Whether you’re a full-time freelancer or a part-time employee at an established organization, as an American you know that the health insurance struggle is real. Thanks to the historical accident that is employer-based health insurance coverage, until recently many of us self-employed, freelancing folks had to purchase individual health insurance coverage on a market that was pretty exclusionary. That is to say, any pre-existing condition you had was oftentimes excluded from recommended policies and if you were too sick you had difficulty getting any type of coverage.
In comes the Affordable Care Act (also known as “ACA” or “Obamacare”), a reworked version of a republican-executed health care system that was set up to as an attempt to provide health care coverage for more Americans at a more affordable rate. Granted, that term “affordable” was pretty relative and dependent on your medical history and the type of coverage you were looking for. However, close to 17 million Americans were newly insured under the system.
I’m not going to lie, Obamacare isn’t perfect, and its initial launch was downright messy at times. But, to be fair, a new, country-wide health insurance system is going to have a few kinks to work out initially, which is why having political leadership in place to iron out those kinks is so important. Unfortunately, we are currently working with an administration whose made it their mission to repeal Obamacare, and who has already started hacking away at the Act with a shiny, blunt knife.
So, what now? What’s the current state of the ACA and how does what’s going on in Washington affect our health insurance? And for those in our digital nomad community who are just getting into the freelance game, how should you go about choosing the right health insurance plan?
The Current State of Affairs
Some major changes have already taken place, as items pertaining to health care coverage were attached to the Tax Cuts and Jobs Act of 2017 (informally known as the “Trump Tax Cut”), which was signed into law on December 22, 2017. Whereas, other changes to the current health care system have been introduced through a bill that’s still making the rounds in Congress. Here’s what you should know:
- The Individual Mandate was repealed. This means that come 2019 individuals who choose not to become insured no longer have to pay a tax penalty. While this sounds like a fair deal, the risk is that fewer people will opt into getting insured, which means that there will be a less diverse pool of insured people (i.e., young, old, fairly healthy, very sick, etc.) to lower the market premiums overall.
- Subsidies still exist. If you’re a freelancer who is just starting out or limping into your second year of freelancing like me while broke as hell, the government will still be providing subsidies to help make up for the premium increases. However, those making a decent annual salary will bear the brunt of the premium increases (i.e., if you make over $48,000 as an individual or $98,000 per household).
- The pre-existing conditions mandate is still intact. As of right now, the pre-existing mandate that denies insurance companies the opportunity to deny an individual coverage or charge them a higher premium due to a pre-existing condition still exists. However, the current administration is looking to remove this protection.
- Introduction of an Age Tax. The introduction of an Age Tax means that individuals over the age of 46 would see a significant increase in premiums. Meanwhile, 60 to 64-year olds could see an increase of unsubsidized premiums amounting to $18,00 annually. In comparison, 20 to 29-year olds would only see an increase of unsubsidized premiums amounting to $700 annually.
How to Choose Your Coverage Wisely
Now that you’re up-to-date on what’s going on with the ACA, let’s talk health care plans and how to choose the best one for you.
- Step #1: Get to know the difference between the plans offered.
HMO, PPO, Medicare, Medicaid, all of it sounds like a jumble of acronyms and contractions. However, each of these terms points to specific plans that provide different kinds of coverage.
Health Maintenance Organization (HMO) Plans: These plans are generally cheaper than PPO plans, however, you must go to physicians within your plan’s network unless it’s an emergency situation. These plans can also feel limiting for digital nomads who often travel a ways from home and are not around to see the same in-network physician regularly.
Preferred Provider Organization (PPO) Plans: While on these plans you have the option of choosing to see either in-network or out-of-network providers. However, seeing out-of-network providers generally makes for a more expensive deductible.
Medicaid: This plan is state-run using federal guidelines and provides coverage for low-income individuals of any age. While patients pay nothing for medical expenses that are covered, sometimes a co-payment is required depending on the situation.
Medicare: This plan provides federally funded health care coverage if you are over the age of 65 or a person living with a severe disability regardless of your income. You typically pay for part of your medical costs through deductibles as needed.
Note: Some people are eligible for both Medicare and Medicaid and can be “double insured” by enrolling into both programs simultaneously.
- Step #2: Get out the latest income tax form you filed and see what’s good.
When enrolling into Obamacare you will be asked how much taxable income you made last year and what you expect you will make this year as a way of determining whether or not you’re eligible for a subsidy or to be enrolled in government-funded health care plan. You should also use your previous and expected income as guidelines to determine how much you’re able and willing to pay for health care coverage.
- Step #3: Enroll.
Go through the online enrollment process. Once you have filled out the questionnaire you will be given options as to what kind of plan you can enroll into, as well as what subsidies are available to you (if any). Sort through the plans and decide which one best fits the following: (1) your lifestyle, (2) your budget, (3) your medical needs.
Although open enrollment has ended for 2018, you might be able to obtain coverage during the Special Enrollment Period. You may also able to apply for Medicaid at any time during the year. Check here to see if you qualify.
Although obtaining health insurance through the current health care system can be an overwhelming and obnoxiously frustrating experience, it’s definitely manageable with a little bit of insight. Hopefully, this guide provided you with enough information to get you started!