Health Insurance for Freelance Artists and Other Creatives UPDATED
Freelance artists often go without health insurance. They have no employers to provide it, or claim they cannot afford it.
Here’s a great online resource for artists and other self employed people seeking health insurance. Just click on the map of your state, and a comprehensive listing of organizations and insurance options will be made available to you. This goes for artists of all kinds, but also applies to low income families, the disabled, etc. Please bookmark.
Many creators lament the lack of health insurance options for the self employed. Creators, in particular, with their irregular income and unusual profession, have a harder time than most arranging and budgeting their own benefits packages. One aspiring pro creator stated that the only reason she had never quit her job and started her own company was because she knew self employed people could not get insurance.
When I first wrote about freelance artists and health insurance on my old blog, I had a sweet plan that only cost $136 a month for comprehensive care with a $5000 deductible. After a long term illness that lingered from December 2006 to late 2008 which helped send my income plummeting by more than 40%, my monthly health care costs, including insurance, skyrocketed to up to $600 a month.
Freelancers without steady income or employee benefits packages need to be scrupulous about their health care plans. I’ve always depended on my royalty income to perform as my benefits package, and that doesn’t always work in these days of falling book sales. (Yes, things have improved a lot over the last couple of years. I am fine, and I can pay the whopping monthly health care bill.)
For those who fear giving up insurance while just leaving school or a job, there are companies that also offer affordable short term health insurance that can run from 30 days to 6 months.
Don’t think you can’t afford insurance and then give up seeking it without even trying to look though this site.
Some organizations offer a flat health insurance fee to ALL members. I used to belong to the National Association for the Self Employed and all members paid the same rate. I have read many complaints about the NASE plan, and left them many years ago, having no complaints myself.
I have Anthem/Blue Cross Blue Shield for comprehensive health care, including dental insurance, for $260 a month. (EDIT: less than six months later, another insurance cost increase. I now pay $320 per month.)
I had no problems with the NASE, I simply get what I need elsewhere. The Graphic Artists Guild suited my needs more. I recommend you seek out both and make your own decision. You may want to belong to both. I did for awhile.
Just go to the insurance resource website and click on the state in which you live. You will then see a long list of options. Don’t just study one category such as “graphic artists”. Also look under “self employed”, “visual arts” and other categories. You’d be surprised how many categories may apply to you, even when you live in places you may think don’t have resources that suit the needs of creators. EVERY state has resources for you.
Since I live on a farm, if need be, I could also qualify under several categories for income assistance and insurance for farmers. So, be sure to check out a variety of categories.
Check out the United States Federation of Small Business, which comes with many benefits, yet costs only $100 to join. The Graphic Artist Guild health plan is administered, in part, through this organization. By all accounts, this is a good plan.
Over half of all Americans get some kind of government assistance. They may be businesspeople, or farmers, or low income families. Regardless, you pay taxes for a reason. This is your money. There are many government assistance plans listed on the site. Please avail yourself of these services, if you genuinely need them. That is what they are there for, and you paid for them.
Don’t assume that because you are low income, you don’t have resources.
By the way, don’t expect insurance to pay for every case of the flu and every little illness. This kind of thinking keeps premiums high. Go for the absolute HIGHEST deductible you can afford. Insurance is supposed to cover you in case of catastrophic illness. You are paying that premium in the event that someday you are going to have a major case of cancer or something.
Try to keep your deductible high and then sock the extra money you save on the premium every month away in a money market plan or some other savings vehicle. You will have a better return in your insurance investment that way. By taking a high deductible, I save about $100 a month, or $1200 per year. $1200 a year more than covers the average out of pocket I may have, and in ten years at 5% compound interest, that’s a savings of $17,802.
I went through that entire reserve (and more) when I stayed sick for a long time. At the very least, a professional artist should sock away a six month savings reserve. I needed over a year’s worth. You are not just paying for medical expenses, you have to save for the possibility of being unable to work. Disability insurance can be expensive, and for freelancers, harder to get. The entire time I was sick, I was never completely disabled, just not able to work at full speed. Disability insurance would not cover me in that case.
Also, look into a health savings plan. These are like IRA savings accounts for people who opt for low cost, catastrophic insurance plans, and back them up with these savings accounts. The deposits are tax free, and as long as the funds are used to pay for your qualifying medical expenses, they remain tax free. If you are a relatively healthy person at this time, these are a great option to consider.
What Is a “High Deductible Health Plan” (HDHP)?
You must have an HDHP if you want to open an HSA. Sometimes referred to as a “catastrophic” health insurance plan, an HDHP is an inexpensive health insurance plan that generally doesn’t pay for the first several thousand dollars of health care expenses (i.e., your “deductible” but will generally cover you after that . Of course, your HSA is available to help you pay for the expenses your plan does not cover.)
“For calendar year 2012, the annual limitation on deductions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,100. For calendar year 2012, the annual limitation on deductions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,250.”
HDHPs can have first dollar coverage (no deductible) for preventive care and apply higher out-of-pocket limits (and co pays & coinsurance) for non-network services.
But remember, a self employed person who is paying out of pocket for their own health insurance enjoys a 50% tax deduction. Be sure to calculate your tax savings as a deduction from the cost of your insurance.
For example, if you can’t afford $200 a month, remember that $100 of your insurance payment is not taxable. Say you are being taxed at 20%. That’s $20 a month. So your actual insurance cost is only $180 a month.
(Updated and adapted, with all links restored from a prior post.)
UPDATE: A couple of incoming questions about insuring the entire family when you can’t afford it. I’m of the opinion that the major breadwinner should be insured first, even if the rest of the family goes without. If the major breadwinner goes down, everyone is screwed. Others think you should insure your children first. That makes no sense to me because if you are not making money, there is no one to pay their insurance, either. Insuring children, is apparently, fairly low cost. You can always expand your insurance options later as your income rises (one hopes).
Children are less likely to suffer from catastrophic illness than adults, but no one wants to worry every day wondering if they can afford care for their loved ones. I’m the kind of person who had insurance on my cat.
Here is a useful article about what to do if you absolutely can’t get health insurance. It ends with telling you how to get health insurance anyway. But there is some useful advice here.