How To Find Inexpensive Health Insurance When You’re Self-Employed

In: How To By: Brian Armstrong

19 Jul 2007

Here’s a question from a reader…

Hey Brian, quick question for you. Where are you getting your health insurance from? And how much is it running you?

Thanks,
D.W.

Hey D.W.,

It turns out that finding inexpensive health care is easier than you might think, even if you aren’t working for a big company. I personally use Blue Cross Blue Shield of Texas and it runs me $68/month (I can’t remember my deductible exactly but it’s a little higher than average, I hardly ever get sick).

That’s not to say that Blue Cross Blue Shield is right for you though. I found them through eHealthInsurance.com and the entire process was relatively painless. They made it easy to compare vendors, and I’d recommend them to anyone selecting their own health coverage (self-employed or not).

A lot of people talk about free health insurance as a reason to work for a big company, but the argument never really made sense to me. For one thing, it’s not really free (it’s coming out of your paycheck in one way or another). But more importantly, getting “free” health coverage is hardly a reason to decide what to do with 1/3 of your life. It’s sort of like buying a car because it comes with a free oil change. You can probably afford to get a good oil change regardless, so why wouldn’t you buy a car based on what’s really important to you?

Are you self-employed? What has been your experience with health insurance?

11 Responses

Travis Northcutt

July 19th, 2007 at 10:03 pm

Brian,

Excellent timing! I’m getting married in August and this is one of the things we’ve been researching, so thanks for the resource. How has BCBS been for you? We’re looking at BCBS, Aetna, and Celtic, based on information from ehealthinsurance.com.

July 19th, 2007 at 10:30 pm

We found health insurance the same way – however, ours (for a married couple without maternity coverage) just increased to $849 per month. We have a high deductible – $1500 per person per year. Neither of us had any health issues when we got the policy, so we won’t be rated as higher risk even if something serious develops in the future – or so they say. Still, our policy increases by $100+/mo each year. Our ages – 53 and 60 – are clearly the major factor.

While it is sometimes tempting to look for a “job” that provides coverage or at least a discounted group rate, we have family members in their 50’s who were laid off from jobs they’d had for many years. Fortunately were both able to find new jobs with coverage, but given their health issues, it would have been very difficult for them to find coverage at any price.

It would be advisable (IMHO) to look into health insurance options prior to giving up a job that provides it – especially if you have health issues. I know of one young man who was denied coverage simply because he was taking medication for depression.

Brian Armstrong

July 20th, 2007 at 1:27 am

Travis: I have no complaints about BCBS. I don’t have much to compare them to, but I’ve had no problems. Glad it could have helped!

Derrek

July 20th, 2007 at 2:20 pm

Health Savings Accounts (HSAs) are a great option for the self-employed. I’ve done some research on these, but never opened one myself.

http://www.treas.gov/offices/public-affairs/hsa/

Terra Andersen

July 20th, 2007 at 2:35 pm

I’m SO bad, I really have been putting off getting health insurance for the last few years. You know… it’s the same thing all young entrepreneurs thing…”I’m young and invincible”.. haha .. just kidding. I will probably be looking into Blue Cross, as I have heard great things about them.

Sonia

July 24th, 2007 at 3:37 pm

HSAs are fine, but realistically they don’t begin to cover the expenses of even something relatively minor (yet life-threatening) like appendicitis. It’s pretty scary how quickly you can run up 6-figure medical bills.

Health insurance for my family would cost me at least $1000 a month, probably more. And unless I can find a group (my local chamber of commerce is an option, I need to check them out), I might not be able to find coverage at all. The last time I tried on my own, I was denied because I had a test in my early 20s that showed elevated cholesterol. (I’m now 41, my cholesterol has been fine for decades, but they don’t care.)

Fixing this would probably be the single greatest thing the gummint could do for us small businessfolk. Among my friends, I don’t know any small businesses that can afford to offer insurance any more, although most of us very much want to.

John R. Ingrisano

July 25th, 2007 at 10:58 am

I’ve been in business 30 years, and I watched my insurance costs soar. (The delivery of my first child, born in 1974, cost me $100, btw.)

Several years ago, I was shelling out thousands of dollars a year, with high deductibles and coverage that seemed to only cover things I didn’t get.

Then I did my HSA research. My premiums plunged, I got to deduct contributions to my HSA Account, and overall, I have no complaints. For details, check out the article on my site.

John R. Ingrisano, The Freestyle Entrepreneur

Brian Armstrong

July 25th, 2007 at 11:07 am

I’ve been hearing more about HSA’s lately, thanks for the information guys.
Brian

Myspace Text

July 26th, 2007 at 7:11 am

I went with HealthNet (with HSA) via eHealthInsurance.com, however I bypassed EHI and applied directly to HealthNet since they claimed better support if I ever needed it.

Brian Lenell

October 30th, 2007 at 9:55 am

For a good workbook on the health insurance issues go to http://www.healthinsurancetoolkit.com/health_crisis.pdf

You can use the spreadsheet to see if a particular deductible is right for you.

Most people don’t understand how HSA’s work. Case in point “they don’t begin to cover the expenses of even something relatively minor (yet life-threatening) like appendicitis. It’s pretty scary how quickly you can run up 6-figure medical bills.” The largest family deductible that you can have is in 2007 $11000, and that is the maximum family out of pocket as well. While $11000 is a lot of money, it is not 6 figures. That is why you need to maximum fund your HSA account. If you don’t, you are only fooling yourself. One day you will have a large claim and will need the money in your HSA. And if you don’t use the money in your HSA, it can be used in retirement years like an IRA. Reference IRS Publication 969.

However you may not want to go to the highest deductible immediately. Us the workbook stated above to see what is the best rate for you.

And if you are in Illinois or Wyoming try http://www.HealthInsuranceToolkit.com for rates and calculators to help you in your decision.

J.Cyrus

February 4th, 2008 at 7:16 am

There’s a gentleman by the name of Hilary F. Cooke with a great selection of options in Brattleboro, VT – speaks with everyone directly (far more often than not) at the initial call; down-to-earth:
http://www.healthplanmarketplace.com

services all of New England.
Be Well.

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How To Find Inexpensive Health Insurance When You’re Self-Employed

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