That deadline really sneaks up, doesn’t it? Still, if you’re trying to get in under the wire for health insurance, it’s definitely possible. The fastest way to get through the shopping process is to make sure you’ve done the legwork upfront and know what you’re looking for before you start researching options. That means brushing up on your health insurance vocabulary, defining a budget and having a plan.
Why do freelancers need to buy health insurance right now?
Since that’s not very helpful, the other main thing you need to know is that whatever health insurance plan you purchase for 2017 coverage WILL NOT change before the end of the year, regardless of what policies the new administration puts into play. And perhaps most importantly, this could be your last chance to take advantage of lower-priced healthcare options thanks to ACA subsidies that will likely go away (yes, seriously, healthcare may get more expensive).
It’s true that healthcare under Trump is a big question mark. There are no fewer than 4 serious ACA replacements being considered at the moment, and they all have varying cost implications, varying coverage guidelines and varying levels of support from lawmakers. That can be scary, and it might make some shoppers ask what the point is of looking for a plan this year.
Well, it’s 2017 and the ACA is still here (for now), which means the individual mandate tax penalty is still here in 2017, too. So if you don’t buy health insurance, you’ll still be penalized. That brings up a worst case scenario for a lot of people: You don’t buy, you’re penalized. You do buy, and six weeks from now Obamacare gets the boot. Then what? Are you out of luck?
Any plan you buy for 2017 is in place for 2017. You don’t have to worry about losing your coverage or something changing in your policy. Those contracts will be set for this coverage year. Treat 2017 the same as you would any other year – you need health insurance to protect yourself, your loved one,and your financial assets – regardless of everything else that’s going on in the healthcare debate.
How do I get freelance health insurance yesterday?
I) Get the facts straight
Health insurance can be confusing, and a surprising number of people don’t even know the basics so getting started is easy to put off. To help everyone realize that they’re not alone in their confusion and clarify that help was available, we ran a nationwide survey that asked 2,000 people to define these terms: deductible, copay, coinsurance and out-of-pocket maximum.
These are common terms that you’ll find as part of any health insurance policy – and, more importantly, they decide what, exactly, you’ll pay for healthcare costs throughout the year. Only 4% of people could correctly define all four terms.
If you don’t know what’s going into the product you’re buying, can you really be sure you’re buying the right thing? So learn what these terms mean and how you can use them to drive down your overall costs before you get rolling. Here’s a quick guide of health insurance terms, and some shopping advice to get you started.
II) Find your budget
You should also have an understanding of what your healthcare budget is. This goes back to the last point, where people didn’t understand what exactly went into what they pay for healthcare. You might know how your premium and deductible work, but you need to know all of the other places where you’ll spend money. The average consumer spends 5% of their annual income on health insurance per year, so use that as your baseline and work your way up or down from there depending on benefit needs.
III) Weigh your options
Finally, start your shopping process with a plan. Your plan should include an outline of what your must-haves and nice-to-haves will be for the next year. The easiest way to do this is by looking at how you used your plan over the last 2-3 years; figure out how often you visit the doctor’s office, if you use referrals frequently and if you have regular prescriptions you need covered.
Let’s be honest, you probably won’t find a plan that has everything you need that won’t completely break your budget. You’ll need to figure out your trade-offs, whether it’s being flexible on your premium or deciding you don’t really need to keep a specific doctor in your network, or realizing that you do need a certain prescription drug covered. If you know what you have to have and what you’re willing to compromise on, you can immediately dismiss whatever plans don’t work for you.
How will freelance health insurance change in the next few years?
What health insurance looks like for freelancers over the next few years really depends on what happens to the ACA and what direction the current administration takes on the mandate and benefits. For example, one of the plans on the table has an auto-enrollment component, where everyone will automatically be enrolled in a baseline health insurance plan unless they choose otherwise. The use of HSAs is a popular aspect of a few replacement plans. Purchasing assistance might be based on age rather than income.
The most important thing for freelancers to do is to keep an ear to the ground in regards to what’s happening in the world of health insurance. Any ACA replacement will have an impact on nearly everyone, but people who have their insurance through their employer may not notice huge changes.
Self-employed people who have to budget and more actively shop for their health insurance will need to be more aware of what’s available (and no longer available) to them, especially over the next few years as Obamacare is repealed and replaced and a new system, whatever it is, takes its place.
What are your options if you miss open enrollment?
If you don’t have health insurance, you pay the higher of 2.5% of your annual gross income or $695 ($347.50 for minors). So your first option is to just pay that and live without coverage for a full year, which comes with a full set of individual issues.
Some people might opt for this. If you kept up with the news cycle last year, you heard about health insurance premiums skyrocketing. And while it’s true that, on the surface, not buying health insurance can be cheaper than just paying almost $700 for the year, that’s not taking into account if you actually do need to go to the doctor. Medical bills have been linked to 60% of personal bankruptcies, so having health insurance “just in case” can end up saving you a lot of money.
You can also buy health insurance outside of the open enrollment period if you qualify for a special enrollment period. Basically, if something happens that changes your coverage status, you can purchase a plan. Say you’ve decided to go freelance 100% of the time, but you had health insurance coverage through your (now previous) employer.
Well, you can buy your own plan now. Same goes for if you’ve aged out of your parents’ plan (you can be covered on their insurance until you’re 26), you got a divorce and were covered on your spouse’s plan, or if you got married or had a baby.
If you do qualify for a special enrollment period, you typically have 60 days to enroll in a plan. Otherwise, you’re just like everyone else who didn’t apply: Out of luck.
Colin Lalley writes for PolicyGenius, a digital insurance brokerage trying to make sense of insurance for consumers, where he covers personal finance, insurance, and reducing the risks in life.