Where to find affordable health insurance for the self-employed

Where to find affordable health insurance for the self-employed...There are some exciting life changes happening in my world. My wife, Linda, is "retiring" from her job at our church and coming to help me with managing CPF and some other entrepreneurial ventures. While I am really excited, I am currently wading through some of the health insurance options that are available to self-employed business owners and I now have a little better understanding of why some people use this health insurance issue as a reason to avoid self-employment. Lest you think I am some kind of expert on this topic, I will just warn you - I knew nothing about it yesterday and know just about nothing about it today. ;) I often begin writing an article knowing little about the topic and use the research as a method of educating myself....There are some exciting life changes happening in my world.

My wife, Linda, is “retiring” from her job at our church and coming to help me with managing CPF and some other entrepreneurial ventures.

While I am really excited, I am currently wading through some of the health insurance options that are available to self-employed business owners and I now have a little better understanding of why some people use this health insurance issue as a reason to avoid self-employment.

Lest you think I am some kind of expert on this topic, I will just warn you – I knew nothing about it yesterday and know just about nothing about it today. 😉 I often begin writing an article knowing little about the topic and use the research as a method of educating myself.

So yesterday I spent a couple hours just reading as many articles I could find about health insurance and what other self-employeds are doing out there. From my reading it is a challenge to find a great solution. Paying a lot of money seems the punishment for not finding a good option.

So because I haven’t nailed down what we are going to do, this is going to be a little bit of a brain dump of ideas I have come across so far…

I’ve always wanted to get an Health Savings Account (HSA) because of the nice tax benefits. In order to get one you have to have a high deductible health insurance plan – which would work out great for us, because we have a decent sized emergency fund built up and rarely visit the doctor.

However, we are looking at having kids sooner than later and from what I hear babies cost a little bit of money! And with a high-deductible plan we would probably be nickel-and-dimed for a couple years after conception.

Knowing babies could be in the mix, it becomes a balancing act of finding a fairly low deductible plan, but without going too low, because that could cost you more than your house payment each month.

Then you have the coinsurance gamble. This is the amount you pay (as a percentage) after the deductible is covered. You can get a much better rate by having a higher coinsurance amount, but it’d be a terrible thing to have a catastrophic illness while having a 40% coinsurance.

Get on a group plan

The one recurring theme I found, is that the best way for someone self-employed to save on health insurance is to be part of a group plan. I haven’t dug into all these options yet, but some of the ideas I saw mentioned were…

Alternative to health insurance

A while back I wrote about a Christian health insurance alternative called Medi-Share. They are a medical sharing group that has been at it since 1993. If you aren’t a Christian and don’t live by their biblical lifestyle – you won’t be accepted into the group. But, by being so strict on the standards of who is accepted, the members don’t have to pay out to cover a lot of expenses that normal insurance companies do (alcohol and tobacco related illnesses, abortions, STDs, etc.). Therefore, the members typically end up paying quite a bit less than they would for similar coverage with a health insurance company.

Getting Quotes

One website that I noticed kept on getting mentioned was eHealthInsurance – which is basically an online broker. You just go to their site and pick your specifications for what you are looking for in a health insurance provider and they provide a list of  providers which you can display by price, deductible, coinsurance, etc.

Normally, I don’t like sites like this because they aren’t well organized, but after spending about 30 minutes on it, I found it to be very helpful in my shopping. I found it was a lot quicker and easier to get a quote from them, than to go to most of the providers’ websites directly. Kiplinger’s apparently thinks the same thing, as they named eHealthInsurance their favorite health insurance website.

If you are looking for a health insurance quote yourself, you can get a quote just by selecting your state below below…


Got any suggestions?

So, that’s where I am after my day of research, but I would love to hear your thoughts. Have you found a great health insurance solution as a self-employed worker? Got any advice to offer me or other readers about it?

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  1. Christian Daily Devotional

    Great article. I’m glad you touched on this topic because eventually this will be something I will need to confront – insurance for self employed.
    I don’t know if you heard about “Anthem” but they offer Self Employed Health Insurance. You can check out their website here: http://bit.ly/500g7N

  2. Excellent article Bob! These are some great alternatives for the self-employed. I’ll have to research some of these non-employer group plans. It’s ironic that you wrote about this today, I just finished writing an article on health insurance for TheChristianDollar.com. Check it out here: http://www.thechristiandollar.com/insurance-essentials-health-insurance/
    I’d love to hear what you think could be improved! Have a great day sir and I’m looking forward to more great articles from you.

  3. Fanny

    I’m in the same situation. We want to start a family and we have an HSA from my husband’s job. The deductible is high so we need to have that amount in our account to pay for prenatal services. It’s challenging to save money in the account if you have to use it for appointments and medical care.

    eHealthinsurance is awesome. I used it when I was self-employed. I was going to write about this topic too. Thanks for the reminders of other health insurance options like from Costco.

  4. Try finding a local health insurance agent through the National Association of Health Insurance Underwriters: http://www.nahu.org/. I heard about them while listening to a Kiplinger podcast: Big Savings on Health Coverage. It was quite informative.

  5. Jason

    We have had a HSA for my wife and kid for 2 years now. The tax benefits are great. We plan on being pregnant again in 2011. That being said we know from experience that High deductible plans do not cover pregnancies, unless you really want to pay out the wazooo so in 2011 everyone in my family will be back on my work insurance which actually costs us more.

    What we find interesting is we are paying for services out of pocket. For my childs yearly check-ups the doctors office charges $75 for the visit. When we asked them what it would cost us if we didn’t have insurance, the cost droped to $45. We are being charged $30 extra just because they are having to file with insurance.

    • Bob

      Good comments everyone, keep them coming!

  6. [email protected]

    We’re in the same boat on health insurance. My wife also “retired”–involuntarily–and she had the coverage. We’re investigating as well, so no hard answers will be coming from our well!

    On babies, most of what you’re doing with them is bringing them to the doctor all the time, so you can still look into a plan with high deductibles if it provides coverage for a sufficient number of Dr. visits. Some will cover five or six or more, regardless of deductible.

    A lot (most?) of health plans will not cover maternity!!! (!!!) The ones that do usually have a waiting period, typically two years. But even having a plan without maternity may allow you to receive the plan discount, which can be huge. Our son had surgery in the fall, and 2/3 of the bill was discounted under the health insurance plan.

  7. Andrea

    You should check out HealthNet for people needing coverage in the Western states. (They just sold their NE operations to UnitedHealthcare) They are one of the few for-profit companies that offer coverage to veterans and military familes through an option called Tricare. Go to http://www.healthnet.com

  8. Patrick

    Congratulations on your wife coming home to help you with your business – how exciting!

    My wife and I recently did a search for individual health insurance as well and ended up getting a high deductible plan we found via eHealthInsurance.com. Overall, I was pleased with the experience and we purchased the plan. (Actually wrote about it a couple days before your wrote this; feel free to check out my thoughts on purchasing self-employed health insurance and other tips).

    One thing to look out for regarding individual health care plans – most do not include maternity care as a base option, it needs to be purchased as an add on. Some plans also have a waiting period for maternity care from the time you sign up (9 months or longer), so be sure to read the plan details before buying, and be sure to plan accordingly. If you are already expecting or want to do so soon, then consider COBRA benefits.

    An added benefit – many high deductible plans offer provisions for preventive care, and our plan covers all annual checkups and baby well visits with no out of pocket expenses to us. Your plan may vary.

    Feel free to e-mail me with any questions about our plan or other details.

  9. daveinphilly

    Don’t forget to get a quote from your local Blue Cross-Blue Shield as well. Here in the suburbs of Philly, they are very competitive and after using ehealthinsurance.com, I think I’m going to stick with my current traditional indemnity plan that I have with them. Deductibles are much less but the premiums are higher. But you don’t have any sort of gatekeeper to see a specialist. A trade-off. It’s hard to compare exact apples-to-apples. Although the HSA idea is attractive from a tax angle, I think it is best to wait and see if the HSA’s survive in Washington health reform.

  10. Gayle

    With the passage of the health care bill, this article becomes even more timely! Thanks for your blog and all the pertinent topics you discuss.

  11. Sherry

    I’m in the same self-employed conundrum, with the exception of having a pre-existing medical condition that is now well-controlled with some inexpensive meds. I was fully prepared to have this condition excluded from coverage… what I was not prepared for was to be rejected for coverage completely. I am actually a very healthy person!

    I will say I love e-healthinsurance, too! They are very convenient and are easy to compare plans. I have also received good advice when I called the 800 number. I have purchased short-term insurance from them, but have not yet found a policy that works for me for long-term because of my “condition.”

    My one caution to everyone about any of these current insurance plans is to look very carefully at the policies and benefits. For example, I found many of the lower cost plans say they provide $3 million in lifetime benefits, which sounds great if you end up in a coma or needing very intensive care such as for paraplegia. Look closer though, and you see there is a $50,000 per year limit which would be blown through pretty quickly given this situation. There were plenty of other less dramatic examples, but all left me feeling pretty disappointed with the small-print games these insurance companies are playing. I am also a provider of therapy services, and I see many occasions of clients thinking they have coverage but their fine print limits it to only a few diagnoses, such as speech therapy only for stroke patients but not children.

    Although I have looked into insurance a lot, I still feel very stuck. The time it takes to unravel this maze is incredible! I just recently applied to Medi-Share and was accepted, but am not fully comfortable with getting started with them (that discernment thing?). Now that I read about “shares” taking two years to get paid, it’s making me a little more leery. I guess I’ll have to jump back in to research regular insurance again 🙁

  12. Susan Marie Cibelli

    HEALTHY NY – It is the biggest secret in health insurance and I’m not certain why. As a small S-Corp I h ave been able to have awesome coverage and offer it to my employees for under 300.00 a month, including Blue Cross/Blue Shield. It is a NYS government program for people who employ uder 50 people, it covers everything except psychiatric. I’ve had it for years!

  13. Elizabeth

    Just a thought about maternity care: I have two children, one of which I delivered in an out of hospital birth center and paid for with an expensive plan through my husband’s employer. The premiums were outrageous and I still had to pay a portion of the bill. My second was supposed to be born in a similar birth center, but because of complications was born in a hospital. At the time I had a high deductible plan (because the employee plan got too pricey with kids) with no maternity. We paid the midwife and all routine birth costs out of pocket from our HSA, and, after the hefty deductible, the insurance company picked up the rest (the cost of the “complications”).
    Now, I had to do a LOT of homework, double-checking, and phone wrangling to get it all sorted out, and I still could have bought a new car with the money we spent, but the insurance plan ended up saving us many thousands of dollars on that hospital stay, even though we had no maternity coverage. And here is why: first, we got insurance rates on everything, second, we didn’t have to pay taxes on the money we saved in our HSA, third, all of the “complications”–after the large deductible, and I kept records and made phone calls about all this–were covered. I’ve had friends who have also bargained with the hospital and gotten reduced rates in return for paying cash up front (another benefit of having the money saved in an HSA). Also, from what I understand, in Florida at least, all insurance plans must cover well-child visits and immunizations 100%. So all those first year visits and shots were covered. And that adds up.
    We plan to have another baby soon, and we will probably go the same way again: cheaper pre-natal care with a midwife and pay for the birth from our HSA. Sure, it’s still a lot of money, but in my experience, no one but the government is going to pay for you to have a baby. The best you can do is pay attention and insist on making your own decisions about your health care, including knowing what things cost up front, making sure you are billed correctly, and understanding your insurance company’s policies.
    By the way. thanks for the info on Medi-share. I have been looking into it as an alternative to handing my money over to the insurance industry, but I haven’t felt great about it, either, for some reason. Your readers’ comments have given me some good information to ponder…

  14. Peggy

    Hi Bob,
    Just wondering – In the article you wrote about Medi-Share you said you had signed up and at the time had been a member for 3 months but had not submitted any claims. Are you still a member? Do you have any further information regarding your experience with this insurance alternative?