Health insurance mistakes: what NOT to do as a freelancer
## 1. Not understanding health insurance jargon No one can blame you for not being an Encyclopedia Britannica of complex health insurance terms, but you should get a handle on the basics before diving in to purchase a plan. For starters, healthcare.gov is a handy resource for brushing up on common health insurance terms. We’ll help you out with a few, too:
- Coinsurance – Coinsurance is the total amount of covered health care services that a member is responsible for after the deductible is met. For example: If you have a plan that offers 20% coinsurance, you’ll be responsible for paying 20% of the costs after you meet your deductible.
- Copay – Almost every type of insurance plan listed above requires members to pay a co-pay when seeing a doctor. These can range from $10-$50 and can sometimes be applied to the deductible.
- Deductible – The deductible is the amount a member must pay for covered health care services before coverage kicks in. Deductible amounts vary widely and may fall anywhere between several hundred to several thousands of dollars annually. The deductible resets to zero at the beginning of the calendar year.
- Out-of-pocket maximum – This is the total amount a member is responsible for paying before the plan starts covering 100% on everything. This can easily get confused with the deductible, but they are two separate things. After you meet your deductible, you still have to pay coinsurance and co-pays until you meet the out-of-pocket maximum. After that point, your plan would cover 100% of all costs associated with care.
2. Not having health insurance
So you think you’re so young and healthy that health insurance is unnecessary? Think again. The Kaiser Family Foundation (KFF) reports that the number of uninsured people is on the rise, increasing roughly 700,000 to 27.4 million people in 2017. Health insurance costs hold the top stop for reasons why people go without health insurance. The problem with that logic is that, if something does happen and you don’t have coverage, you’re going to be paying a lot more than a premium would have cost.
As a freelancer, finding the buffer room in your (often variable) monthly income to pay for health insurance can be a challenge. We get it. But don’t let this get in the way of finding affordable, comprehensive, and reliable coverage. IF you go without, you risk:
- Avoiding proper healthcare – Without coverage, health care gets expensive. Avoiding health care, however, can cause existing health issues to worsen over time.
- Missing needed medication – Prescription drugs are expensive and rising in cost, often making them unaffordable to those without coverage. Missing essential medication can exacerbate health issues.
- High healthcare costs – Without health insurance, you face much higher healthcare bills than you would if you were covered by a plan.
- Inability to pay medical bills/debt – Without healthcare coverage, uninsured people find that they face medical costs they are unable to pay. Eventually, those bills get sent to collection agencies where it may impact your credit score.
3. Picking a plan on premiums alone
We all love low premiums, right? Maybe. Here’s the thing: just like everything else in life, you get what you pay for. If you are only looking for catastrophic or high-deductible plans, this tactic might make sense. However, if you are seeking comprehensive, affordable plans, you need to dig deeper.
Only looking at monthly premiums is a one-dimensional way to consider what health insurance will cost you. Premiums are just one part of total costs, so you’ll also want to see how much certain plans require you to pay in co-pays, co-insurance, and deductibles.
You also need to have a handle on your specific and unique health care needs for the year to understand how all of those things will impact you financially. For example, do you manage a chronic condition that requires certain routine medications and equipment? Do you require regular prescription medication like birth control?
Taking a more holistic view of health plans can give you a better idea of total anticipated health care costs for the year as well as what each plan may cover. Consider yourself the Goldilocks of healthcare: you don’t want to jump into something too cheap or too expensive. Look for something that’s just right for you.
4. Confusing preventative and diagnostic care
Under the ACA, Americans are supposed to have access to affordable preventive care. Most plans available through the marketplace cover a set of preventive services (think screening tests and shots) at no cost. That said, there are times when what starts as a preventive visit turns into a diagnostic one. This could mean you incur additional costs.
For example, visiting your primary care doctor for a routine check up is typically covered at no cost or for a low co-pay. On the surface, this is great. But if you end up complaining of knee pain at this visit and your doctor prescribes pain meds and additional testing, those could qualify as diagnostic care, which may result in additional costs.
Be sure to clarify with your primary care doctor or specialist at the beginning of the appointment to see what the costs associated with care may be. Also do your homework beforehand to see if there may be diagnostic costs associated with your visit. Most of this information should be available to you through your insurer’s website or help line.
Pro tip: Decent’s Pathfinder and Trailblazer plans both offer free primary care. That means that all services offered through your primary care doctor are covered in your monthly premium and cost you exactly $0 every time you need to see your doctor, no matter what the reason.