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Health insurance options for the self-employed

Thinking of cutting ties and working as an independent? Chances are, you've wondered if you can afford the health insurance premiums. We'll show you some helpful Web resources to link you with policies designed for the self-employed.


One of the biggest concerns of consultants contemplating going out on their own is, “Where will I find and how will I afford health insurance?”

But contrary to popular opinion, it isn’t impossible to get health insurance on your own, and neither is it always prohibitively expensive. And remember: You can deduct a percentage of your health insurance premium through your business.

In this article, I’ll give you some advice on how to save money by streamlining your plan to suit your needs, and I’ll share with you several Web sites with links and specifics about a variety of plans for both health and dental insurance, as well as one that helps you get lower rates for nonreimbursed treatments.

How do I find individual health insurance?
Obviously, if your spouse or significant other can add you to their employer plan, that’s probably your least expensive route to insurance. But if you aren’t so lucky and need to find your own plan, you will need to talk to an insurance agent in your area. You can find a directory of agents in your state through the Insurance Information Institute. Click on the Organizations link, then on the Directory Of State Insurance Organizations. Then click on your state for a list of agents near you.

Although you don’t have to be part of a larger group to obtain insurance, this can reduce your insurance premiums. If you belong to any professional organizations, find out if they have an insurance plan you can join. If those organizations don’t offer insurance benefits, ask family members—especially parents—about any organizations they belong to that would allow for the addition of relatives to their insurance plan. (Military organizations, in particular, can be helpful.)

How can I cut my insurance costs?
Individual insurance can be expensive, but there are methods you can use to cut your costs. To keep your costs down:
  • Choose a plan with a higher deductible. Typically, with high deductibles, co-payments for prescriptions, office visits, and emergency-room visits are lower. If you’re fairly young, in good health, and have the cash reserves to comfortably cover your high deductible in an emergency, this can be a good option for keeping costs down. But if you have a condition that requires you to make frequent office visits, this would obviously not be the best choice, as you’ll want to keep your out-of-pocket expenses low.
  • Carefully assess your medical needs, and then find a streamlined plan that primarily addresses just those needs. For example, if you don’t plan to have children, a plan that excludes pregnancy coverage can save you money. When you do need extra medical care, you can use a service that covers out-of-pocket expenses (such as HealthAllies, which I’ll discuss below).

eHealthInsurance.com
At eHealthInsurance.com, you’ll find a range of plans for individuals, families, and small businesses. But eHealthInsurance.com doesn’t offer insurance directly; rather, it provides detailed information on many plans from a variety of insurers. For most plans, you can request an instant quote online.

Finding the right plan is simple with eHealthInsurance. First, click on what type of coverage you’re interested in—individuals and families, small group, or seniors—and fill out a short form, including your ZIP code, your plan preferences, when you’d like coverage to begin, and the gender and birth dates of all those to be insured. EHealthInsurance.com will then show you benefit and price comparisons between plans, and you can also check whether your doctor is affiliated with any particular plan. Once you select a plan, you can then apply online.

Of course, not all plans are offered in all states. An excellent feature of the site is the variety of options you can set for preferences: You can have the site list all plans or show only indemnity, MSA, or PPO plans. You can also set your maximum deductible and office co-payment amounts. Once you specify this information, you’ll see a list of all plans that fit your criteria. From that list, you select potential plans and click to see the side-by-side benefit and price comparison.

Healthaxis.com
Healthaxis offers its own plans as well as a variety of plans from other carriers. In addition to plans for individuals and small groups (up to 50 employees), Healthaxis offers these options:
  • Short-term medical: These plans are great if you’re between jobs because they don’t require you to stay within a network, which allows you to choose your own doctor and hospital.
  • Flex-term medical: Similar to short-term, flex-term also allows you to keep your own doctor. You can get coverage for up to 12 months and then renew your plan for up to three consecutive 12-month periods.
  • Accidental death and dismemberment: Offering coverage from $10,000 to $50,000.
  • First-diagnosis cancer: Providing $10,000 cash when a covered person is first diagnosed with cancer, with no restrictions on how the money is to be used.

Healthaxis lists carriers and their plans, and you click on each for policy information. For a $6.95 monthly premium, the company also offers supplemental dental, vision, and prescription coverage plans that provide lower prices at participating pharmacies.

HealthAllies.com
To minimize premiums, you may decide to go with a plan that has a high deductible or that omits coverage for certain expenses. If that’s the case, you may want to also look into HealthAllies, which you can use as a supplement to or even instead of health insurance. You don’t pay any premiums or annual fees to HealthAllies; instead, you go to its network of doctors, clinics, and hospitals and are billed 10 to 50 percent below standard charges. You also pay a transaction fee to HealthAllies when you use its service.

HealthAllies negotiates reduced rates on treatments that are usually not covered or only partly covered by insurance, such as vision, mental health, laser eye surgery, fertility treatments, and alternative medicine. The service offers reduced rates by allowing doctors to attract new patients without having to hassle with managed care, preapprovals, and payment delays. HealthAllies may also be able to arrange reduced rates with a nonlisted provider.

Use the HealthAllies site to search for a doctor, clinic, or hospital. You can search by name or specialty within a certain distance range of any ZIP code. The site also offers helpful guides to help you understand the charges and fees on your medical bills, including one for hospital bills that explains the two-part billing used from almost all laboratory work. HealthAllies also offers a service called WebBillCheck, which scans your medical bills for errors and overcharges. For a fee, the service can then have those mistakes corrected or negotiate reductions in your bill.

What are my dental insurance options?
The best choice for dental insurance for the self-employed is Delta Dental, which is accepted by a network of dentists across the country. The co-payments for most services other than basic preventive services are fairly high, often 50 or 70 percent. So, unless you anticipate having extensive dental work, you might want to simply pay your dental expenses yourself and avoid premiums. Most insurance plans will cover dental care necessary from an accident. You can also check into the dental plans detailed at HealthAllies.

Meredith Little wears many hats as a self-employed technical and travel writer, documentation consultant, trainer, business analyst, and photographer.

Are you an independent consultant? How do you pay for health insurance? Are consultants better off joining a firm to avoid the hassle and the expense? Post a comment below or send us a note.

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