Tales of Freelance Health Insurance That Might Just Make You Queasy

This week, to paraphrase Bushy Sr., it's all about health insurance, stupid. I wondered whether I would be the right person to write about the system in the U.S., since I hail from the other side of the Atlantic, where we've had a free health-care system (albeit a creaky one) since 1948. I won't be writing about the entire issue (as we'll be here until about 2019 as I endeavor to understand how the system works—or doesn't), merely how freelancers and home workers cope with the thorny subject of health.

I spoke to five self-employed Americans. Most of them had been previously employed in a company and had been eligible for health cover. Two of them have only ever been self-employed or freelance—call it what you will. Not one of them had the same outlook on what seems to me to be the only issue for Americans that really matters right now.

In the end, the health-care solutions of these people were about exactly as scattered as the various versions of health-care reform proposed by your leaders. Freelancers, contractors, work-at-home types, whatever you call them—it seems they're fairly representative of the country as a whole. Their make-do stories might not amount to a clear answer, but here's hoping you might cut and paste your own rough plan from theirs.

I'm changing everyone's names and occupations because I think this is pretty personal stuff.

James, 31, is a journalist. He was on staff until a couple of years back, so he was covered by his employer. Now he gets his insurance through the Freelancer's Union, a portable benefits delivery system founded by Sara Horowitz in 2001. He pays $260 per month and $50 per specialist visit. Last year he had to have surgery, and paid $3,000 for a procedure that would have cost $50,000 if he had been without insurance. "I never appreciated health insurance, to be honest," he says. "Health-care problems seemed so distant, but now, from where I stand, you can really see the cracks in the system."

"I only got insurance because a friend was nagging me," he says. "And it wasn't too long before I came down with the condition that required surgery. So, except for a bit of luck, I'd be bankrupt right now."

Michael, 26, is, like James, a New Yorker—and a Freelancers Union member. He pays $295 a month. One of the firms he works for used to reimburse him, but when they moved to a new staff system, he decided to remain freelance. "I could've gone staff and gotten benefits but I would've had to quit (my other gig)." If he's too sick to work, Michael just has to suck up the lost revenue. Is he happy with the situation? "At this point, I just accept that I pay what I do. It's not that bad. I wish it was cheaper, but what can you do?"

So, there you go. Two single people with similar insurance set-ups, but with vastly differing opinions on it.

But what happens when you're a bit older or have a family? Pete, a copywriter and musician, is 52 and moved last year from NY to Austin. Originally a staffer, he hasn't been insured since he struck out on his own, in 2004. So, is he with the Freelancers Union too? "I haven't had insurance for many years." (Author's note: this statement made me make the sound that Scooby Doo makes when he's scared or confused.) "Yes, I'm technically screwed. I pay out of pocket for everything."

Was Pete one of those perennially healthy bods who has never even had a cold in his life? "I take psych meds, but I buy them from Canada," he told me. "My psychiatrist and I have a barter arrangement; I copyedit reports for him in exchange for therapy. I still owe my regular doctor money. It's pretty expensive."

So what stops him from getting insurance? "Laziness, I guess. I haven't been in Texas that long, so I haven't had time to look into my insurance options. New York has the Freelancers' Union, which has insurance, but they have stringent rules that I never qualified for." Is he worried? "I would be screwed if I got really sick. So I'm in denial in a way." What about Obama's health-care ideas? "It was a good plan until they started gutting it to appease the Republicans. I wanted the public options. I was holding out for a decent plan so that I could have insurance, but the public option was going to be helpful. But now I don't even know what the plan has in it, so yes, it is vague."

Pete misses the way that his staff job covered him on health issues. "I had great insurance with (my employer). The only thing they (the insurers) offered was Cobra, which allows you to pay steep fees to keep your insurance while you're in transition. But Cobra eventually runs out." And bites you on the arse, it seems.

As a child in Britain, my parents took out family-wide health insurance which covered us all. When I turned 21, BUPA contacted me and offered me a basic deal of £440 per annum, which seemed like a steal to me. Eighteen years on, I'm still with them, and pay £2,000 per annum for worldwide health-care cover. Well, I say worldwide: should I move to the U.S., my policy would increase. But I liked their initial advance to me. It's basically a way of keeping your existing, non-paying customers, and making them cough up once they are eligible. So why don't insurers in the U.S. do that? There are, after all, 50 million Americans who work from home, and so that would mean another 50 million or so insurance policies for them. And 50 million reduced-rate insurances is still ka-ching, no?

James again. "You'd think so, but there isn't a reduced rate, because your employer is the one subsidizing a lot of the cost. If you don't have a full-time employer, someone has to pay, and it's gonna be you."

Edwin, 36, is an editor in a New York, who has swung between being a staffer and freelancer. He's a parent to two small kids, of which the youngest was born on the eve of him getting a new job—with health insurance. "She was born before I got the job. We were scared as hell. Turns out, Medicaid covered the whole thing. It seemed too good to be true. But we did have her in a crappy, state-run hospital that was a nightmare, so maybe that was why."

Edwin is also a veteran of Cobra. "During a recent bout of unemployment/freelance, I was paying for Cobra from my last job. The cost was something like $800 a month, but Obama had enacted some emergency legislation that cut it in half. So, for a few months I was paying that. The fact that you can't find someone who's freelance and has a kid is probably telling."

Edwin's wife, who is pregnant with their third child, works on staff for a large firm in New York. They are both covered separately—his policy covers the family—while hers covers herself. "We have to figure out if it's cheaper for her to drop hers and come on mine."

Matthew is in his 50s and calls his country's health care "pathetic." A resident of the Midwest, he is a writer, broadcaster, and editor. Married, he has a teenage child from a previous relationship. His plan, which he describes as "shitty," costs him $250 a month. "It has a $750 deductible for outpatient, and $1,500 for hospitalization. Plus, it only covers 80%." Although a freelancer, he has a contract with a broadcasting giant. "I wish (they) would give a better deal, but this is about the best I could do. I negotiated with them." Matthew's teenager is covered by his ex-wife's husband's insurance, and his wife has her own plan.

To say that Matthew is miffed by his firm's attitude to insuring its workers is putting it mildly. "Companies are getting cheap these days. it looks like they're trying to keep everyone on freelance so they won't have to mess with health insurance. I'm just a contractor, not on staff. No email address, I gotta buy my own business cars. So I'm responsible for my own health insurance."

It seems that the die are not weighted in favor of freelancers at all. My pet theory is that insurance companies believe that freelancers are possibly more open to stress, because their income depends on themselves and them alone, the irony being that corporate culture is so much more stressful.

Finally, I'd like to throw the question out to the floor. Home workers, how do you insure yourselves? What do you think should be done by companies and the government to help people like us? After all, we do contribute our taxes to Uncle Sam's piggy bank. The most disturbing statement, I thought, came from James. "What makes me angry is that I have people who tell me, 'Well, that's your fault for not having a full-time employer.' Well, actually, no. There's no full-time jobs any more in our industry."

Image: http://www.flickr.com/photos/quinnanya/ / CC BY-SA 2.0

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2 Comments

  • Joseph Mowery

    Health insurance is expensive because healthcare is expensive. And guess what? People don't buy things that are expensive unless they really need them. We absolutely need an affordable option, and if you want it to work without taxing everyone ELSE, you need to require that people carry insurance coverage. I work in the industry, and I see people everyday who turn down coverage through their employers, because they think it is too expensive. Since they have decided to NOT spend their money on coverage, why should I be taxed to provide it to them? You know what we need? JoeCare. JoeCare starts as the baseline MINIMUM coverage that people need to carry. Will look alot like medicare Part A. You must carry this coverage minimally, and then you can buy up to better coverage. Employers should provide it, or be taxed when their employees get it somewhere else. You can even tell carriers what they have to charge for JoeCare, in certain areas, and let them figure out how to make $$ at it. Trust me, after doing this(benefits) for the past ten years, we need JoeCare.