Welcome to Benefitshealthplan.com - Information on Health insurance for self employed people

I thought about running an ad like this when I first became self-employed in 1981. That day my credit standing at the banks went to zero, and my ability to afford insurance was nonexistent. I ended up going nearly a decade without health insurance or, fortunately, serious health problems. I got sick, of course, but managed. I made inquiries about insurance but found only plans I couldn't afford.

In 1991 my run of good health ended; a simple medical problem turned serious, physically and financially. But three painful months later, I also saw the first ray of hope concerning health insurance.

Smiling through clenched teeth, I had struggled through my first trade fair, promoting my business as an information broker. In a sea of 100 vendor tables at a nearby chamber of commerce "Business After Hours," I was the only information service. However, I was happy to be informed that this chamber offered health insurance to its members. It did not matter if you resided in the town or were self-employed--only that you belonged to the chamber.

FOUR OPTIONS

While recovering from surgery, I did online searches in Knowledge Index and Nexis and posted a message in the freelancer's section of the Journalism forum on CompuServe. I found that the market for health insurance for the self-employed was expanding rapidly. There are four possible avenues through which you can protect yourself and your loved ones from high medical bills.

1. Blue Cross/Blue Shield

They are everywhere. Blue Cross/Blue Shield is mandated to insure all people without regard to most of the criteria commercial insurers normally use. Blue Cross therefore often charges more because they can't refuse to cover those with (most) prior problems or who live in certain areas.

A one-person shop can expect to pay even higher rates, as if the self-employed are a higher risk than the common employee. Anyway, if you can afford it, Blue Cross is readily available.

2. Associations

Many associations now offer an insurance policy for their members, underwritten by a major carrier. If your business is eligible for membership in a chamber of commerce, local or otherwise, some of them offer health insurance through the United Chamber of Commerce.

The professional associations you join may offer you a group plan. For instance, I'm a member of the National Association of Science Writers. Though they offered a health plan, outrageously priced and since replaced, buried deep in their benefits is another plan from Support Services Alliance. SSA offers volume services to small businesses and the self-employed. Their plan is underwritten by U.S. Life, one of the nation's largest cartiers. Other writer's organizations (such as the Editorial Freelancer's Association and the National Writers Union) also offer plans.

One caveat about insurance offered through associations. Check with your state insurance agency about the health of the plan. Some plans aren't supported by adequate capital, or they're owned by a foreign company that fails to meet U.S. regulations. Others have been known to claim they are underwritten by a major cartier when the major cartier just does the paperwork.

3. Legidated Health Care Plans

Certain states, among them Hawaii, Vermont, Oregon, and Florida, are implementing their own "universal" health plans. If your state is one of them, you have a chance at some kind of affordable coverage.

Minnesota has begun Minnesota Care, a comprehensive program of state-subsidized health care. A four-person household with an income of $19,500, which is near to that of the average freelance writer, would pay $49 a month. Single adults such as myself have to wait until mid- 1994 to join.

New York passed legislation, to take effect in April, that will force commercial insurers to take all applicants, a la Blue Cross. However, premiums are expected to skyrocket. New Jersey, where I live, has passed a subsidized insurance plan. A household of four persons living on $33,500 would pay $105 a month, but how the state subsidy will be gathered is not known. Committees are now writing the rules for the plan, to take effect in 1994.

4. Commercial Insurers and HMOs

Colorado has a low-cost group plan called SCOPE, formed by employer coalitions, health-care providers, and philanthropic and medical organizations teamed up with U.S. Life. Coverage is available for small businesses, with 50 or fewer employees.

When I came across SCOPE in my research, I called the local branch of U.S. Life. I found the company had recently begun offering a plan called Med-l for self-employed persons. Other large insurance companies have plans as well, such as National Casualty's HealthGuard Plus.

AVOIDING WALLTECTOMY

With 311 these possibilities, which way should you go? First, eliminate insurers for any reasons that make you feel uncomfortable. Trust your instincts.

Second, concult a knowledgeable third party. Lost in the technobabble of the fine print, I dumped all my prospective policies on a nurse friend who regularly worked with insurers and their forms. Her judgments helped narrow the field.

Third, leave electronic messages for, or talk to, industry colleagues. I left messages on CompuServe and the National Association of Science Writers' private bulletin board. Some companies were universally panned or labeled pushy. Other respondents complained about "weasel" clauses that allowed the insurers huge leeway to not pay claims. Within reason, incorporate these judgments into your decision-making process.

Last, subject the surviving plans to financial considerations. How much are you willing to pay for monthly premiums and actual medical expenses. Consider the out-of-pocket expenses and the sum of the deductible and copayments (usually an insurance company will pay 50 to 80 percent of expenses up to a certain cap, such as 80 percent of $2,500), as well as the monthly or quarterly premiums.

I tend to spend a steady $500 a year on health care, from $75 office visits to winter cold remedies. That's a good deductible amount for me. Past crises taught me most medical bills can be paid in monthly installments. I generally could squeeze out an extra $100 a month during previous illnesses, so I figured a $1,200 yearly copayment amount would not bust my budget. Thus, I was willing to pay up to $1,700 in out-of-pocket expenses for medicine and any emergencies.

A monthly payment for one policy may get you only half the out-of-pocket costs on another. A great way to determine the best plan for your budget is to use a spreadsheet (see "Analyzing the Cost of Health-Insurance Premiums" below).

Unlike a decade ago, when I first started my search for affordable insurance, you can now sew up holes in your safety net. Governments, large insurers, and health-care groups are providing, willingly or unwillingly, affordable health-insurance plans for the self-employed. In today's political climate, where health insurance is a buzzword, expect more positive changes soon.