So, You’re Uninsured

You’re a freelance writer, a photographer, a visual artist, a master carpenter, a singer – or maybe you’re hatching the next great invention or innovative software program. Whatever your situation, you don’t have a “job,” and you don’t have health insurance. Maybe you had group insurance coverage at one time, either through work or a spouse, but are no longer eligible for coverage under your former policy.  You might have applied for replacement coverage, but were turned down due to a pre-existing condition.  Or perhaps you did the math on individual insurance premiums and figured that the cost was just too high, especially for the limited coverage you would receive.

Whatever your reason for going without health insurance up till now, the passage and confirmation of the Affordable Health Care Act of 2010 means that it’s time to rethink that decision.  Despite numerous attempts by Republicans in the U.S. House of Representatives to repeal legislation they and other opponents have derisively labeled Obamacare – and a Supreme Court challenge to its constitutionality – the law still stands. With the re-election of Barack Obama as President of the United States for four more years in the 2012 Presidential election, it’s clear that the signature achievement of his first term isn’t going anywhere.

Even with unanswered questions about state exchanges and expanded Medicaid coverage, full implementation of the Affordable Care Act in 2014 means that obtaining health care coverage will become much easier for one simple reason: no more exclusions for pre-existing conditions. Well, that’s great, you may be thinking, but there is still 2013 to get through. There are actually several strategies available that will allow you to obtain and retain group or reasonably priced individual health care coverage to bridge the period until the Affordable Care Act is fully implemented. And if you have a pre-existing health condition, Obamacare has you covered there, too.

Pre-Existing Condition Insurance Plan

The concept of specialized coverage for individuals with pre-existing health conditions is not new. Several states already offer high-risk insurance pools for individuals who are willing to pay for insurance but who can’t find a policy to cover them.  However, premiums for these high risk pool insurance policies are typically sky high.

By contrast to traditional insurance coverage offered to individuals in high risk insurance pools, the Pre-Existing Condition Insurance Plan provides health insurance coverage with premiums that are comparable to those offered to healthy individuals of the same age group. The Pre-Existing Condition Insurance Plan is an interim health insurance program designed to provide health insurance coverage to individuals do not have and cannot obtain health insurance in the private sector. The Pre-Existing Condition Insurance Plan will remain in place until the full implementation of the Affordable Care Act takes effect in 2014.   

Depending on where you live, the Pre-Existing Condition Insurance Plan is administered either by the United States Department of Health and Human Services or by the state where you live.  However, the federally-administered and state-administered plans are fundamentally similar in administration and qualification requirements: you must be either a United States citizen or living in the country legally, you must have a pre-existing medical condition and you must have been without health insurance of any kind for at least the past six months.

Group and Low Cost Individual Health Insurance Options

If you don’t have a pre-existing condition, the barrier to obtaining individual health insurance coverage is frequently not underwriting, but cost. Group health insurance may provide a more affordable option. Below are brief descriptions of non employer based group health insurance options for freelancers and other independent workers that will allow you to bridge the period between now and 2014, when the Affordable Healthcare Act is fully implemented.  These the options listed below represent a cross section of options rather than an exhaustive list. It’s worth your while to do the research to find a health insurance option that works for you.

  • Professional and Membership Organizations: Chances are that you belong to or are eligible to join at least one professional or membership organization that offers group health insurance to its members.  For instance, freelancers who live in New York, New Jersey and Oregon may participate in group health insurance plans administered by the Freelancers Union. Anyone over age 50 can join AARP and purchase that organization’s group health insurance coverage.  .
  • Local Chambers of Commerce:  Many local Chambers of Commerce chapters offer group health insurance coverage as a benefit to their members. Chapter dues are often low and sole proprietors are usually welcome to join. For example, a quick Internet search reveals group health insurance plans offered by local Chambers of Commerce located in Los Angeles, Montana and New Jersey.
  • Staffing Agencies: Back in the day, working for a temporary agency meant typing, filing and answering phones at a receptionist’s desk. Nowadays specialty staffing agencies exist for nearly every industry area, including writing and other creative fields. Many staffing agencies offer health insurance coverage for qualified associates, which usually means working a minimum number of hours or completing a specified number of assignments.
  • Small Group Health Insurance Plans:  Several states allow “group of one” or “group of two” options for group health insurance with mandated guaranteed coverage. If you operate as a sole proprietor or as a partnership, such plans offer an alternative to individual health plans that may translate into significant savings on premiums.  You’ll likely need to consult with an insurance broker to set up such a plan.
  • College and University Health Care Plans: Have you been thinking about returning to school, or at least picking up some classes? If you return to school full time, you may not have much time for much outside of your studies, but you will almost certainly be covered by the student health care plan, with access to the student health clinic to boot. However, even if you opt for a more manageable part-time schedule, you may still be eligible to purchase coverage, although your costs may be higher than those for full time students. Your college or university may also offer major medical or short term health insurance policies for alumni.
  • Study, Work or Volunteer Abroad:  This option is less of a stretch than it appears at first glance. Depending on your professional interests, a stint abroad can significantly enhance your credentials. Some volunteer organizations provide health insurance coverage for volunteers, although you may have to pay the premiums for your actual coverage. If you must purchase your own coverage, the underwriting requirements are often less stringent and the costs are lower for expatriate health insurance policies than for comparable domestic health insurance coverage. You can obtain coverage for various periods, ranging from a few days to two years or longer.

If you opt for health insurance coverage through an association or group, choose a group with a local chapter, if possible. You will want to take advantage of available networking activities along with purchasing insurance.  If the organization only seems to exist online, proceed with caution. You may be dealing with a phony organization that preys on desperate insurance bargain seekers. . Their materials can look convincing, but doing your due diligence will turn up dead giveaways that you’re dealing with a scam.

Even if the organization is on the level, be sure to read the fine print of the insurance policy before you pay for anything. Check out the details thoroughly. Does the insurance provide coverage that adequately covers any pre-existing health conditions you may have? What are the deductibles? Have there been complaints filed against the company with the Better Business Bureau or elsewhere?

Short Term Individual Health Insurance

If you’re under age 55 or so and generally healthy, you can probably obtain short term individual health insurance that offers reasonable coverage at something approaching an affordable monthly premium.  The underwriting criteria for short term insurance plans are often less stringent than those for policies designed to be permanent, and many policies allow you to maintain coverage for six months or a year.  If you obtain a twelve month short term health insurance policy in January 2013, you can maintain coverage for the entire duration until Obamacare kicks in.

If you are self employed and not eligible for group coverage through a job, a spouse or another source, your individual health insurance premium payments should be 100 percent deductible on your federal income tax returns. Even better, you do not need to itemize your deductions to take advantage of this tax break. This deduction is NOT subject to the 7.5 percent adjusted gross income limitation imposed by the IRS on many other medical expenses.

If you opt for purchasing short term health insurance, look for a policy that is eligible for an accompanying Health Savings Plan. A Health Savings Plan is a savings account stashed with pre-tax funds that is set aside to cover out of pocket health related costs. You must have an eligible high deductible major medical insurance plan to establish an HSA, and the IRS places limitations on what you can use the money for. On the other hand, unused funds in an HSA can be carried over to the following year with no tax penalty. Establishing an HSA along with obtaining a prescription discount card can help keep your out of pocket health related expenses under control.

Non-Insurance Health Care Options

If you cannot afford to pay for health insurance premiums, beginning in 2014 you may be eligible for expanded Medicaid coverage, depending on whether your state has opted in to the Obamacare plan. Even if your income is too high to qualify for Medicaid in 2014, you may be eligible to receive a subsidy toward health insurance premiums. Prices for health insurance premiums may also be lower because they will largely be controlled by health insurance exchanges run by the state or by the federal government.

In the meantime, your options for free or low cost health care are limited, but not nonexistent. The list below represents a handful of your best options for obtaining free or low-cost health care.

  • Hill-Burton Free and Reduced-Cost Health Care: The Hill-Burton program is the result of a 1946 law that allowed hospitals and other health care facilities to obtain low cost loans for construction and modernization. In exchange, the hospitals and health care facilities agreed to provide a percentage of their services at low or no cost to patients who would otherwise be unable to afford to receive medical care. There are presently about 170 facilities required to provide reduced or no cost services across the United States, the District of Columbia and its territories. However, Hill-Burton facilities do not exist in Alaska, Indiana, Minnesota, Nebraska, Nevada, North Dakota, Rhode Island, South Dakota, Utah, Wyoming or Puerto Rico.

    You may apply for coverage under the Hill-Burton act before, during or after receiving medical treatment. To be eligible for reduced or no cost care, your household income must fall within specified guidelines that vary by state. You cannot use Hill-Burton provided care to substitute for coverage that would otherwise be covered by Medicare, Medicaid or private insurance, or to pay for private physician costs.
  • Hospital Charity Care: During the 2012 presidential campaign, Republican candidate Mitt Romney was roundly criticized for stating that people who couldn’t afford health insurance could go to the emergency room for care. While his statement was misguided and insensitive, it did contain a kernel of truth. Offering emergency room treatment (and in-patient care) at no charge for uninsured patients who cannot afford to pay out of pocket IS indeed mandated by the Internal Revenue Service for nonprofit hospitals, in exchange for maintaining their not-for-profit, and tax-free status. However, like services available under the Hill-Burton act, patients must apply for hospital charity care.

    N.B. Although they are not bound by the same mandate as not-for-profit hospitals, many for-profit hospitals also offer charity care – the key is to ask.
  • Community Health Clinics: Many nonprofit organizations, along with several municipalities and counties, offer free or low cost health services to residents in a specific area. Services offered by community health clinics range from screening tests to acute primary care. Specialized clinics in some communities focus on ongoing treatment for specific disorders, such as AIDS. You may need to register with a clinic to receive treatment, although some clinics offer treatment on a walk-in basis.

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