If you’re a US-based freelancer, you’ve probably been tracking the congressional health insurance negotiations fairly closely. Regardless of your political views, health insurance is a huge issue for freelancers in the US. The reality is that there are people who cannot be freelancers if they cannot purchase individual health insurance coverage (meaning coverage not provided by an employer). The Affordable Care Act is far from perfect, but it was a huge boon to many freelancers. In the pre-ACA days, many Americans experienced a phenomenon known as job lock–the inability to leave their job for fear of losing their health insurance. Job lock’s cousin is entrepreneurship lock–the inability to be self-employed because of the inability to get health insurance–a real concern for many people before the ACA’s guaranteed-issue policies came to town.
How bad was the pre-ACA situation? If you were young, healthy, had no pre-existing conditions and didn’t plan on having children anytime soon, it was OK. My family of three paid for individual insurance for about six years after my daughter was born, and the costs weren’t pleasant, but they weren’t crushing either–perhaps $800 a month for the three of us. But if you broke that mold–let’s say you had pre-existing conditions, or multiple pre-existing conditions, or you were a cancer survivor, or you were pregnant, or you had huge health expenses and then your insurance company dropped you–the reality was grim, because insurance companies in the individual market could decline or drop whoever they wanted. I have freelancer friends who were declined for relatively minor pre-existing conditions that were well-controlled with medication (i.e. high blood pressure). Others stayed in salaried jobs that they hated, simply for the benefits. Others were quoted upwards of $30,000 a year for insurance for one person. The expression “uninsurable on the individual market” (should anyone ever have to hear that??) came into play, and some people simply could not be freelancers because of it.
At the same time, the number of self-employed Americans has been increasing, meaning that fewer people have access to group coverage through an employer, where the insurer is required to cover everyone. Studies and surveys differ on this, but various sources seem to agree that up to a third of Americans are either fully self-employed or don’t have access to insurance through an employer. Perhaps the most shocking statistic comes from the Kaiser Family Foundation’s white paper on pre-existing conditions: “We estimate that 27% of adult Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage under pre-ACA underwriting practices that existed in nearly all states.” That’s a pretty staggering figure, especially if you’re:
- a freelancer
- with pre-existing conditions
- over 26 and under 65, meaning you can’t be on a parent’s policy or on Medicare
- not married to someone who has employer-based health insurance that will take you
These days, we get our insurance through my husband’s employer. It’s not perfect either; the only plans they offer are high-deductible, and my husband had some significant health issues that–of course–wrapped over two calendar years and resulted in $12,000 in out-of-pocket expenses toward our deductible. But there’s a big difference between using your rainy-day fund to cover deductibles and fearing that you might not be able to purchase health insurance at all, or that your insurance could drop you for running up large medical bills.
To me, this issue is not political. If the current Congress can come up with a system that provides better coverage to more people at a lower cost, who wouldn’t support that? But a return to the pre-ACA situation where insurance companies could decline or drop anyone, or accept those people at premiums that no one with a normal income could afford, will have a devastating effect on all types of freelance-heavy professions. Lots of people dismiss the individual insurance market, as if it applied to five people in the entire US. Whatever your political views, tell your senators and representatives that the individual insurance market is hugely important to millions of people, many of whom may not be able to continue being self-employed without that coverage.