Health insurance for fulltiming freelancers
Health insurance in USA is confusing. Health insurance for a fulltimer is even more confusing. Here's what we did recently, for 2017.
We're a married couple, and generally healthy. At least for now, we will not have employment-related health benefits, as we're both in a freelance/entrepreneur situation. We don't use health services much. We wanted a high-deductible plan where we just pay for what we use, but we also wanted to be well insured against bankruptcy-level medical costs.
In earlier years, people have praised Kyle of RVer Insurance Exchange a lot, but he's now only working on Medicare plans. For 2017, his writing at http://www.rverinsurance.com/2017-health-insurance/ is still very useful, but he might not bother in the future.. So, we're still using his writings as a guide, but next year it'll be even more homework for everyone!
Let's first talk about what we ruled out:
- We're well past 30 so we can't use the "catastrophic" category insurance plans.
- We're not interested in the faith sharing thing, for two reasons: it just doesn't feel reliable enough (it only takes one natural disaster to fill the system with people needing help), and we're not fans of the religious angle..
- All Accident and Critical Illness Insurance products I can find seem to have very low maximum payouts. We are explicitly worried about the costs after the first $20,000. At the benefit level they have, I'd rather invest the monthly premium.
In earlier years, a fulltimer would choose a PPO plan, to be able to get medical care outside of their "home" county. However, starting in 2016, it's very hard to even find an individual/family PPO plan, for any amount of money -- they're pretty much only available through employers. Our domicile is going to be with Escapees in Texas (zipcode 77399), and for that region, there's pretty much a single provider (Blue Cross) with variations of the same HMO theme. We checked the market for the Escapees Florida location, and it's very much the same story, for slightly different dollar figures. And "off-market" plans we can find don't seem any different.
Furthermore, it's likely we'll have fairly low income for 2017, live off of savings and split time between being tourists and working on future business endeavors. That means we should get a hefty discount via ACA premium tax credits. And if that changes, well, worst case we'll just pay the discount back at tax time.
So, it seems we're picking an HMO plan from the Healthcare.gov marketplace. The most promising plans seem to be (without discounts, for the whole family):
- $645/mo Blue Advantage Bronze HMO 105
- $710/mo Blue Advantage Bronze HMO 006
(see also a PDF summary of the differences)
which both have both the deductible and max out-of-pocket cost in the $6,500-7,200 range. As we said earlier, we don't care much about costs for doctor visits (we'll likely be traveling and thus out-of-network), and both have free in-network preventive care which we'll use whenever we're back at Escapees.
The reason the more expensive 006 plan is worth looking at is that it fulfills the criteria for an HSA compatible plan, other cheap plans tend to have max out-of-pocket cost a little too high. A Health Savings Account lets you use pre-tax money for healthcare costs, works as a tax-advantageous investment form similar to an IRA, and can lower your taxable income -- and that can mean a lower tax bracket, and further ACA premium discounts. Of course, the HSA banks really love to nickel-and-dime you out of your extra money, tend to give you poor investment rates, and an HSA will complicate your taxes.
We were originally thinking of going for the cheaper plan, but with Trump making noises about wrecking ACA, we decided to grandfather ourselves in on the slightly more expensive plan, in case we want to make use of an HSA.
To help minimize costs from "little things", we're also adding on a telemedicine package. $149/year doesn't seem bad at all. If you're a couple who needs a doctor less than three times a year, or just want to delay paying for things, MDLIVE, Doctor On Demand and Amwell all charge $49 per visit, no subscription. It's worth pointing out that you can't just subscribe to Teladoc on the first day you're sick -- the plan activates on the 1st of the following month.
Final note: we have no specific plans to go to Mexico for healthcare, but that's an option worth keeping in mind.