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Ashley PoynterSep 155 min read

Understanding healthcare for freelancers

Updated: Sep 15

Healthcare for freelancers is in an entirely different state today than it was before the Affordable Care Act (ACA). Prior to the enactment of the ACA, freelancers that have preexisting conditions found themselves unable to get coverage or paying exorbitant rates for coverage. Even healthy freelancers struggled to find affordable, comprehensive choices. In many cases, insurers put caps on benefits.

While freelancers have broader protections today along with subsidies and tax credits to help pay for coverage, health insurance can still be expensive and confusing. This article looks at some factors to consider to find the best coverage for you and your family.

Understand the basics

The ACA mandates that states must either set up their own marketplaces or use the federal government’s marketplace for private insurers to sell health plans to people who are not covered by employer-subsidized health insurance. If you want to know where to find your state’s marketplace, you can visit Healthcare.gov.

In addition to providing central access for people to purchase health insurance plans, the ACA also offers subsidies to lower the cost burden of insurance. Those that fall below a certain income threshold may qualify for tax credits to help cover the cost of a plan’s premium.

One of the struggles for freelancers is determining how much income will be for the year. You can visit this page for guidance on determining and reporting self-employment income. It may also be difficult to determine how much coverage you’ll need for the year as no one can predict with any certainty how healthy or sick they may be in the future. This is where it can be helpful to have knowledge of key terms, which can provide insights into both how much coverage you’ll receive as well as how much you’ll be responsible for out of pocket.

It’s also helpful to be aware of the “metal” ratings applied to healthcare plans on the marketplace, which can give you a general sense for out-of-pocket costs. Platinum plans typically cover the most and have the most expensive premiums, while bronze plans provide the least amount of coverage and tend to have the lowest premiums. To summarize:

  • Platinum plans: cover 90% of out-of-pocket costs, you are responsible for 10%
  • Gold plans: cover 80% of out-of-pocket costs, you are responsible for 20%
  • Silver plans: cover 70% of out-of-pocket costs, you are responsible for 30%
  • Bronze plans: cover 60% of out-of-pocket costs, you are responsible for 40%

Understand the cost

Many balk at the cost of health insurance premiums, which can easily total in the thousands of dollars over the course of a year for freelancers. Yes, that is a lot of money; however, it does not compare to the total potential cost of not having insurance if something happens. One benefit of plans under the ACA is that out-of-pocket limits are capped at a certain point. For the 2020 year, the out-of-pocket limit for Marketplace plans is capped at $8,150 for individuals and $16,300 for families. For those that do not carry an insurance plan, no out-of-pocket limit exists.

When shopping for health insurance plans, consider all your options. If you earn less than 400% of the poverty level, you likely qualify for a subsidy that can significantly lower the cost for health insurance coverage. To qualify, you must purchase your health plan through your state's marketplace or the federal Marketplace.

If you don’t qualify for subsidies, there are other options. If you are under the age of 30 (or qualify for a hardship exemption), you may be able to purchase a catastrophic plan, which offers a lower monthly premium with a higher deductible. For the young and healthy, this can offer significant savings while still providing coverage in case of an accident or emergency.

Finding Decent healthcare

The search for decent healthcare doesn’t need to be a difficult one. While self-employed individuals may have faced challenges in finding affordable, comprehensive coverage in the past, Decent wanted to be a part of the solution. That is why we designed our Decent healthcare plans around the needs of the self-employed, including freelancers like you. We offer three unique plans that offer coverage for those that work for themselves:

All of our plans are centered around Direct Primary Care (DPC), which emphasizes the relationship between you and your primary care physician. As a result, all of our plans include free visits to your primary care doctor. Interested in seeing how Decent healthcare plans can benefit you? Get your free quote today.