If you’re a US-based freelancer, you’ve probably been tracking the congressional health insurance negotiations fairly closely. Regardless of your political views, health insurance is a huge issue for freelancers in the US. The reality is that there are people who cannot be freelancers if they cannot purchase individual health insurance coverage (meaning coverage not provided by an employer). The Affordable Care Act is far from perfect, but it was a huge boon to many freelancers. In the pre-ACA days, many Americans experienced a phenomenon known as job lock–the inability to leave their job for fear of losing their health insurance. Job lock’s cousin is entrepreneurship lock–the inability to be self-employed because of the inability to get health insurance–a real concern for many people before the ACA’s guaranteed-issue policies came to town.
How bad was the pre-ACA situation? If you were young, healthy, had no pre-existing conditions and didn’t plan on having children anytime soon, it was OK. My family of three paid for individual insurance for about six years after my daughter was born, and the costs weren’t pleasant, but they weren’t crushing either–perhaps $800 a month for the three of us. But if you broke that mold–let’s say you had pre-existing conditions, or multiple pre-existing conditions, or you were a cancer survivor, or you were pregnant, or you had huge health expenses and then your insurance company dropped you–the reality was grim, because insurance companies in the individual market could decline or drop whoever they wanted. I have freelancer friends who were declined for relatively minor pre-existing conditions that were well-controlled with medication (i.e. high blood pressure). Others stayed in salaried jobs that they hated, simply for the benefits. Others were quoted upwards of $30,000 a year for insurance for one person. The expression “uninsurable on the individual market” (should anyone ever have to hear that??) came into play, and some people simply could not be freelancers because of it.
At the same time, the number of self-employed Americans has been increasing, meaning that fewer people have access to group coverage through an employer, where the insurer is required to cover everyone. Studies and surveys differ on this, but various sources seem to agree that up to a third of Americans are either fully self-employed or don’t have access to insurance through an employer. Perhaps the most shocking statistic comes from the Kaiser Family Foundation’s white paper on pre-existing conditions: “We estimate that 27% of adult Americans under the age of 65 have health conditions that would likely leave them uninsurable if they applied for individual market coverage under pre-ACA underwriting practices that existed in nearly all states.” That’s a pretty staggering figure, especially if you’re:
- a freelancer
- with pre-existing conditions
- over 26 and under 65, meaning you can’t be on a parent’s policy or on Medicare
- not married to someone who has employer-based health insurance that will take you
These days, we get our insurance through my husband’s employer. It’s not perfect either; the only plans they offer are high-deductible, and my husband had some significant health issues that–of course–wrapped over two calendar years and resulted in $12,000 in out-of-pocket expenses toward our deductible. But there’s a big difference between using your rainy-day fund to cover deductibles and fearing that you might not be able to purchase health insurance at all, or that your insurance could drop you for running up large medical bills.
To me, this issue is not political. If the current Congress can come up with a system that provides better coverage to more people at a lower cost, who wouldn’t support that? But a return to the pre-ACA situation where insurance companies could decline or drop anyone, or accept those people at premiums that no one with a normal income could afford, will have a devastating effect on all types of freelance-heavy professions. Lots of people dismiss the individual insurance market, as if it applied to five people in the entire US. Whatever your political views, tell your senators and representatives that the individual insurance market is hugely important to millions of people, many of whom may not be able to continue being self-employed without that coverage.
Galina says
Thanks for this insight into the situation for American freelancers. I wasn’t aware of how difficult the situation was. In Germany we have a similar “problem” albeit much less expensive, that as freelancers we have to cover our own insurance, and also HAVE to have health insurance by law. Especially when starting out it can be hard to come up with what might be 400€ a month to cover that. But how can you consider this not to be a political issue? I feel strongly that freelancers, especially those starting out on a daunting “adventure” that might seem very scary, should get support in some way. I don’t quite understand why we don’t take a leaf out of the United Kingdom’s post-war book and introduced universal free state health care for everyone. It worked fine and no one went bankrupt because of it. But of course that doesn’t help freelancers struggling now. In Germany we have a special state-run fund for people in “artistic” careers as freelancers that co-finances health care for the first few years of your career. This also includes “creative” translators. It truly was a Godsend for me, I am not sure if I could have made it as a freelancer without their support. But it was politics, people changing laws, that made it happen. Once you earn more (as I now do) you pay more, to subsidise others who are struggling, so it is a very cooperative arrangement that I think is fantastic. Maybe a model for the US to look at?
Corinne McKay says
Thanks, Galina! Always interesting to see how other countries do it! I guess what I mean by “not a political issue” is that it doesn’t matter whether you’re liberal or conservative; freelancers need health insurance. Part of the current US system is what we call “the individual mandate,” which means you have to have insurance or pay a penalty. But in the end, that’s why insurance works: because you pool the risk of people who are young and healthy and think they don’t need it, with the risk of older or sicker people. That’s really interesting about the “artistic” health insurance fund. I do think that in the US, the rumblings about single-payer health insurance are growing. It’s unlikely to happen on this go-around, but I think people are realizing that if you take a piece out of the puzzle (guaranteed issue, individual mandate, pre-existing condition coverage, no lifetime maximum coverage, etc.) then things start to fall apart. For example the current Republican proposal eliminated the individual mandate, but required insurance companies to take anyone who applied. Meaning that you can just wait until you get sick and then buy insurance…nice idea, but not going to work in reality!
Alison Penfold says
“I don’t quite understand why we don’t take a leaf out of the United Kingdom’s post-war book and introduced universal free state health care for everyone. It worked fine and no one went bankrupt because of it.”
Yes, but take a look at the current state of the NHS: it’s in dire straits.
galina says
Yes because it has been completely starved of funds for the last thirty years under conservative and labour governments. It used to be something we Brits were incredibly proud of.
Nora Migone says
Everything you mention is true, and I agree with you, as a freelancer with pre-existing conditions.
Corinne McKay says
Thanks, Nora!
palomnik says
Great post, Corinne. This has been a matter that has been heavy on my mind for years.
One solution – and I’ve never heard of anybody exploring this in depth – would be to develop a group plan through some work group – like maybe the ATA. This is the sort of thing that real estate agents, actors and surveyors do. If you’re a member of the group you can apply for coverage, and since group rates are used it keeps costs down for all of the members. Of course, it would probably entail a reorganization of the group into something like a guild/trade union, sort of like the Screen Actors Guild, where you would have to prove that you’re actually working as a translator, probably for a certain number of hours a month, in order to continue your coverage.
Another solution – and one that Galina refers to – is to work overseas. We translators are international sorts anyway. I’ve been working in Asia for nine years now; good health care is available in many (but not all) countries in this part of the world, and it is usually cheap enough so that you don’t have to have insurance to get reasonable care, although insurance is available – and a lot less expensive than in the USA. When I want a full checkup I jump on a plane to Bangkok, where the health care is world class and a fraction of what it costs in the States. Even Europe is an option, as Galina mentions, and there is a surprisingly wide variety of scenarios in different European countries, even with Schengen visa rules.
Of course, this means that you have to have a significant other that is willing to put up with that sort of arrangement.
Corinne McKay says
Thanks! I agree with you on all fronts, with a couple of caveats. Group insurance through an entity like ATA would be great; the issue in the pre-ACA days was that those types of groups tended to attract people who had no other options for insurance, and thus were very expensive to insure. But it’s always worth keeping the option open. And it’s so true about medical care in lots of other countries: about 6 or 7 years ago we went to Brazil (my parents were working there) and my husband had needed an MRI on his knee for a while. We hadn’t met our US deductible, and the lowest cost we could find in Colorado was $1,500. Some places were more like $3,000, and some couldn’t even tell us what the out of pocket cost would be. He had it done in Brazil, at a brand-new clinic with a brand-new Siemens MRI machine, radiologist who spoke perfect English, and the report translated into English for his doctor back in the US. Total cost: $350. So *even if we had gone to Brazil just for that purpose*, the cost would have been less than in the US. There has to be a better way!
Galina says
I really like Palomnik’s idea about the guild/group coverage. I suppose it is similar to the KSK (artists social medical care fund) here in Germany. The reason it works though, is that people who earn more over time continue to pay into it. So as we earn more, we subsidise those starting out. But I get Corinne’s point that that wouldn’t work in a society like the US at present. When it comes down to it, it’s all about how you want society to be. Every man for himself or a “society” in the sense of a social entity that cares for the less able. No points for guessing which I prefer…
Kevin Lossner says
I had an MRI for free here in Portugal a while ago – because exam fees are waived for blood donors. That was quite a surprise. People here worry about a lot of things, but health insurance is not one of them. My wife does hip and knee replacements for poor people worn out from a life of hard work. For free.
I hope that the current disasters in US health care will soon result in the single payer system that people need and deserve.
palomnik says
Corinne: one way to eliminate the hangers-on would be to offer coverage only to certified members, which at least provides some guarantee that you are covering only real translators. I’m sure that this would be an acceptable basis for starting a group policy in several states (many group policies are only registered in one state, although they can be sold to people that don’t live in that state).
Michael Schubert says
This really is an urgent national problem and would be best solved at the national level. But with the ruling party openly hostile to the social bond and the opposition still reeling from all the votes it lost trying to strengthen the social bond, a comprehensive solution is likely decades away. My guess is that progress will start at the (blue) state level and eventually spread nationwide. That’s slow and inefficient, unfortunately. I find it at least encouraging that the issue is so front and center in our national political debate. Talk is good: The electorate is becoming more informed. There are so many different approaches taken by the various industrialized nations, achieving statistically better results at a much lower cost, that policymakers really have a vast buffet of ideas to consult (for those who believe Americans can learn anything from other countries, of course). The two features that they all have in common—universal coverage and a non-profit health insurance sector—have yet to be accepted here as inevitable.
Corinne McKay says
Thanks, Michael! Great points there. And I agree: it’s not as if there’s one perfect approach and the US just refuses to take it. For example my husband and daughter have Swiss citizenship, and those darned over-efficient Swiss manage to achieve universal coverage with an all-private-sector insurance system. Costs there are like 11% of GDP versus 17% in the US. I like your very positive take that “talk is good” and that people are becoming more aware of the issue!
Ying Peng says
I think it is more important to fix the mess of healthcare in the US – from skyrocketing hospital fees to the actual insurance “coverage” (and lack of true health care – there is only sickness “care” in the US). What is the point of having individuals to spend, easily, USD 10,000 a year (this will be the rate for 2018, for one person) on insurance with USD 6.500 deductible, only to find out that an increasingly longer list of conditions are not covered until the “deductible” has been met, and the coverage is capped depending on the type of condition or services. Talking to chiropractors and you will find out why many of them are offering “cash deal” nowadays. It seems the only good thing is that the insurance keeps healthcare practitioners “in check” when they strike “cash deals” with patients.
Freelancers are first and foremost a business owners and can buy group insurance from small business associations (that is how I got my insurance, years before I run translation business). In my opinion, employer-provided insurance should be scrapped as it skews the market and makes employees unaware of the real costs, turning healthcare consumers into “we” versus “they”. Also, I believe that individuals should take more personal responsibilities and pay more for their own health care expenses.
EP says
In Germany, as a freelance, you’re not given a choice. You must pay into the health insurance system whether you want to/can or not. This is, well, good in that you’re covered but, quite frankly, very expensive. When people talk about the wonderful “socialized” health care in countries like Germany they need to understand that it is ANYTHING but free. That’s life, though. Nothing is for free. If you don’t have any insurance and something happens to you then somebody else pays your bill.
Kyung says
Thanks for the insight about the freelance translation profession and health insurance. I’ve been working as a freelance translator in South Korea, where I was required to buy into the national health insurance program, until I moved back to the US a couple of years ago. When it was time for us to sign up through the ACA marketplace, my wife and I were shocked to find not only that we would have to pay three times what we used to pay back in Korea but also that the coverage was worse and there were added burdens such as co-pay and deductibles.
Nevertheless, my wife would not have been able to complete her graduate program without having to work were it not for the ACA coverage, as the cost may have been prohibitive under the pre-ACA system (both she and I have minor preexisting conditions). We still have a long way to go to make the healthcare system affordable for working Americans, both freelance and traditionally employed, and should keep speaking out for a working financial environment.
Corinne McKay says
Hi Kyung and thanks for your message. I totally agree with you on both of those points: for example in my family, we pay about only about $400 a month for our insurance through my husband’s job (which is way better than the $1,500 or so we’d be paying without the employer subsidy), but the only option is a high-deductible plan with a $3,500 per person or $7,000 total deductible, meaning that we could potentially pay almost $12,000 a year out of pocket, which is a lot. Additionally my husband sees a specialist diagnostic doctor who doesn’t take insurance (but was the one who figured out his very obscure neurological condition) who charges several thousand dollars a year that counts toward our out-of-pocket maximum but is not covered by insurance at all. But my husband is essentially uninsurable on the private market. So were it not for employer-sponsored coverage or the ACA, he would be completely out of luck: left with really no options except to stop working and go on Medicaid or apply for social security disability. I do think the ACA system is an improvement, in that no one ends up being classified as uninsurable on the private market, but it’s also true that ACA coverage can be expensive enough (a friend was just telling me that they–in NYC–pay $1,800 a month for a family plan) that people consider forgoing insurance, or end up looking at alternative plans like health share coops that are not really insurance. Interesting to hear your experience!