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Self Employment Tips On Lowering Your Health
Care Insurance Costs
by Dominic S Messina
THE BAD NEWS: If you're one or the growing ranks of Americans
who are self employed, you know how expensive it is to get comprehensive
health care coverage. Oh sure,
it's available... just not at the same price that large businesses
pay as they qualify for group rates.
Worse yet, the premiums which small businesses (less than 200
employees) have for heath insurance coverage is increasing at
twice the rate that it's increasing for large (500+) employees
according to William M. Mercer Inc. (www.wmmercer.com), a consulting
firm specializing in employee benefits. Not surprisingly, an estimated
40 percent of small-business owners do without insurance, according
to the Insurance Information Institute (www.iii.org), because
they believe they can't afford it.
Because of their high price, too many self employed individuals
settle for health coverage that is inadequate. Such business people
are threatening not only themself and their family's health, but
also their business' very existence should they ever become injured
or seriously ill.
THE GOOD NEWS: If you're planning to leave or recently have left
full-time paid employment, you can still retain your existing
health insurance thanks to
a law known as COBRA (Consolidated Omnibus Budget Reconciliation
Act) of 1985. COBRA can provide a bridge for the newly self-employed
as it allows you to retain the same insurance coverage at the
same price that you had before. As a former employee using COBRA,
you have to pay the full premium that your employer was previously
paying or supplementing. That is still cheaper than an individual
policy, since the coverage is purchased at a group rate. When
it expires, you have the choice to continue with that same plan
-- at an individual rate.
The problem is that COBRA only lasts 18 months, and after that
those who are self employed are on their own. However, there are
some options that self employed business people have to reduce
how much they pay for health care coverage. These are:
1. Use The Internet To Become Better Informed Whether shopping
for the lowest health insurance rates or wanting to ask medical
questions of experts, learning to do research on the internet
can make you a more informed consumer, thus bettering your chances
of lowering your health care costs. The better educated you are
about health care, the more you can avoid unnecessary and/or expensive
medical insurance.
2. Get Coverage From Your Employed Spouse A common and easy way
to get long term health coverage is to add yourself to your employed
spouse's existing policy, and use the extra premiums you'll have
to pay as a tax-write off, of course.
3. Join With Other Self Employed People There are strength in
numbers so investigate joining a professional or trade organization
that offers its members coverage at a group rate discount. Two
such groups are the National Federation of Independent Business
(www.nfib.com) and the National Association for the Self-Employed
(www.nase.org). However, before joining a group just for its health
insurance plan, one should consider the cost of membership in
addition to the insurance premiums.
4. Lower Your Level Of Health Insurance Coverage If you are healthy
and don't require much medical care, why give the money to the
insurance company for low-cost claims when you could keep it yourself?
If you choose a higher deductible or a higher co-pay, the money
you save in monthly premiums might actually be more than you spend
out of your pocket in a year.
5. Reduce Your Chances of Getting Sick You know the old saying
about an ounce of prevention being worth a pound of cure? Well,
this is especially true when it comes to reducing your health
care costs. According to Marilyn Furry (Associate Professor Of
Extension Education - Penn State's College of Agricultural Sciences),
the best advice to follow to avoid high health
insurance premiums as well as out-of-pocket health care expenses
is to do the following:
(a) Take advantage of free health screenings at local clinics,
hospitals or health fairs (b) Know early warning signs of potential
health problems and consult a physician ASAP (c) Compare fees
and costs for medical, pharmacy and surgical procedures (d) Keep
accurate medical expenses records so you can itemize these deductions
on your taxes
6. Join A Discount Health Benefits Club Perhaps the best way
to cover any existing gaps in your health insurance is to join
what is known as a Discount Health Benefits Club such as Ameriplan
(www.ameriplan.com) or MediSavers (www.medisaver.com). These clubs
offer their membership savings on prescription drugs, dental visits
and other health services by charging a fee to connect members
with doctors, dentists, vision centers, and chiropractors.
Rising medical insurance costs force many self employed professionals
to eliminate coverage in areas like dental, vision and prescription
drugs. But with these areas covered when one joins s discount
health benefits club, any gaps in the self employed dental, vision
and prescription drug coverage are eliminated.
Also, because 'discounted health benefits' aren't insurance,
they can be used in conjunction with existing health insurance
to lower certain costs and even supplement coverage for both the
self employed as well as the self insured. Due to their ability
to supplement existing health insurance, discount health benefit
clubs must be considered a strong health care alternative for
the self employed.
AS MORE PEOPLE BECOME SELF-EMPLOYED, MORE OPTIONS WILL APPEAR:
Perhaps the best advice a self employed person can get on reducing
their health care expenses is to keep informed about changes in
the small-business benefits arena and shop around for great value
health insurance quotes. Organizations
such as Working Today (www.workingtoday.org) and the National
Association for the Self-Employed (www.nase.org) are building
networks and lobbying Congress to improve access to better health
and retirement plans for independent professionals. Consider lending
your voice to theirs and maybe someone will help you.
___________________________________________________
Dominic Messina has been a health insurance professional since
1983 and currently sells Ameriplan discount health benefits to
individuals and organizations from his home office where he struggles
to keep his cat "Zorro" from jumping up on his desk.
You can email Dominic at ameriplan_dm@yahoo.com
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