That’s all for today. Until next Friday, when I’ll talk about maintaining your mental and emotional health when you write full time—