

Freelancers and health insurance - bengarvey
http://jenamiller.com/notes-from-a-hired-pen/reader-q-what-do-you-do-about-health-insurance/

======
jsiarto
This is absolutely true! I believe that the current structure and cost of
healthcare in the US is one of the largest detriments to entrepreneurship.
This is never brought up in political debates and is rarely talked about in
media. Before the ACA, providers would deny people applying for individual
coverage for the silliest pre-existing conditions and once you were denied,
you wen't getting healthcare anywhere (black list).

This was a huge struggle for me early on in my career--and it wasn't until our
company had a group (3+ people) that would could affordable plans. Even then,
we were paying over $1000/mo to insure 3 healthy 26-year-olds.

You can read more about my story here:
[http://thecreativecareer.com/2009/03/30/us-healthcare-
system...](http://thecreativecareer.com/2009/03/30/us-healthcare-system-
undermines-innovation/)

EDIT (In case the above is TL;DR):

"This means that many entrepreneurs and innovators—those of us paving the way
on our own—are left with costly insurance or no insurance at all. Because of
the limited choices for affordable healthcare, the decision to become an
entrepreneur looks increasingly less attractive. Even if an individual is to
secure an individual policy, the rates will be higher, and the coverage will
be less than policies available through an employer."

~~~
mw63214
I've always thought it would be cool to have employers offer "MAKEation" days
instead of vacation days. This would be time accumulated to take a month, a
quarter, or even a year off to build your own product/service/dream. The
company offering this would also provide mentors, resources, and periodic sit-
downs to discuss investment into your new product/service/dream. You maintain
your insurance throughout this time also. When you return to work, instead of
having a meeting to "be brought back up to speed", you discuss with managers
how to integrate your new business into the company, what you learned, and
then make a presentation to the rest of your business/department. The idea
being that every business can be it's own incubator of sorts. I would imagine
this would attract top talent to your company, allow for new sources of
revenue, keep your business fresh, and promote innovation among those that
might otherwise be more risk-averse.

~~~
msbarnett
"In addition to" vacation days, I could see it, but in lieu of? No thanks.

Taking time away from work is an important part of my mental health. The last
thing North American culture needs is another way for corporations to replace
leisure time with yet more work.

------
jfb_1973
Not to make this too political, but this is the big issue no one talks about
when discussing healthcare. For many small businesses, providing health
insurance is a major cost, and a major distraction from their core business.

Whenever I talk to my conservative friends I try and point this out. Many
entrepeneurs with kids who might be out there 'creating jobs' can't because
the healthcare industry owns our politicians.

~~~
kgrin
I've said this a few times here, and I'll say it again - I was able to start
two businesses in Massachusetts precisely because of the MA health reform,
i.e. "RomneyCare" (which, for the underattentive, has roughly the same model
as the Affordable Care Act, a.k.a. "ObamaCare").

~~~
Anechoic
As a self-employed Bay Stater, I am in complete agreement. I have a self-
employed buddy in Hartford, he applied for health insurance with a CT agent.
The questionaire he had to fill out for the application asked if he had ever
felt depressed - not diagnosed as clinically depressed, just if he had ever
been depressed. Well, as anyone who has ever worked for themselves can
understand, it's hard to not ever experience a moment or two of depression. He
answered honestly 'yes'; the agent told him that counted as a pre-existing
condition and he was denied coverage.

I am so grateful that is something I didn't have to deal with on MA.

~~~
markkanof
Not just those who are self employed, I think pretty much anyone that is human
has probably felt depressed at one time or another. This seems similar to all
the pharmaceutical commercials where they try to convince you that you need
medication if you have ever felt tired, sore, nervous, etc.

It really does seem like a huge distraction from building a business that not
only do you have to find and pay for health insurance, but that you have to
run a gauntlet just for the opportunity to possibly be able to buy insurance.

------
Spoom
Health insurance coverage, primarily for my wife, is one of the biggest
reasons I have a full time job right now instead of expanding the contracting
I was doing previously or trying to start a business. For various reasons, she
is nigh-uninsurable, and she's working two part time jobs, which of course
offer no health insurance whatsoever. When I was contracting, we had two
separate private insurance policies, with a combined deductible of something
like $6,000.

The bolded point at the top of the article is absolutely true: If you cannot
afford health insurance, you can't afford to freelance. I often wonder if
being shackled to a job by the specter of being uninsured isn't built into the
system on purpose.

~~~
jsiarto
"I often wonder if being shackled to a job by the specter of being uninsured
isn't built into the system on purpose."

I've often wondered this too. It just seems so asinine that we tie healthcare
to the employer--it's bad for employers and employees.

~~~
Dove
I don't think it was intentional. My understanding is that getting health
insurance through your employer became a major thing when wage controls during
World War II prevented employers from competing on salary. It remains a major
thing because it enjoys a status as non-taxable income (also dating from World
War II).

But even if it was accidental, it is morally perverse. For anyone with a
serious illness, you can turn the statement around -- "You can stop working
for me, but then you won't be able to get the medicine you need" -- and it
sounds a lot like slavery.

One of the things that's perverse about it is that medical "insurance" is
handled on a monthly basis, rather than on a per-diagnosis basis. Think about
how insane that would be in another field. What if car insurance paid for
things on a monthly basis rather than a per-accident basis? What if life
insurance worked per-month rather than per-death?

My dream health insurance plan would insure me against the _possibility_ of
getting cancer -- and if I was diagnosed with it, it would be their
responsibility to cover treatment, not just in any month in which I paid my
premiums, but for the lifetime of any disease discovered while I was current
on the plan. My dream health insurance plan would be willing to help me insure
against _variations in the cost of treatment_ for pre-existing conditions, but
for conditions I truly couldn't pay for, would refer me to a charity.

I'm of the opinion that the misalignment is a result of _businesses trying to
keep employees healthy_ rather than the natural result of _individuals
mitigating risk_.

The link between health insurance and employment needs to be severed
_yesterday_.

------
dazzawazza
I'm a UK resident and I've never thought about any of those things, ever. I
just take so much for granted.

I just do what I want and know I am covered for everything. We really do live
in completely different worlds.

~~~
rada
I have several friends in the UK and Canada and they tell me that universal
coverage is more comparable to the US situation than everyone thinks, for
several reasons.

If you are healthy, it's a wash because, well, you are healthy and it makes no
sense for you to have health insurance at all, just pay out of pocket for what
little you need. If you are sick, it's a wash because there are waiting lists
and eligibility requirements, so they (my friends) all choose to carry extra
insurance, for which they pay out of pocket, just in case by the time they are
able to get that fancy heart surgery, they may no longer be alive.

What is your take on that?

Edit: Curious that all the responses so far are all about _money_. Surely
going bankrupt beats dying because you never got that life-saving surgery on
time?

A less dramatic example: I just had a wrist fracture. According to google, if
I were a Canadian or a Brit, I would have had to walk around with a broken
wrist for roughly 2.5 months (official average wait times).

I am not saying the US healthcare system is not broken. Of course it is. I am
just saying universal coverage is not all it's made out to be either. At the
end of the day, if you want good healthcare, you have to pay.

~~~
muhfuhkuh
The difference is that there aren't 1 out 6 people (50 million) without health
insurance in the UK and Canada. Another difference is that no one in the UK or
Canada would ever have to go bankrupt trying to get that "fancy heart surgery"
or "fancy cancer treatment" or "fancy kidney transplant".

"just in case by the time they are able to get that fancy heart surgery"

And, the 50 Million people who could _never, ever_ hope to get that fancy
heart surgery because they can't afford the surgery _or_ the insurance (or
don't qualify)? What of them?

Saying they are comparable in any way except "doctors perform treatment on
patients in a licensed and regulated manner" is reaching.

~~~
rada
1-in-6/50MM without health insurance is not as straightforward a fact as it
seems. Not saying there isn't a problem, just pointing out a few
considerations:

1\. Insurance is not the same as coverage. Plenty of Americans who do not have
health insurance are covered through various programs for children, the
elderly, veterans, etc.

2\. Insurance is voluntary, and many people who can in fact afford it, simply
choose to spend money on "stuff", including that sacred cow of american life,
home ownership.

3\. The statistics for the uninsured (like your 1-in-6 number) include the
elderly, the illegal immigrants, those who are uninsured only part of the
year, and other groups that skew the results.

4\. If 50MM (although I dispute that number as per above) cannot get the heart
surgery because they don't have any coverage but the other 250MM can, it's
better than, say, 200MM not being able to get the surgery because of waiting
times or ineligibility. Of course, those are totally made up numbers, I am
just making a point.

------
Dove
It's not health insurance, but for day to day health _care_ , anyone in
Seattle paying their own way should consider <http://www.qliance.com> .
Together with a (very) high deductible plan, I was able to get insurance and
primary care for myself at around $100/mo.

The main selling point is the excellent access to care, though. When your time
is money, you don't want to be bouncing around between three doctors for a
month to treat an allergy that prevents you from sleeping. When I was on
Awesome Traditional Insurance when I worked at BigCo, it sometimes took over a
week to diagnose and treat a simple problem that was preventing me from
working. With Qliance, I've gone from call-with-problem to prescription-and-
plan-in-hand in under 3 hours. That's a big deal for a freelancer.

I understand there are other organizations around the country functioning on a
similar model. You can google Direct Primary Care to find them.

~~~
jsiarto
What happens if you get _really_ sick (cancer, etc.) or hit by a bus?

~~~
klbarry
For a young person, improbable illness is probably best handled by bankruptcy.

~~~
calvinlough
This must be the American way of thinking. Doesn't sound like a good plan to
me.

~~~
slurgfest
This isn't "the American way of thinking," it is a response to the state of
the American system. Although casual, yours is a rather bigoted statement.

~~~
pessimizer
It's not bigoted, just wrong. Requires a familiarity with US law to know why
it's wrong, though. There are some ideas and beliefs that are more common in
the US than in other places, just as there are particular ideas and beliefs
everywhere that are more common there than other places. Don't lower the bar
on bigotry.

------
zzzeek
<http://freelancersunion.org/> ?

That's what everyone in NYC uses, at least. I've been on and off of it for
years without any issues, definitely the cheapest option here.

------
ilaksh
The reality is that its not as easy as that.

Its not like "oh well, I can't be a freelancer because it doesn't provide
healthcare, so I guess I am forced to just take that $90,000 a year job with
full benefits."

The reality is, and I know I'm not the only one, that it can be much easier to
find "freelance" or "contract" work than full-time employment with full
benefits. And the alternative can often be zero income, because unemployment
insurance doesn't cover a lot of circumstances, and it really doesn't apply
(or shouldn't) when you can easily pick up a "freelance" or "contract" job.

The closest thing to 'full-time with benefits' that I have had (recently) has
been 'contracting' jobs through staffing agencies, and there were no useful
health benefits. Actually they had sort of a token health insurance, but it
wasn't good for anything.

My health condition makes it harder for me to pick up and stick with one of
these supposed full-time with benefits jobs that would probably be huge a
waste of time anyway. I have a startupy idea and sort of a businessish that I
am working on, and they are just much more useful ideas than most jobs I could
pick up. And almost all of the most joblike jobs I have ever had have involved
bosses who didn't know what they were doing wasting my time, office politics,
and usually a few completely useless coworkers who I couldn't stand.

So I have been doing the "freelancing" thing, and even though the budget for
this latest project basically has been on fumes for many months and I have to
work for peanuts and can't afford healthcare, if I did manage to find a
regular "job" after we get our new version into production, I don't think that
would really be a win. It would suck all of my energy and time out just to
support some asshole's lavish lifestyle on the basis of what would (odds on)
just be a business based on some spammy bullshit marketing hacks or some other
way to suck money out of the economy without providing any real benefit or
innovation. Literally the only reason I would do that would be to take
advantage of the healthcare after X months, assuming it somehow covered pre-
existing conditions.

My hope is that the next day gig will have a better budget, and also that I
can finish the startupish thing and that will provide money for me in a way
that is not a waste of my time and allow me to eventually get rejected for
health insurance and then reapply to the other California program and then get
the insurance and then finally get my Nissen fundoplication.

------
ryanwaggoner
Important! Overall a good piece, but one glaring inaccuracy: if you are self-
employed in the US, you _can_ deduct your health and dental insurance premiums
_without_ needing to reach the 10% of gross income threshold. The 10%
threshold [probably] does apply for health care costs other than premiums [1].
Assuming family premiums of $1k / month and a marginal tax rate of around 40%
(which may be low after state is taken into account), being able to deduct
your premiums is worth about $5k / year in tax savings, so this is not a minor
detail.

Source:
[http://www.irs.gov/publications/p535/ch06.html#en_US_2011_pu...](http://www.irs.gov/publications/p535/ch06.html#en_US_2011_publink1000208843)

1\. Depending on whether you setup an entity through which you do freelance
work (and what type), you may be able to setup a plan that allows you to pay
for healthcare expenses with pre-tax dollars, even if you don't reach the 10%
threshold. See your friendly CPA for details.

~~~
Vivtek
Itemization is where you can deduct out-of-pocket if it gets high enough, but
you are correct.

------
ereckers
From the post: "If you cannot afford health insurance, you cannot afford to
freelance."

I'd say that's true (in the US). Health insurance is just but one cost of
working for yourself. Since freelancing, I've found that I've been bumping my
deductible up over the years to keep up with the 15% YOY price increases, but
it is what it is, "catastrophic" insurance. I'm definitely not covering
acupuncture.

One thing I always wished there were was a pool for sole proprietors, which
would allow you to negotiate better terms, just as if you were a large
company.

It's starting to look like this might be part of ACA with the creation of
state run exchanges, or at least I hope that's a possibility, so it will be
interesting to see how that turns out.

~~~
jsiarto
I always thought this was a smart idea. Lump all the single biz owners
together and buy coverage as a mega-group. That makes way too much sense to be
considered...

~~~
count
What's wrong with this idea? I figured that's how many folks did it?

~~~
jsiarto
It's not possible... You have to be a business, non-profit, etc... You can't
just be a bunch of random people. Even if you found a group, you'd need to put
together some legal structure to make it work.

If you're starting your own company, the last thing you want to worry about is
starting another entity, finding a group and buying healthcare--you won't have
time for real work.

------
rwhitman
Health insurance for healthy people without kids shouldn't be a deterrent to
freelance. Self employed health insurance is generally relatively affordable
and easy to get, provided you are in good health and don't have any
dependents.

If you have kids or health problems it might give pause but there are options
- you need to attempt to get on a group health plan of some sort. Here in NYC
we have freelancer's union but a little known trick I learned recently is that
in most cities you can actually use the health insurance plan associated with
your local chamber of commerce, which they offer as an enticement to joining.

~~~
rwmj
This is such a silly thing to have to worry about. You're starting a company
but first you have to spend a day or two along with a bunch of money finding a
group health insurance plan (whatever that even _means_ ).

When I started a company in the UK, I didn't have to consider this.

~~~
TheHegemon
_You're starting a company but first you have to spend a day or two along with
a bunch of money finding a group health insurance plan (whatever that even
means)._

I wish it were that easy. You also have to figure out if there even any
doctors nearby that will accept your insurance.

We currently have to drive around 30mins-1hour to take my newborn to the
doctor, and of course only during work hours.

You also have to deal with the fact that insurance companies mess up, a lot it
seems. We've had to deal several times with our insurance mistakenly denying
coverage and have to fight tooth and nail just to get them to pay it.

It's incredibly alarming to come to a $9000 bill in your mailbox because
someone accidentally put the wrong ID number while typing.

------
sirmarksalot
"I live in New Jersey, which is a fair coverage state, so I’ve never had to
deal with being rejected from a plan because of pre-existing conditions."

This is a huge omission. If you don't live in a fair coverage state, you have
a high chance of being ineligible for individual health coverage based on
preexisting conditions. Preexisting conditions include migraines, depression,
and benign conditions with scary-sounding names, like "subaortic stenosis."
There was a Planet Money interview recently with an insurance broker who
generally rejected 50% of applicants. Granted, this selects for people who
think they need health insurance, so the actual number may be a bit lower, but
it still stands to reason that a large number of people are getting denied
coverage.

If you don't fit the platonic ideal of "healthy," you may have no choice but
to work for "the man."

------
mistercow
This article rests on a potentially false premise: that you are likely to find
a job that provides health benefits in today's economy.

~~~
jsiarto
While this is true--any skilled position at a major employer will offer health
coverage. I have a full-time staff of 3 people. If I didn't offer health
insurance, I'd have a full-time staff of 0.

EDIT: Hell, if I didn't offer health insurance, I wouldn't work for me...

~~~
mistercow
And whether you can get a "skilled position at a major employer" depends
heavily on where you live and the job market there as it applies to your skill
set. Remember, the current job market is such that we have people with college
degrees leaving them off their resumes when they apply to jobs so that they
aren't rejected as "overqualified".

------
filth
Starting in 2014 it will be far cheaper for many to pay the health insurance
tax and enroll for coverage as necessary.

------
zerohp
I'm leaving my job in 2 weeks. I'm planning to get insurance through ACM if
it's cheaper than COBRA.

<http://www.acm.org/membership/insurance>

------
enraged_camel
This probably applies to start-ups as well. I wonder how many would-be start-
up founders changed their minds after realizing they would not be able to
afford health insurance without a full-time job.

Reminds me of an article I read last year about how there are more start-ups
in Norway because the country has a really wide and extensive social safety
net, so people don't have to worry about hitting rock bottom if they quit
their job to pursue their own endeavors.

~~~
slantyyz
I'm lucky to live in Canada which has pretty decent health care, but I looked
into supplemental health insurance (for dental coverage, etc) when I started
contracting, and the premiums for the services you got were just ridiculous.

The annual premiums were way more than I would ever spend, and I would have to
be paid in for three years before I would even get any dental benefits.

I ended up going without supplemental health insurance until I got married,
upon which I got coverage under my wife's plan.

~~~
msbarnett
Who were you getting supplemental insurance through? Blue Cross kicks in
dental after a couple of months, from what I recall.

~~~
slantyyz
This was several years ago, but Blue Cross was one of the several companies I
looked at - the policies were pretty much the same across companies.

I ended up not getting any. The only thing I was looking for was dental, since
most basic health care is covered by the province. The rates I found were
around $2K a year, easily more than I would normally spend, and when I read
the fine print, I couldn't get comparable dental coverage to my previous full-
time job without having been paid in for 24 months.

