Self Employed Medical Insurance

Medical bills are the cause of more than half of all personal bankruptcies in the United States. Lacking a national push, many states have began seeking ways to tackle the health insurance problem on their own, and we talk about some of these initiatives on our state-specific pages. The good news for the solo entrepreneur is that an increasing number of companies are offering group health plans for “groups” of one. This varies by state though so you’ll need to do your homework to find one. They’re subject to medical underwriting so your state of health will be a factor the insurance company takes into account in determining whether to accept your application. For more information on risk pools in your state, contact your state health insurance department, the national association “Communicating for Agriculture and the Self- Employed” (1-800-432-3276) or visit http://www.selfemployedcountry.org.

Not everybody can buy an individual plan. In many states, including California, insurance companies are allowed to reject applicants for individual policies for any medical reason, including common conditions such as asthma and varicose veins.

How fitting. The money in the MSA can be used to pay any medical expenses incurred before the deductible is reached, as well as other eligible costs such as contact lenses and dental work. The money goes into a tax-deferred account or trust and you pay your medical expenses (until you reach the deductible) by drawing from the account. The deduction can only be claimed for months when you weren’t eligible to participate in a subsidized health plan from another employer (including your spouse’s employer). Self-employed workers who qualify for both the self-employed health deduction and the itemized medical deduction can write off the other 30% this year on Schedule A. (Medical expenses are deductible on Schedule A only to the extent they exceed 7.5% of adjusted gross income.)

A Journal of Financial Planning analysis calculated that if you contribute $1,500 per year into an MSA for 25 years, assuming a 12% rate of return, you’ll end up with almost $1.5 million. That’s assuming you don’t draw from it to pay for medical costs, of course.

More than 8,000 people with coverage through the California Assn. of Realtors could be next if Blue Shield of California succeeds with its plan to cancel the group’s health coverage. “You didn’t plan on that. It’s really scary.” Cigna, which carries the engineers organization’s plan, also underwrites the group plan of an association of performers, writers and photographers known as TEIGIT. Saying that group’s medical expenses were exceeding premium revenue, Cigna raised rates in January as much as 254% for members in California, prompting more than 150 of them about a quarter of its cadre in the state to drop the coverage. Among uninsured workers, nearly 63% are self-employed or work in small firms, Todd Stottlemyer, president of the National Federation of Independent Business, told Congress recently. Fewer than a quarter of 1,020 professional and small-business associations surveyed in February offer medical coverage, even though a majority of the groups said they would like to.
Contact the White House . You’ll also find information about the quality of health care in each listed state, and links to health insurance information for those states which can be found elsewhere on the Web which our editors have reviewed and chosen for you.

PORTLAND, Ore. (AP) - Oregon is conducting a one-of-a-kind lottery, and the prize is health insurance. The state will start drawing names this week for the chance to enroll in a health care program designed for people not poor enough for Medicaid but too cash-strapped to buy their own insurance. The Tribune-Democrat - Offering low-cost health insurance to the state”s working poor would cost the state almost $500 million next year, but that”s still a bargain, state Department of Health Secretary Dr. Calvin Johnson said.” Nearly 16 percent of Americans - about 47 million people - are uninsured. According to a story last year in USAToday , the people without health insurance aren’t just the poor - they are all of us. To be eligible, you must be a resident of the state from which you seek coverage (unless there’s reciprocity between that state and the state you reside in) and you must be able to prove at least one of the following: 1. that you’ve been rejected for similar health insurance coverage by at least one insurer; or 2. you’re presently insured with a higher premium; or 3. you’re presently insured with a rider or rated policy. For more information about how HIPAA may help you obtain health insurance even if you have a pre-existing condition, visit http://www.hcfa.gov/medicaid/hipaa/content/hipsteps.asp. They’re available only in 29 states though.

What if you have a pre- existing condition that disqualifies you from an individual health plan and you can’t get into a group plan? In other words, you can’t get insurance at any price. Not ideal but better than nothing. Since they’re not insurance policies, all pre-existing conditions are accepted. Coverage via the safety-net protections of the HIPAA may end up being “risk-pool” coverage. They’re not insurance policies but rather programs that allow you to access networks of healthcare providers for the same negotiated rates that large insurance companies enjoy. BASIC OPTIONS FOR THE EMPLOYER OF ONE (YOU) You have three basic options when it comes to health and disability insurance. It probably provides better and less expensive coverage than you could get on your own. Quite simply, you and your business can’t afford not to have health (and disability) insurance.

If I was to get a part-time job, I’d probably have to pay for my own health insurance and I know that can be expensive.” Like Jason, who sent me the above email this week, many a dissatisfied employee would chuck in their full-time J.O.B. (just over broke) for their part-time home-based business in a heartbeat if not for one thing. Although health insurance may seem like a luxury you just can’t afford if your finances are already stretched to breaking point thanks to your home-based business, you never know what’s around the corner.

REDUCING THE HIGH COST OF HEALTH INSURANCE There are several ways of minimizing the cost of health insurance. WHAT TO DO IF YOU’RE UNINSURABLE The foregoing is all well and good if you’re able to get health insurance in the first place.

Individual Coverage Individual Coverage Individual health insurance policies may be an option for people who do not have access to job-based coverage. Some states offer individual coverage to all persons regardless of their health status. High-Risk Pools High-Risk Pools Currently, over 30 states offer high-risk pools as a health insurance option for persons who are otherwise unable to qualify for health insurance coverage. Prescription Assistance Most pharmaceutical companies have established patient assistance programs to help uninsured individuals get the medications that they need to stay healthy.

The following options are available to you. Employer-Sponsored Coverage Employer-Sponsored Coverage The most common way that Americans get health insurance coverage is through their employer.

Groups of One Groups of One In some states, self-employed persons and small business owners can purchase a group health insurance policy that will cover just one person.

Insurance carriers began pulling out of association markets about 10 years ago amid mandates requiring the groups like employers to offer coverage to all members who wanted to buy it, regardless of preexisting conditions. ” If they don’t have an opportunity to go to another group and have to go into the individual market, it’s a real problem,” said Kansas Insurance Commissioner Sandy Praeger, president-elect of the National Assn. of Insurance Commissioners. That’s what worries Garber, the Encino real estate agent. Garber doesn’t know what she will do if she loses her coverage, which costs her $596 a month. “I have to be in a group plan or I’m not going to have insurance. It never dawned on me I’d have any problem with this insurance.” Another real estate agent, Hector Aguirre, 39, of Rancho Cucamonga, also thought the group’s coverage was safe. He pays nearly $1,000 a month for coverage for himself and his family. His wife has lupus and a daughter needs daily shots of an expensive growth hormone.

Many people who lose association coverage in effect become uninsurable. Insurance options of last resort COBRA conversion coverage, whose name is an acronym for the federal legislation that created it, and publicly subsidized high-risk pools are not for everybody because the coverage is insufficient or unaffordable or both. The California Assn. of Realtors and its broker, RealCare Insurance Marketing Inc., contend that Blue Shield can’t cancel the plan. ” You plan to be financially independent after retirement, and then all of a sudden you have no insurance,” said McCormick, a retired loan auditor.