Getting Health Insurance If You’re Self Employed

Self employment offers a lot of freedom for the lucky and dedicated people who make it their lifestyle. A self employed person has the ability to set his or her own schedule and to grow his or her career as high as the sky without needing to deal with the workplace politics that can stunt so many aspirations. Instead of waiting to be promoted, self employed people are able to take control of their career advancement. However, it can be difficult for any self employed person to take control of his or her health insurance.

Carrying health insurance costs can be a sizable burden, especially if you are just starting out a new career. Many people yearn to make the jump to being self employed, but even the most careful planners often underestimate the real monthly cost of health insurance. Before you decide to realize your dream of self employment, it is important to consider how much you may end up paying for health insurance if you do become self employed. Gather as much information as you can; find about the possible rates you will need to pay to cover yourself and any dependents that you have; and make sure that you factor those figures into your budget.

As a self employed person, you cannot take advantage of the kind of bulk rates that a traditional employer pays to cover his or her employee?s health insurance costs, which is one reason why insurance rates for self employed people are so high. However, with a bit of research you may discover that you have access to a low bulk insurance rate through a non-corporate affiliation. Look into insurance programs related to educational institutions that you or a family member is affiliated with, and find out if your religious background might enable you to join an organization that can offer you a discount on your health insurance, like the B?nai Brith.

If you are not already a member of a group that can help you get an affordable health insurance rate, consider what groups you may be eligible to join. The Freelancer?s Union was created in part for the purpose of allowing self employed people to get health insurance at discounted rates by bringing freelancers together. Look into options in your local community as well as nationwide organizations like this union. Sometimes, finding affordable health insurance as a self employed person is just a matter of being resourceful and thinking creatively.

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Different Types of Health Insurance in California

Whether you buy group or individual health insurance in California, the options you have regarding the different types of health insurance are generally the same. In some groups you can even choose from available plans. These different types are traditional health insurance, health maintenance organizations (HMOs), and preferred provider organizations (PPOs).

California goes beyond the Federal requirements for offering health insurance to its residents. Examples of this include Industry Advantage plans (IAHP), short-term health policies, Insurance for high risk Individuals and special plans for children and teens.

Additional Health Insurance in California
The traditional health care delivery system is based on a fee-for-service type of arrangement. In a fee-for-service system, you pay or each itemized medical service you receive. In the days of the frontier, “Doc” often received a chicken as payment. Today, physicians are paid with money, lots and lots of it. Fee-for-service health insurance recognizes this practice and is designed to reduce or even eliminate your duty to pay directly for your medical care. Traditional health insurance comes in three parts:

California has four basic options for choosing a health care plan:

1. 1. Health through an employer or association
2. 2. Health Insurance through Income eligibility such as Medicaid
3. 3. Health care for high risk individuals such as those that have had cancer or a heart attack
4. 4. Private Insurance

Hospitalization
Hospitalization covers defined expenses incurred while in the hospital. Generally, the insurance will pay for all of the covered services rendered by the hospital staff. However, if the insurance benefit is an indemnity payment, the payment will be for a fixed sum regardless of the actual expenses incurred. This fixed sum will usually be far below the daily charge actually made by the hospital.

Medical/surgical
This part of a traditional health plan covers the expensive costs of medical care other than the bill from the hospital. Services such as doctor visits, treatment charges, etc., are covered here. Medical/surgical usually has a deductible and requires co-payments by the insured (payments you make for charges not covered by the insurance), typically 20 percent of the doctor’s fee.

Catastrophic or major medical
There are usually lifetime maximum payments that hospitalization and medical/surgical plans will pay, after which the well runs dry. Unfortunately, these maximums may not be sufficient to pay for all of the care required if a major illness or injury should strike, since such afflictions can eat up hundreds of thousands or even millions of dollars worth of health services. Thus, catastrophic coverage adds to your umbrella of protection in an amount sufficient to protect you from the horrendous expenses of such serious and prolonged illnesses. These policies also fill in some of the gaps not covered by hospitalization or medical/surgical.

Health Maintenance Organizations or Private Insurance in California
The health maintenance organization (HMO) is a relatively new player in the health insurance game, although it has been around in a limited fashion since the 1930s. The idea behind an HMO is to pay one premium and receive all of your health care at no or a nominal additional cost. The point is to save money compared to traditional health plans that cost more to purchase and require more out-of-pocket payments from the insured. What you, the insured, give in exchange for reduced cost is a substantial loss of your freedom to choose who will take care of your health needs.

Preferred Provider Organizations
Preferred provider organizations (PPOs) seek to give both the benefits of traditional health plans and the money savings of HMOs. They do this by paying higher benefits as a reward for your using the doctors or hospitals they preselect for that purpose.

Disability Insurance
Disability insurance does not pay for health care; rather it pays for lost wages caused by a disabling injury or illness.

How Health Insurance Is Priced
Ask anyone how health insurance is priced and you will get a simple answer: expensively! Beyond that, there are underwriting criteria used by health insurance providers, whether they are for-profit or, like Blue Shield/Blue Cross, nonprofit.

Underwriting Criteria
Age
The older you are, the more likely you are to get sick; therefore, the higher your health insurance premiums will be.

Number of people covered
Many people buy family coverage rather than individual policies. This means that there will be adults as well as minor children protected by the same plan. Some companies will charge based on the size of the family. Others charge a basic family rate without regard to the number of members.

Gender
Unlike life insurance, where women get the better end of the bargain than men, in health insurance women often pay higher premiums. This is based on health insurance industry statistics which indicate that the female of the species tends to need medical care more often than the male.

Health history
Insurance operates on statistical probabilities. If you have had a poor health history, statistically you are more likely to have a more expensive health care future. This, in turn, means that you will pay higher premiums-if you can get health insurance at all.

Occupation
The more likely you are to suffer injury or illness because of the work you do, the more likely the health insurance industry will be to charge excessively for benefits. This may be well and good for professional deep-sea divers. But the industry has begun to stretch the concept into areas that have nothing to do with the inherent danger of the work.

Lifestyle
In your application for health insurance you will be asked questions about your personal habits. Your answers will have a lot to do with the cost of your premiums. If you smoke, you will probably pay more for health insurance. If you drink to excess, you will probably pay more for health insurance. If you are known to be under a great deal of stress, you may pay more for health insurance. California does reward the health care Insurance consumer with lower premiums if they have practiced good health policies.

One of the most important things you can do as a health care consumer is to engage in preventive care. Not only will you be able to spot serious diseases at an early stage, thereby increasing your chances of effective treatment and cure, but you should be able to save money as well, since it is usually far less expensive to treat a disease when it’s a molehill rather than a mountain.

About The Author:
Medical-Ins.com is a leading broker of health insurance in California. We provide detailed information and cost breakdowns of Blue Cross, PacifiCare California and many more. Visit our site for a free quote and to help sort through the various health insurance plans to find the more affordable option for your family.

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5 Basic Facts About Health Insurance Policies In A Bad Economy

1. DOES YOUR PLAN COVER YOU ON AND OFF THE JOB?

Many health insurance plans have specific exclusions that eliminate your benefits for anything that could have been covered under Workers Compensation or similar laws. Now read that last sentence again.

COULD HAVE BEEN COVERED!?

That is correct. Most self employed people and even some small business owners do not carry Workers Comp on themselves.

There are designed insurance plans that will cover you on and off the job ? 24-hours a day, if you are not required by law to have Workers Compensation coverage.

2. ARE YOU WRITING IT OFF?

Independent contractors (1099′s), home based business owners, professionals and other self employed people generally are not taking advantages of the tax laws available to them.

Many people who are paying 100%PRCTG% of their own costs are eligible to deduct their monthly insurance payments. Just that alone can reduce your net out-of-pocket costs of a proper plan by as much as 40%PRCTG%. Ask your accounting professional if you are eligible and/or check out the IRS website for more information.

3. INTERNAL LIMITS
All true insurance plans use some form of internal controls to determine how much they will pay out for a particular procedure or service. There are two basic methods.

-Scheduled Benefits

Many plans, some of which are specifically marketed to self employed and independent people, have a clear schedule of what they will pay per doctor office visit, hospital stay, or even limits on what they will pay for testing per 24-hr. period. This structure is usually associated with “Indemnity Plans”. If you are presented with one of these plans, be sure to see the schedule of benefits, in writing. It is important that you understand these type of limits up front because once you reach them the company will not pay anything over that amount.

-Usual and Customary

“Usual and Customary” refers to the rate of pay out for a doctor office visit, procedure or hospital stay that is based on what the majority of physicians and facilities charge for that particular service in that particular geographical or comparable area. “Usual and Customary” charges represent the highest level of coverage on most major medical plans.

4.YOU HAVE THE ABILITY TO SHOP!

If you are reading this you, are probably shopping for a health plan. Every day people shop, for everything from groceries to a new home. During the shopping process, generally, the value, price, personal needs and general marketplace gets evaluated by the buyer. With this in mind, it is very disconcerting that most people never ask what a test, procedure or even doctor visit will cost. In this ever-changing health insurance market, it will become increasingly important for these questions to be asked of our medical professionals. Asking price will help you get the most out of your plan and reduce your out-of-pocket expenses.

5. NETWORKS AND DISCOUNTS

Almost all insurance plans and benefit programs work with medical networks to access discounted rates. In broad strokes, networks consist of medical professionals and facilities who agree, by contract, to charge discounted rates for services rendered. In many cases the network is one of the defining attributes of your program. Discounts can vary from 10%PRCTG% to 60%PRCTG% or more. Medical network discounts vary, but to ensure you minimize your out-of-pocket expenses, it is imperative that you preview the network’s list of physicians and facilities before committing. This is not only to ensure that your local doctors and hospitals are in the network, but also to see what your options would be if you were to need a specialist.

Ask your agent what network you are in, ask if it is local or national and then determine if it meets your own individual needs.

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Commonwealth Of Virginia Low Cost Health Insurance

If you live in the Commonwealth of Virginia and are looking for low cost health insurance, you and/or your children may be eligible for coverage under one or more of the three FAMIS health plans sponsored by the Commonwealth.

The three FAMIS (Families Access to Medical Insurance Security) plans are as follows:

FAMIS ? The Children’s Health Insurance Program: This program for children covers services such as:

doctor visits
Well-baby checkups
Hospital visits
Vaccinations
Prescription medicine
Tests and x rays
Dental care
Emergency care
Vision care
Mental health care

FAMIS ? Moms: This program provides health care for pregnant women up to two months after the pregnancy.

Smiles for Children: This program provides diagnostic, preventive, restorative/surgical procedures and orthodontics (Basically the same coverage as provided through Medicaid) Since this program is primarily for children, it provides limited necessary diagnostic/oral surgery services for adults (emergency only)

The beauty of this program is that the co-payments are only %2.00 or %5.00. Regular check-ups are free and there are no monthly premiums or enrollment costs. With Smiles for Children, there are no co-payments or cost for dental services. However, you must use dental providers that are within the network.

To qualify for any of the FAMIS programs the applicant must be a US citizen under 19 (for the Children’s program), live in Virginia and not covered by another plan. You must not have had insurance for 4 months and are not eligible for Medicaid. There are also income requirements. For example, the gross income for a family of 4 must not exceed %40,000 annually. The FAMIS website (http://www.famis.org ) has a family income calculator in which potential insureds may check their income to see if they qualify.

The Commonwealth of Virginia realizes that quality medical care is important, and has successfully provided a low cost health insurance program for their low income residents.

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Catastrophic Health Insurance Coverage

A catastrophic or major medical insurance plan is a deductible and comparatively cheaper form of health insurance with an element of speculation to it. A deductible is the amount you pay out of your pocket for medical expenses before the insurer pays the balance. For instance, if your deductible is %5,000 and the hospital bill is %12,000, the insurance company will pay only %7,000. The general rule is the higher the deductible, the lower the premium. When you opt for this plan, you’re gambling that you will not face major medical problems in the near future.

It is a calculated risk. According to one survey, the annual medical expenses of 90%PRCTG% of the U.S. population are less than %2000; for 73%PRCTG%of the population, it is below %500.

Two groups that normally opt for catastrophic health insurance are young people in their twenties who are confident of their health condition, and older men between fifty and sixty-five who are still waiting for Medicare eligibility.

Catastrophic health insurance coverage is only meant to protect against major hospital charges and not routine medical expenses. It normally does not cover maternity care, doctor?s visits and prescription drugs. Certain pre-existing medical conditions and cases involving mental health and substance abuse are usually excluded from the coverage. A catastrophic health insurance policy can be purchased as an individual plan or as part of a group plan. In fact, there appears to be a trend among employers to encourage employees to opt for this type of medical cover. The maximum lifetime limit could be as high as %3 million.

Rates vary according to where you live and your age. In certain states, the saving on premiums could be two-thirds. For example, a 21 year old, non-smoking female may pay as little as %30 per month as a premium.

It is advisable to seek professional guidance from insurance companies and/or agents and compare quotes before making a decision.

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