Health Insurance And The Independent Worker

Forgive me ahead of time for not posting a Mom It Down today. I have had the flu for almost three days; eating has been difficult, baking and cooking even more so. I promise to do something awesome next week, assuming I’m not dead.

Speaking of good health (or lack thereof), my question today is one that Toby and I have been asking one another for years: How do people who work for themselves cover health insurance? How can someone running a small business afford the premiums today? How do you do it? What does a monthly breakdown look like to you? Do you have deductibles? Is it just you or do you have kids?

If you have minute and you happen to be an independent contractor or you run your own business, please take a minute and discuss your health insurance. I find it troubling that in a nation founded by independent, hard-working people individualistic entrepreneurs are becoming a dying breed largely due to the cost of healthcare.

So, how do you do it?


  1. I am classified as household help and I split my nearly full time hours between two households. As part of my negotiations when I took the job (hired jointly by the 2 families) they agreed to pay for my health insurance. I’d be in charge of getting it and paying it, they’d just put the money into my annual salary, pre-tax. At first I paid the COBRA on my old plan (just under $600 per month) and then had to find an individual plan, which wasn’t easy. I chose to get one with comparable benefits to the one I’d left behind and really my only choice was AETNA. The monthly premium started out at over $900 and is now at $1204. I have explored some other options but there simply aren’t very many and in a lot of cases the deductibles and co-pays are much higher. Since my job pays for the premium but not the deductibles and co-pays I’d have to renegotiate or be hit with a lot of extra out of pocket expenses.

    Oh, yeah, it’s just me. That $1204 doesn’t cover anyone else. I have had some dermatology issues but not a major illness of any kind. I get a mammogram once a year or so, I get a check up. I had an ear infection a couple of years ago that took some time to clear up and I once fell and had to go to the emergency room but I’m by no means a frequent flyer.


  2. In NYS, your options are this:

    – drop your gross income to below 30k , so you qualify for HealthyNY

    – use an opt-in brokered group, like

    – use an insurance reseller, like

    All 3 are pretty shitty, and wholly indicative of the lack of solutions for middle class — much like new housing and rezoning.

    Corporations create expensive solutions to generate revenue; politicians create low-cost solutions to say “look , we did something for the lowest people who fell through the cracks!”

    HealthyNY is based on the belief that people who make 29k can afford 2k a year in health insurance, while those who make 31k can afford 5k.

    Freelancer’s Union has a good goal, but their implementation has been flawed. I’ve heard that they change the group plan nearly every year , and people who have gotten sick end up getting screwed as the new insurance won’t take them, so they need to find some expensive way to continue existing coverage.

    The options on eHealthInsurance aren’t bad, but aren’t great. One of them was actually 20% cheaper than what I was paying for the same exact plan from a previous employer — except $450/month single coverage vs 560/month is still obscene.


  3. hey Michelle
    My husband and I are both independent contractors in nyc- he is a TV lighting designer and I work in corporate events. He works under the umbrella of his LLC as a small business but he’s the only employee so that doesn’t really mean much. Since I left my staff job 3 years ago we have been covered under freelancers union insurance. Its currently blue cross and the range of docs is good. What is NOT good is that every year the rates seem to get higher and now we pay approx $950/month for the 2 of us, and once we add the baby (due in 2 weeks) it goes up to $1100+ a month. Because I was pregnant going into 2009 we chose the best and most expensive option, figuring we’d lower it to the next one down during open enrollment in 2010 – which is about $900+/month for a family with a bit higher deductible. When we are both working it is not so bad, we make more money than we did on staff which is the reason we left our jobs in the first place, but its by far our 2nd highest bill after rent. Now that I need to take time off for the baby-unpaid of course-its just insane. If you want more details on co-pays and anything else just send me an email. I have docs from them I can send you that compare the plans if you are looking for more info.


  4. Mike’s company doesn’t provide insurance b/c they are based outside of the US, and I’m working as a contractor, so no benefits. We signed up for a PPO plan from Blue Cross Blue Shield that is about $800 a month for the two of us. Once the baby is born it will go up to over $1000. It’s not the cheapest plan that BCBS offers, but because I knew we would be getting pregnant soon, I opted for a plan that costs more but won’t give me any grief – I can see any doctor I want at any time, without referrals or a deductible. I’m hoping that next year I will become a permanent employee so I can get benefits. It’s insane to me that we pay more in health insurance than we used to pay in rent!!


  5. a friend who is a psychoanalyst was paying $1600 a month for her coverage…until she got breast cancer….now she pays $2000….bastards!!!!


  6. I’ve been working contract work for many years now and my husband moves jobs at the drop of a hat so I decided we needed to cover insurance on our own. I got a policy through NASE (National Assoc of Self Employed) about 7 years ago. I have to pay member fees, which off the top of my head I think are like $30 a month maybe.

    They have different policies in different states, but basically it is an a la carte plan where you can choose the coverage you want, you can change it at any time, and that will shift the premium amount. We use to pay about $650 a month for 3-person family and we had a lot of “extras” like copays for doctor visits and a whole lot of other stuff. I recently decided to cut out a lot of the extras since we really don’t get sick often and keep the major stuff. We now pay a little over $400 a month for all of us. But we are responsible for all our doctor appts, except annuals. We have to cover most all diagnostics, etc.

    It isn’t great coverage, I think we have a $4 or $5K deductible, but my main goal was that if we are faced with a major illness, we’re covered. My father was in hospital recently, ICU, for less than a week, and the bill before insurance was $170K. That would break all of us if we didn’t have insurance. Honestly, we can’t afford to NOT have it.

    If we have minor problems, it isn’t cheap, but if you add up the cost of higher premiums, you can cover the cost of a couple minor things each year. When my daughter went to the emergency room last year for a stomach problem, I think it cost us around $500 or so, when under better, employer insurance it probably would have been $50. But I’m saving hundreds a year so I feel like I can swing that. Lots of doctors will also give you a different rate if you don’t have coverage for office visits. I’ve also gone to Canada for some of our meds, which saved hundreds.


  7. Wow, Michele C. – that’s some really helpful info.


  8. I’ve never been freelance, but my bf’s best friend and his wife both were until recently. I’m not sure what plan they were under (I think through freelancer’s union, he’s a cameraman and she is a producer/sound girl) but I know they were paying about $500/month per person. He has crohn’s disease though, so going without insurance was not an option, and there were many months where he got far more than $500 worth of treatment. now, she took a job doing production at con ed, making a little less money i think but has great insurance, so they are saving $1000 a month.

    this comment is getting long but i will say that my family had no insurance for a long, LONG stretch of my life and we were so, so lucky that no one got terribly sick. my mom actually took a job in the mid-late 90s just for the insurance, a couple of weeks before my dad had his first heart attack.


  9. Erica: I don’t think you’re alone there. That’s the scary thing. I think a lot of families are going without it and just praying.

    I can’t imagine NOT having it right now. In the last two months we’ve been to the ER twice for Emory. No way we could have paid for that. And that doesn’t include the doctor’s visits for illness, asthma, vaccinations, his urologist, etc. I am not sure how people go without it.

    However, my father recently figured out how much he paid out working for so many years on health insurance and how much we actually used. Obviously we paid out far, far more money than necessary. Granted, no one wants to take that risk, which is why he paid for it for so long. But in hindsight, you kinda gotta wonder if you should have taken all the money you would have paid out and just put it in an interest-earning account. At the very least, should you never ever use it, you can leave it to loved ones. heh not sure if that makes sense.

    I guess the tricky part there is, say you start off with only 1000 dollars and you get sick right away and owe 25,000. Naturally, you’re f*cked. So, i guess the savings plan fails to work as well.

    I’m rambling. As usual.


  10. After reading all of this, I realize I should go hug my boss, like, NOW.

    I work for a very small business (just the owner, me and one contractor) and my boss just got us all individual plans through NASE. It comes out of my account and he reimburses me every month and to be honest, I thought it was high until reading some of the above comments. I’m single and my premium is something like $170 per month (for the insurance, the NASE membership is $10). I have one of the policies where I chose the options I wanted, like prescription copay and yearly exams. It will cost me somewhere around $1000 to break something but it’s by far the best route my boss has been able to find for us.

    I also like the idea because there wouldn’t be an increase if I were to lose my job, since it’s my plan in my name already.

    One of the other cool things about being a member of NASE is that there are tons of other perks like hotel, car rental and airline discounts.


  11. I agree with Joanie. There are also a lot of other benefits with NASE that I don’t take advantage of. The insurance is affordable and customizable, which makes it work. I’ve had it for 7 years so it must be working for us. I do love that I don’t have to be tied to a job for insurance.

    I’ve thought about how much we pay over the course of our lives and to some degree I think a lot of the coverage is a lot more than most of us need. Annuals, well-baby, prescriptions and major medical coverage is really what most of us need in case the worst happens and to monitor preventable conditions. I’ve had too many friends and relatives diagnosed with serious conditions lately — cancers, auto-immune diseases, joint problems…and treatments would break them without coverage.

    Remember: The number one reason for bankruptcy filings is medical bills.


  12. At our business, we cover everyone. Of course it helps that no one else is married or has kids, but I would cover them. I understand why businesses don’t cover it anymore though because the rates increase by double digits EVERY year. It increases by double digits EVERY time someone hits a new decade in their life. It’s painful financially and sometimes I wonder if our employees that it’s rare that companies do that anymore.

    Health insurance premiums are more than our office rent. It’s horrible. I could hire another employee for what we pay in health insurance for 8 of us. Also, the difference between what I paid monthly in my mid-twenties as a freelancer was HALF of the cost I started paying for myself when I got healthcare as a business.

    Healthcare isn’t an option, risking it isn’t an option. My husband has had 2 surgeries in the last 3 years, both of which were over 60k – we paid less than 4k out of pocket. I had a child, 40k, but I didn’t pay anything. California must be cheaper because I have a 100% plan that’s just over $500/month. A PPO plan is just over $300/month. (Yes freelancer rates were half that). Maximum out of pocket is 4-5k. That’s the big kicker, the big number to pay attention to – what could you painfully afford to pay if something tragic happened?


  13. I was just told a week ago our company is dropping our health insurance and we had to look for our own. I was lucking for the time I’ve been working there that they’ve always paid 100% my premium but if you added a family member, well then that’s 100% on the employee to pay. I had a baby last year and just for her we paid $420 a month. I always shopped around rates but none of the plans even came close to how good the plan was that we had and paid a pretty penny for. My daughter was born 5 weeks early and was in the NICU for 2 days. Her bill… just for her and she didn’t have any medical problems (just needed to gain weight and learn to eat) was $49,000. Total we paid $1500 with the deductible and out of pocket. That’s it… lol that’s it, I say. Really that’s even too much but with what it could have been. Oh man, we would go bankrupt.

    Now flash forward, just a month ago we finally found a reasonable plan for our daughter that’s only $85 a month. The deductible and out of pocket is higher but it’s a risk we need to take because my husband doesn’t have a job (ie no health insurance). Well he does have a job, he’s a realtor… we all know how that is. So he buys his own insurance (BCBS of IL) for about $140 a month. NOW, I have had to scramble for insurance for myself. We decided on a family plan for $300 a month with a $1750 deductible and $3000 out of pocket, 80/20 plan. Copay $30. I’m nervous because I am on a cholesterol medicine and I have no idea what my insurance will pay. We have no extra money at the end of the month. It’s been hard but we keep holding out hope my husband will get a job soon and we won’t have to worry so much about the health insurance.

    Oh and to had fuel to the fire this new plan doesn’t have a maternity plan. If I got it, it’s and extra $130 a month… and I can’t get pregnant for 365 days from the start of the plan. Nice huh. It’s all so sickening that these health insurance companies hold us in such fear and by the balls so to speak.


  14. My husband is the sole propietor in his own business, and I am a stay at home mom. We have 2 separate policies, one for the baby and one for us. The baby’s cost $128.55/month, through a Humana PPO. It covers vaccinations, well visits, sick visits, labs, pretty much what we need for her. She has a $35 copay, but I’m not sure what her deductible is.

    Our insurance (BCBS) costs about $350/month for the 2 of us. We have a $3000 family deductible. We have prescription coverage, and maternity coverage (but that doesn’t kick in for 24 months from getting the insurance). So, when I go to the doctor, the claim is submitted to insurance, insurance decides what it will pay, and then we are billed for the remainder, with that going towards the deductible.

    As Michele C. says, it isn’t great, but we have it for something catastrophic. We can’t afford to NOT have insurance.


  15. Most of these independent plans don’t cover maternity. I had an exclusion that if I were to ever become pregnant again (not at all likely) that they would not cover anything since my first was a c-section. Most hospitals, though, have pre-paid birth rates that you can coordinate up front and you’d be surprised at how much more affordable they are than the number they bill your insurance company. If you have massive complications, though, well, screwed. I think if you have a baby that child is covered under your policy, but you may have to coordinate to get that child on the policy before the birth. I think there is some law about that.

    It is clear that all doctors and hospitals double, triple or worse their fees when the bill goes to insurance. I believe that is a huge part of this problem. If the doctor will charge me $70 for an office visit, why are they billing the better insurance $120 for that very same visit? Why you ask…because the insurance company will pay it. See the problem? You may only need one diagnostic test, but hell, your insurance will pay for 4 so do all four. You know all those commercials for the old people scooters? Well Medicare will pay $12K each for those things, but they only actually cost about $3K so the companies marketing them are making gigantic profits while we all struggle to get the most basic coverage.

    I think doctors struggle too. They are caught between insurance companies and health care businesses like for-profit hospitals and other groups and patients and trying to make lives for themselves with huge educational expenses to recoup.

    FYI – the Canadian pharmacy I use is called Very easy to use. You can search prices online and compare with what you’re currently paying to see if you might be able to save money. My daughter was prescribed a med that cost upwards of $200 per month and I got a generic version that isn’t available in the US for more like $100 for a 3-month supply. I wouldn’t have been able to afford the $200/month and the med makes a huge difference in my child’s life.


  16. Another thing that is really awesome these days are some of the large chain store’s generic drug programs. The insurance I had before didn’t have a prescription plan so I actually got a list from Kroger (the best around here) and took it to my doctor to see if there was a birth control on it similar to what I was taking and there was. That took my monthly bill from $60 to $10 right away. There are also plenty of antibiotics and just about anything I personally have had to take in two years for $10 or less.


  17. We took the easy route and have kept one person employed with a company while the other freelances, just to keep good health insurance. As the healthcare system is set up currently, we could not find a better option that we could 1) afford and 2) were comfortable with. After an accident this past year which required surgery, a week in the hospital, and several months of outpatient rehab, our bills would have been over $75K without insurance.

    I wonder how much innovative small business is curtailed in the US by the health insurance issue? I can imagine that there are a lot of potential entrepreneurs out there who do not go that route because of health insurance.


  18. I work for a medium sized nonprofit and the health insurance for me is totally free (no premiums for health, of course there are copays and stuff though) but if I were to add another person, we would pay $500+ per month, which I did for 2 years at another job previously. So we got a separate, high deductible policy ($3000) for my husband for $100 per month. He’s freelance of course. Figured it wouldn’t be a big deal since he hadn’t actually even seen a doctor in 5+ years. Then last year he started having severe abdominal pain which ended up in surgery to remove his gall bladder after months of tests and uncertainty. We paid about $11,000 out of pocket, well over the $3,000 that was supposed to be the cap.

    The money spent is huge of course, but the bigger problem for us was how complicated and obscure every single interaction with the insurance company was. They were not helpful at all, didn’t explain anything, kept sending ridiculous bills that didn’t necessarily match what the doctors’ offices sent, etc. One of the doctors actually just chopped a bill down a few thousand dollars, but Blue Cross Blue Shield (now “Anthem of CA” or something) didn’t help at all.

    I am sure we could have found some way to reduce the costs if we could have understood what they were doing. I feel terrible because we eventually gave up and just paid.


  19. We don’t live in NY, so take this with a grain or two…

    We tried to get a family plan through a few different insurance companies. The biggest eye opener is that most of the health plans advertised online are administered by local monopolies. So you talk to the same people if you just went straight to the insurance co.

    We were denied every time.

    We ended up getting individual plans through a state program of “high risk” coverage that will cover you if you can’t get insurance anywhere else. It’s not cheap and it’s not comprehensive. We have a high deductible and pay a monthly fee for each family member. It’s not as expensive as coverage in a larger city, but it’s still far more than the few hundred/month from an employer plan.

    One tip: look into employee leasing. You basically lease yourself out and back to your company, but the leasing company has a group plan you can buy into. It wasn’t feasible for us, but you might find it more amenable.

    It’s time for change in the U.S. I believe the current system is stifling entrepreneurship and innovation in a massive way. But that’s my soapbox and I have a blog for my rants. :-)

    Good luck.


  20. Having lived in both states, insurance in CA is roughly 1/2 the price as NYS. It’s pretty shocking.

    You can go on one of the ‘instant quotes’ sites and put in different states to see the differences for yourselves. If you need to give them an email, try , which you can then check.


  21. Look, take this for what it’s worth — I work for an organization that primarily focuses on the quality of medicines and the massive “industry” of counterfeits, so I am keenly aware of the dangers of ordering medicines online. I realize people do it all the time, and I also realize that I hear more of the horror stories than most people. I won’t try to convince anyone here to change their position on ordering meds from an international pharmacy, but I will paste in this quote, taken from the home page of Canada Generic (similar taglines are listed on similar sites; I’m just using this one since it was specifically mentioned): “The FDA, due to the current state of their regulations, has taken the position that virtually all shipments of prescription drugs imported from a Canadian pharmacy by a U.S. consumer will violate the law.”


  22. My company employs 12 full-time and between 3 and 5 part-time workers. Insurance has always been a major issue for us – trying to decide whether to offer it as a benefit, or let everyone fend for themselves. Eventually we settled on offering a BCBS Small Group plan to our full-time employees, and it has worked out pretty well. Since we have a young staff, we selected a high-deductible plan ($1200 for single, $2400 for family) and pay the first $1200 of the deductible for our employees (if they use it). I believe our premiums are around $300/mo for a single person, which our employees are responsible for. I haven’t heard a lot of complaints and the coverage is solid.

    Things get compounded if you have employees in multiple states, since so much of the health insurance industry is regulated at the state level. That’s a topic for another time, though.

    It’s not fun to have to find your own insurance – particularly if you have some a chronic illness or disease in your immediate family. We rely heavily on our health insurance and have come to the realization that we likely can’t (ever) work for a firm that doesn’t offer full group benefits. It’s a harsh reality, but I’m hoping the next couple of years will bring some new options for people in unreasonable situations.


  23. I understand there are risks with foreign pharmacies. But there are risks and high profile cases of problems in American pharmacies and with American doctors for that matter. There is risk everywhere and the FDA disclaimers are there to protect them from a legal standpoint.

    I have to admit a bias, I do have a problem with the pharmaceutical industry’s business practices.


  24. I am really fortunate that I get (relatively) affordable health insurance through work, though it’s still pretty expensive (I work for a small company, and there’s only so much they can do in terms of contribution, given that, as someone else mentioned, rates increase by double-digit percentages every year) and it’s an HMO plan, so it has its limits. That said, I realize I’m fortunate.

    What terrifies me just as much as being without insurance, though, is how shady insurance companies are even when you have paid into them for years.

    Michele, I posted this on Facebook, so you may have already seen it, but what this article reported just infuriated me:,0,3508020,full.story

    Quote: “It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.”

    The examples are so messed up, I can’t even begin to fathom. So, even if you are fortunate enough to have insurance you can afford, there’s a possibility that if you get really sick, the kind of sick where you desperately need that insurance, they can drop you, even AFTER the fact, so that you have to pay retroactively. That is f-ed up.

    I agree with blurb, now is really the time for reform. I can’t imagine reading any of these recent articles about the recent government meetings with health insurers, and hearing what those insurers have to say, and still thinking that some system of universal coverage isn’t a good thing.


  25. Just a thought: If you’re investigating high deductible plans or already have one(not less than $1200 ind. & $2400 for family in 2010) you should also look into starting a tax deductible Healthcare Savings Account. has info. I’m sure other sights do too. Since we share the premium with my employer it wasn’t as financially painful for us to start an HSA. It saved us money on our taxes for the last two years, but I’m not sure if it helps if you can’t itemize your deductions.


  26. WOW! After reading what everyone has written, it makes me seriously reconsider coming back to the states at all!


  27. I live in NYC.

    I used to work for a small company – for most of the time I was there, the company consisted of me and my boss. My boss covered the entire cost of my premiums. Initially, in 1995, the premiums were around $350 for just me. When I got married in 2005, I was covered under my husband’s plan and my boss paid the part of our premium cost that my husband’s boss didn’t pay, which ended up being about 40% of the premium cost – it was about $550. Now my husband has a new employer and I am unemployed. We have a 2 year old son. My husband’s employer pays only for my husband’s coverage, and we have to pay for my coverage and our son’s coverage. The total cost for all 3 of us is $1,430 a month – of which we have to pay $940! This is REALLY hard on one salary, especially with the high cost of housing in NYC. Luckily, the plan we have covers almost everything – there’s no deductible, we pay $20 copay for doctor visits, $5-$35 for prescriptions, and $50 for ER visits. I think hospital stays are covered entirely.

    We picked the cheaper of 2 options my husband’s employer offers. We were willing to get health care through other alternatives with high deductibles, etc., but we couldn’t find any for less than the $940 we are paying that didn’t look like we might be left with huge scary gaps in our coverage. (Of course, if we had major mental health issues, we’d still be screwed, as very few mental health professionals even take insurance, and insurance puts pretty high limits on outpatient care …)

    I’m terrified of being without insurance. The great thing about New York State (and I believe also Maine, Massachusetts, New Jersey, and Vermont) is that everyone is in the same pool. This means that everyone pays the same price for the same plan and, regardless of your health, if you can pay the premiums, you can’t be denied coverage. Also, if you have no gaps in your coverage (in other words, if there was no period when you were uninsured) you can’t be denied coverage for a pre-existing condition
    (if your plan covers that condition). (This part may be Federal law now, but you have to be able to get coverage for it to mean anything! At least you can get coverage in NY – if you can scrape together the money.) I’m sure I would have trouble getting health care at all in most states. I have Multiple Sclerosis – and although, thankfully, I am completely asymptomatic, health insurers probably wouldn’t touch me with a ten foot pole if I had to get coverage on my own in a state that could deny coverage. I also have a history of cancer in my family, so …

    It seems the cost of insurance was going up at a steady, but slow, rate until the last few years, when it has just shot up. It’s really scary. You buy it and it eats up all your money, but if you don’t buy it, you could lose everything, including your life.

    One of my best friends, who lived in OH, didn’t have health insurance for a long time. When she finally got coverage through her employer, she went to the doctor for a check-up and found out she had cancer. She was dead within a few years. Lack of healthcare probably killed her. If she had had insurance, she would have seen a doctor on a regular basis, and may very well have lived. She still may have died, but she certainly would have had a better chance at life. The ironic thing is that her new health insurance didn’t cover cancer! How can any one sell health insurance that doesn’t cover cancer! The double whammy was that she earned so little money that she was somehow able to get almost all her bills paid by various State, Federal, and charitable programs. So she didn’t use the insurance anyway! Ugh!

    Sorry this post is so long – hope it at least makes some other people feel a bet better about what they are paying for their healthcare!


  28. I was actually researching more affordable health insurance options when I stumbled across your wonderful site.

    I am a freelance writer and a cat sitter, and I have to buy my own health insurance. I am a member of New York Women in Film and Television and buy an individual Oxford Freedom plan through them for almost $550 a month.

    The coverage is great, but the monthly premium is expensive, so I have been looking into other possibilities.

    Unfortunately, there aren’t many great options out there.


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