What Obamacare Means For The Self-Employed, The Startup Worker, The Freelancer

The Affordable Care Act kicks in today, and President Obama's shake-up of the system could well mean a change in the risks you take in your professional career. Here's why.

Today is the first day of what could be a long and happy life for Obamacare, the president's stab at making cheaper health care available to more people. It's a policy that may mean big changes for you—especially those of you who are freelancers, self-employed, or work for a startup. Medical insurance has long been a contentious issue and can easily determine which path a person takes in his or her professional life—I mean, if you had a partner and three children, you might feel more comfortable keeping your job of 10 years with a generous family health policy, rather than jumping ship to work on that startup. Three years ago, I wrote about the issues facing freelancers and those who have swung between self-employment and salaried posts. None of them were particularly happy with the situation. So, will the changes to the health system help them?

If you buy your own health insurance

You can now go through the Health Insurance Marketplace to find the best plan for you. You might find you are eligible for a little bit of help from the government—it's worth using this subsidy calculator to find out. At the end of this year, all medical insurers will be forced to cover their policyholders for emergency treatment, maternity care, and hospitalization. Also included are prescription drug costs, rehab services, lab services, pediatric services, and all sorts of other things that people often find a drain on their income.

If you're uninsured

You need to sign up for today's changes under the law and buy insurance. If not, you may be penalized via tax penalties or by a fine—which will increase, year by year. (You too may be eligible for a subsidy.) Pick a plan—it's worth remembering this: The more you pay up front, the less you pay monthly. This could also mean a wider pick of health care providers. You may also be eligible for either Medicaid or Medicare.(Veterans are also covered under the new legislation.)

If someone else deals with your health insurance

If you're covered by your parents' health care plan, you need do nothing until you hit 26 years of age. Then you're on your own, buddy. And if you're covered by your spouse's plan, then you need him or her to see if the changes will affect you, as the Affordable Care Act has made many insurers change their policy toward their members' better halves. The president's changes to the health care system have paved the way for all sorts of new systems and innovation in the sector. Here's Oscar, a health care startup with an impressive, tech-savvy bunch of employees, including former Googlers, and Microsoft and Tumblr employees. It launches at the start of next year in New York under the aegis of Joshua Kushner. And there's one aimed at startups needing to offer their workers some sort of health security—probably just as much to get talent to come and work for them as for altruistic reasons. StartupInsurance is an offshoot of the Young Entrepreneur Council and will make a fee from each client it refers to the health care providers.

There is no doubt that the new legislation will help the needier and those freelancers who couldn't find an insurer to cover them without shelling out a small fortune each month. Perhaps Pete, who I interviewed three years ago, might find life a bit easier. "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." Do you now?

[Image: Flickr user Puuikibeach]

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67 Comments

  • Barb Schultz

    I've browsed through a number of these comments and I'll share this with you: my monthly coverage is now *only* $865 because I changed plans to reduce the monthly hit to below my mortgage payment. I am healthy, have never had a substantial claim to my insurers, and yet have ben experiencing the routine of nausea whenever I get another letter from my insurer indicating a price hike because of medical costs, etc. In fact, that $865 had been $895 til they did a recalculate and backstep. 
    I for one, am looking forward to saving thousands of dollars a year with managed care. Repeat, thousands. Regardless of your politics, until this plan came along, my only options were paying for healthcare vs. covering my retirement. 

  • GarySweeten

    I have worked with medical systems in Europe and they are filled with problems. 1. Getting care is a very long and difficult experience. 2. If you are old you can not get certain treatments.3. Non emergency surgery like knee replacements take six to nine months to schedule. 4. There are very few advanced treatments. Innovation is almost nil.

  • Karenamazing

    I can't find a simple question anywhere. So for a sole proprietor is the income based on gross income or on adjusted gross income? Our business expenses are a requirement of making money. So the 2014 income for an individual of over fifteen thousand is supposed to be enough over the poverty level to allow us the income to do business? I turn 65 in 5/2016 and I think the penalty may be a better option unless it is adjusted gross income where I would be eligible for a subsidy. Actually the only thing I would want would be dental. I don't take prescriptions and don't ever want to. over twenty years w/o insurance and dental still is all I want.

  • PtronAV

    I heard that senators are exempt from the law and penalties; is that true? If so, why would they do that if it's such a wonderful thing? And if so, why don't they have to pay into the system?

    Also, is it true that if you use the exchanges and then have a change in income later on without notifying the gov't that you will have to pay for the cost of using the services as a penalty?

  • Cbartsie

    Wouldn’t it be a wonderful jester of good faith if Obama and Pelosi opted
    to forgo their current insurance and join the masses on the exchanges?

  • johnTnash

      and , you will appreciate this in light of our exchange a couple days ago. While it is true that for me, as a freelancer with a family of 5 and an expensive independent insurance plan, I will save money under the ACA, such is not the case for my brother. My bro is not a freelancer, but he runs a small manufacturing business with 29 union employees. His insurance costs for his employees are increasing 70% under the ACA and the coverage is not even as good. Their margins are already razor thin to stay competitive with oversees manufacturers. He will be forced to pass the costs onto the customers, risking losing business. He's currently trying to figure out how to avoid laying people off.

    Now, I'm no genius, but the backbone of our economy is businesses like my brother's. I earn a living as a freelancer working for businesses like his. If businesses like his are taking these kind of hits, guess who is going to feel it in the project budget department? Freelancers! We went through this 5 years ago when the economy tanked. Budgets went through the floor, and they've never really recovered. Now it looks like it might happen again.

    So where does that leave me, the freelancer who will save money under the ACA? Honestly, I'd rather keep my current, more expensive crumby plan than deal with another bout of shrinking budgets and client work drying up.

  • Guest

    JohnTNash, thanks for sharing, and for your honesty. I wish, and your brother, luck. We're all going to need it. I apologize for being a little bit harsh in my previous post, but there is so much misinformation (dare I say intentional lies) going on out there to pump up Obamacare. And, I do know there are "shills" (my term) being paid to promote it everywhere, including social media. 

    I'm a freelancer (software developer) too, and Obamacare is a disaster for me. I would like people to know that the whole "you can't be denied coverage for pre-existing conditions" is highly bogus and disingenuous. Sure, you can get coverage, but only the rich (not me) or the very poor will be able to afford that coverage (the middle pays for both). Yes, they have to cover you, but they are going to charge you a lot more for that coverage. People, please don't blindly buy the b.s. you're hearing out there about Obamacare. Check it out for yourself. Keep in mind, you may find that the doctor who has been treating you successfully for your cancer (or other serious health issue) for the last many years, is no longer available in your exchange plan (my case, although I don't have anything as serious as cancer). Like I said before, in my state, the exchanges have greatly limited the number of doctors and hospitals in the plans. To keep your doctor, you may have to go outside the exchange, and, in that case, if you want an Obamacare-compliant (geez, this sounds like we're a Communist country!) plan outside the exchange (equivalent to what you have now), you will, again, pay more. A lot more. Many people will find themselves in a lose-lose scenario. 

    At this point, I'm opting out. I'll try to find a catastrophic plan, pay out of pocket at my doctors (most have said they will give discounts for out of pocket patients), and  pay the tax/penalty. This is so un-American I can't even believe we're headed down this road. Even sadder is 50% of Americans either don't care, or have no clue what America was before it was taken over by socialist/marxist/communists. Say what you will, I believe this is what has been happening for a good number of years now. Obama has just accelerated us down the road.

  • Susie

    I notice that every commenter on here speaks to "me" and what "I'm" getting out of this. I get it- we only really care about what these changes mean to us on a personal level. But the government isn't looking at YOU, they're looking at what's best for the common good. Unfortunately, there's no way to come up with a plan that's good for EVERYONE. Obamacare sucks for me and my family, too, but I'm trying to keep my chin up with the fact that I'm not the only one who matters (I wish I was!!) and that this will be good for the people as a whole. There's sadly no perfect solution.

    (and yes, I am tempted to use the argument that why should I as a hard worker be punished while people who don't work at all are getting these benefits.. And then I try to think about people who can't work or who have pre-existing conditions and need help.)

  • Mark Hayden

    "I" is what America is ultimately about though--protection of individual rights and freedoms to further the common good, rather than managing the "common good" directly as in socialist governments.  I'm not convinced Americans are willing to embrace the socialist approach at the expense of their individual freedoms.

    I am Canadian and have a bit of a different perspective I suppose, but it seems Obamacare is about adopting the WORST of both worlds--robbing the individual of choice but retaining the least desirable aspects of private healthcare industry (ie. the industry gets to keep way more freedom to choose than the individual does by way of picking which doctors, services, facilities are covered as well as in setting prices).  Also what is lost on people with Obamacare is the full ant real costs--they become more hidden and convoluted under Obamacare. For every benificiary who comes out ahead there is one that pays more than their fair share.  For every self-employed who gets a break there is a business owner who pays so much more they face having to lay off or close down.

    In Canada we have a fully socialised medical system that covers basic healthcare that goes further than Obamacare, and in some sense it solves some of the problems that Obamacare will introduce, but magnifies other problems.  In Canada, corporate taxes are quite low, but payroll taxes are quite high.  Cost of labour in manufacturing is a serious challenge in Canada because of the cost involved in hiring people vs. in foreign markets. In large part this is because of payroll tax levels.  The thing is it is hard to point the finger at medicare because they are not accountable.  when you go to the hospital you NEVER see a bill or financial statement of any kind at all related to your healthcare.  There is no "heathcare tax"--it comes out of general revenue.  Without visibility medicare has become obscenely inefficient in Canada--only recently have the salaries of government healthcare executives finally come to light to show the extent of the problem.

    But the frustrations with government healthcare in Canada go further than that.  When it comes to TRUE emergencies, urgent surgeries (like heart attacks, treatment of advanced caner, etc) and so forth you are is really good hands.  Otherwise you arein for a world of frustration.  Waiting lists for diagnostic imaging, joint replacement, non-life threatening emergencies and so on are horrible.  You can wait 8, 12 even 24 HOURS in emergency with a sprain or minor bone fracture or non-life-threatening infection.  Diagnostic imaging (MRI, etc) can be WEEKS or MONTHS.  Joint replacement waiting list can approach a YEAR.  Private alternatives are highly regulated, very limited and sometimes not even available in Canada--you wait or you are very rich and go to the US.

    Say you have breast cancer and need a mastectomy?  You will get it pretty fast in Canada but they will NOT do reconstructive work at the same time--you get on a list and wait, disfigured, for months, because though it is covered it is not life threatening.  In the US, the will do both at once--quicker, more efficient and less risky to the patient than 2 separate procedures.  But extra time and 2 different specialists in the ER is beyond what medicare in Canada can seem to muster.

    Winston Churchill once said "socialism's inherit virtue is the equal sharing of misery".  There is some truth to that.  US has the best healthcare in the world bar none--but right now only a few can access it.  Canada has "universal" healthcare, but we have nothing even close to a "mayo clinic".  Perhaps what we have is better (probably is I think), I don't know for sure...but it is not even close to the best--to get that we have to go out of country--and when we do that it means we take our money and business with us, to the detriment of our own healthcare industry.

    What I DO know is that Canadians have ceded control of their own health to bureaucrats and "professionals" to some detriment, and when you try to exert control it is an exhausting, frustrating process.  Keep that in mind as you explore government roles in healthcare in the US.

  • Guest

    Susie, with all due respect, we're not a Marxist society. As nice and utopian the ideas of "common good", "collective", "shared responsibility" (the Obamacare language) sound, that's not America. I'm not saying Americans shouldn't look out for their neighbors. There are a lot of good and charitable Americans, and they don't need to be told to be charitable. America was not founded on the principles of Marx ("From each according to his ability, to each according to his need"). It is not my responsibility to pay for someone else's birth control, colonoscopy, or abortion, any more than it is your responsibility? Seriously, where do you people learn this stuff? Did you grow up in the United States? Either way, you've been brainwashed, I'm sorry to say. Is the indoctrination of America really that much worse than I thought it was?

  • arlojones

    I ran the numbers and they are dire for me.  I'm a self employed attorney who makes pretty good money, but now I have to spend about double effective January 1, 2014, to get the same insurance I have now after factoring in deductibles.  Essentially all of the expensive mandates have to be paid by someone, so since I don't qualify for a subsidy, I guess that's me.  So much for the American Dream.

  • LLS Blogger

    I work steadily as a freelance writer - meaning I make a decent amount of money, but not a lot...I'm still trying to pay off school/credit card bills. I have not had health insurance since leaving my past full-time position, and did not have it prior to that job. I went on to the ACA's site to see what I qualified for, and found that I would be paying $200/month for the lowest tier of coverage. I'm really glad the government has decided what's affordable for me. Since I can't actually budget that in, unless I plan on forgoing the whole school loan payment thing, I will be forced to pay a penalty. Awesome. Because that's what I need. More debt. Still no health coverage. 

  • Guest Speaker

    This might help the self employed who never make money. But it is going to be a nightmare for the self employed with fluctuating incomes. You may have had a great year and made $50k. Then towards the end of the year your income dries up. Come April, you have to pay income taxes and show you are insured. Since a possible subsidy is based on your last years income, you won't be able to get it until you file taxes next year. Then you are forced to pay a penalty.....

  • WriterlyMom

    WHY why why is this a good thing?? "If not, you may be penalized via tax penalties or by a fine--which will increase, year by year." 

    There is no 'may be' the IRS will fine you. Why am I being punished if I say no? 

  • Pat

    Everyone here is actually typing the words "with government assistance" like that's a good thing. You all know that that "assistance" comes from other tax payers, right? 
    Also, just a tip for people who hit the "I Agree" button before reading the terms and conditions, be sure to check on that thing called "yearly deductable" before having that drink to celebrate the cheap and affordable new and shiny insurance policy you just agreed to.  And good luck to all of you who think that there's ever a free lunch.

  • Chris Hamm

    You know I'm quite happy to have the option to get affordable health insurance. I've been uninsured for almost 8 years and this will be a breath of fresh air. The jobs I've had over the years either didn't offer insurance or more often I couldn't afford what they did offer. All this "making better choices" bs needs to stop. This will help many people. Will there be hiccups, yes. Will some things need to be adjusted, yes, but for now can't we all just be happy that 50 million Americans can finally be insured and not have to worry about every little bump, scrape, or ache potentially turning into bankruptcy?

  • 2straws

    Well, good luck to you. Have you checked the exchanges? I am here in NC. My monthly premiums went up over $200 and I now have a deductible of $3500. My 19yo used to pay $98 per month, he had no deductible and a $35 co-pay. He can get the lowest insurance at pretty close to that rate, but it comes with a $5500 deductible. If he wants what he used to have, his monthly would by $240 instead of $98. 

    It's actually detrimental to self employment or to leaving a company to start a new business. Not everyone works for a big company - ask yourself how much it will cost plumbers, roofers, electricians, graphic artists, coders. 

    Instead of making conjecture, I would encourage anyone to check with the exchanges and see what your rates are going to be. It will be a huge surprise to you. My experience in NC, with peoplle at 18, 30 and 45 - the rates are almost doubling.

  • Grateful

    Granted ... probably no one, even the experts in insurance industry, don't fully understand details of Obamacare and the fallout in the future.  So attempting to speculate does not get any of us anywhere.

    Those of you in your younger years and healthy, count your blessings.  There is a reason why even those of you with a family of 4 are paying less for insurance than those of us 50 and over do (and that is with the highest deductible possible).

    The fact that insurance companies are now required to provide as part of their basic coverage for services that costs the most when needed -- such as emergency services and rehab services -- seems to be forgotten when looking at cost savings with Obamacare.

    Serious health issues are the #1 reason for financial bankruptcy due to the many prior inequities in healthcare system -- what was covered, not covered, who was denied coverage, etc.  I lost all my assets including my home in my late 30's (even with 2 insurance plans) due to health issues and inability to work for 5 years.

    I am grateful that basic coverage is mandated, no matter what.  It's a step in the right direction.  If I pay a few more dollars later on, so be it.  It beats spending hundreds of thousands of hard earned dollars if I become seriously ill and insurance companies can drop me like a hot potato.

  • Guest

    If you're over 50, you should know better. But, then, I know a lot of people over 50 who are socialists. It's as if we grew up in different countries. It's sad. 

  • Ralph Bagnall

    As usual, Fast Company sinks into propaganda.

    First, the entire premise is flawed. Obamacare does NOTHING to "provide lower cost health care". It ONLY proports to lower health INSURANCE costs. And it only does that by shifting the cost to those who have been responsible enough to provide for their own health insurance.

    I find it stunning that ANYONE thinks that the Government is the answer to high costs of anything! The same folks who have done such a great job driving Social Security, Medicaid, Fannie Mae and Freddy Mac to bankruptcy are going to be managing your health insurance! What could possibly go wrong?

    Further, the enforcement for this new law is to be implemented by the IRS, well known for their reasonable behaviors and great customer service.

    This is going to be a complete disaster, one only needs to look at the headlines in British Newspapers to see the almost daily horror stories from the NHS.

    Ralph