Major Medical Insurance for the Self-Employed
Major medical insurance is a type of individual health plan that provides robust coverage options tailored to the needs of the self-employed. In this article, we’ll explore major medical plans in-depth, look at key factors to consider when shopping for coverage and provide sample quotes from five top insurers to give you an idea of potential costs.
Benefits for the Self-Employed
There are several reasons why major medical insurance can be a practical option for self-employed individuals:
- Lower premiums – With high deductibles, monthly premiums tend to be 20-60% less than typical plans. This makes coverage more budget-friendly, especially when cash flow varies.
- Coverage customization – You can tailor the plan to fit your needs in terms of the deductible, coinsurance percentage, out-of-pocket cap, and covered services. This personalization provides financial protection tailored to your situation.
- Portability – Since policies are not tied to an employer, you can take the plan with you if you switch jobs or move. This prevents coverage gaps that could be disastrous if you develop a serious illness.
- Tax advantages – Self-employed individuals can deduct health insurance premiums from their federal income taxes, reducing the overall cost burden.
When choosing major medical coverage, it’s essential to model out your potential costs at different deductible and out-of-pocket levels. While the premium might be enticing, a plan with a $10,000 deductible and $15,000 out-of-pocket maximum could saddle you with unaffordable bills in the event of a medical emergency. Balancing premium savings with realistic worst-case costs is key to finding the right plan.
Comparing Top Insurers
The cost of major medical insurance can vary significantly by insurer. To get an idea of price ranges, here are sample quotes I obtained for major medical coverage from five highly-rated national insurance companies:
UnitedHealthcare
– $5,000 deductible
– 80% coinsurance
– $10,000 out-of-pocket maximum
– $300/month premium
– $25 copay primary doctor
– $75 copay specialist
– $500 ER visit copay
Blue Cross Blue Shield
– $3,000 deductible
– 90% coinsurance
– $8,500 out-of-pocket max
– $425/month premium
– $30 copay primary doctor
– $60 copay specialist
– 10% coinsurance inpatient/outpatient care
Cigna
– $7,500 deductible
– 80% coinsurance
– $12,000 out-of-pocket max
– $235/month premium
– $40 copay primary care
– 20% coinsurance inpatient/outpatient
Aetna
– $2,500 deductible
– 50% coinsurance
– $8,500 out-of-pocket max
– $375/month premium
– $50 copay primary care
– $100 copay specialist
– 50% coinsurance inpatient/outpatient
Humana
– $5,000 deductible
– 80% coinsurance
– $10,000 out-of-pocket max
– $289/month premium
– $35 copay primary care
– $70 copay specialist
– 20% coinsurance inpatient/outpatient
The quotes illustrate how coverage details and pricing can vary significantly between reputable national carriers for similar plan designs. Comparing a minimum of five major medical insurance quotes is recommended to find the right balance of coverage, cost, provider network, and insurer reputation. Utilizing an independent insurance broker can also streamline the process of securing and comparing quotes.
Factors to Consider When Choosing a Major Medical Insurance Plan For The Self-Employed
When evaluating major medical policies, there are several important factors to take into account beyond just the monthly premium:
- Deductible amount – The ideal deductible balances premium savings against upfront costs you can reasonably afford. Estimate your expected healthcare expenses when selecting a deductible.
- Coinsurance – Most plans cover a percentage of costs after the deductible, commonly 80-90%. The higher the coinsurance, the more coverage the plan provides.
- Out-of-pocket maximum – This cap limits your total potential expenses. Select an amount aligned with your budget and assets. Lower caps mean higher premiums.
- Network of providers – Check that your preferred local doctors participate in the insurer’s provider network to ensure coverage.
- Prescription drug coverage – Many major medical plans exclude pharmacy benefits. Determine if you need separate prescription medication coverage.
- Excluded services – Some plans do not cover certain services like maternity care or mental health. Choose a plan that aligns with your healthcare needs.
- Customer service – Insurer reputation and helpfulness can impact your experience if billing or coverage issues arise. Research companies’ service ratings.
Consulting with an independent insurance agent or broker can provide expert guidance on choosing a tailored major medical policy for your situation and budget as a self-employed individual.
Leveraging Supplemental Plans
While major medical insurance provides core protection against high costs, supplemental plans can be useful add-ons to fill potential coverage gaps:
- Health savings account (HSA) – HSAs pair pre-tax savings with high deductible health plans to help offset out-of-pocket costs. HSA funds can be invested and grow tax-free when used for medical expenses.
- Accident insurance – Accident policies help cover costs like ER visits, hospitalization, or disability income in the event of an accidental injury. This provides an added financial safety net.
- Critical illness insurance – These policies pay out lump sums upon diagnosis of major illnesses like cancer, heart attack, or stroke. The funds can be used to pay treatment costs or replace lost income.
- Short-term disability insurance – If an injury or illness prevents you from working for a period of time, disability coverage replaces a portion of your lost income by paying monthly benefits.
- Telehealth membership – Telehealth provides 24/7 access to doctors by phone or video chat. Low-cost subscriptions can be worthwhile to obtain timely care and avoid ER visits.
Bundling major medical coverage with supplemental plans allows you to craft robust protection against both high and routine healthcare costs as a self-employed individual.
Managing Healthcare Costs
Since major medical plans involve cost-sharing and high deductibles, managing overall healthcare expenses is important. Here are some tips:
- Stick to in-network providers – Using out-of-network doctors and facilities results in higher out-of-pocket costs. Verify providers are in-network before obtaining care.
- Use preventive care – Most plans cover preventive services like annual checkups without a deductible. Staying healthy helps avoid illness and the resulting medical costs.
- Consider alternatives for elective care – For minor illnesses and injuries, telehealth, urgent care, and retail clinics can provide lower-cost care options.
- Negotiate bills and payment plans – If you receive a high medical bill, negotiate with the provider for discounts or extended payment arrangements to ease the financial hit.
- Scrutinize EOBs – Carefully review the explanation of benefits statements from your insurer and follow up on any discrepancies.
- Maintain an emergency fund – Having liquid savings earmarked for healthcare costs helps cover costly deductibles or coinsurance if a medical crisis arises.
Conclusion
With smart planning, major medical insurance can provide vital financial protection for self-employed individuals and families while keeping premium costs affordable. Assessing your needs and comparing policies to find the right plan match is key to navigating this pivotal coverage decision. Compare quotes online or reach out to an independent agent or broker to discuss your specific situation and review rates.