THE FREE LANCE

by Tabitha M. Powledge

How to Get Medical Insurance. Maybe.

The freelance life entails a couple of unique financial responsibilities. Along with the shock of paying all of your social security at tax time, there’s often the burden of paying your own (constantly rising) medical-insurance premium. Many of us have jobs with benefits, or spouses with same; our insurance premiums are subsidized and so we are to some extent insulated against the system’s atrocities. But many self-employed members must figure out how to get insurance without subsidy.

“I don’t know why one insurer charges $150 and another over $300 for what seems like pretty similar coverage,” David Lindley writes. “Now that I’m well and truly middle-aged, availability and preexisting conditions loom larger.” He adds, “Rising costs are the immediate worry, but in the longer term my bigger fear is not being able to get coverage at all . . . Shop around and hope you don’t get seriously ill is the only strategy I have been able to come up with.”

NASW has, for the past few years, provided access to medical insurance via a consortium of writers’ groups headed by the National Writers Union. Last summer that insurance came unglued. The insurance companies involved stopped offering coverage in every state except New York. (NWU scrambled for the Scotch tape and was able to close the gap. Coverage in those states is now provided through Unicare; New York’s provider is still Aetna.)

Scary, very scary. Mary Beth Menaker, who heads NWU’s insurance committee, told me, “What happened last summer can happen at any time.”

After some talk on the nasw-board listserv about how members were finding it difficult to get insurance, I said I would explore our options. Robin Henig kindly volunteered to help.

We began by soliciting assistance and advice through the nasw-announce listserv. I was stunned by the responses-dozens of them, full of sensible suggestions and counsel. Many who wrote went into detail about their medical insurance experiences. I’ll describe some stories that illustrate typical problems people encountered and how they solved them.

The Quagmire

Not only is medical insurance a mess, it is an arcane, jargon-ridden, moving target of a mess. Even after reading a lot, and communicating with dozens of people, I have only the barest understanding of how the medical insurance system works-when it does work.

Each state has its own intricate rules governing insurance, and many insurance companies do business in some states but not others. A matchless resource for coping with this Babel is an online set of consumer guides for getting and keeping health insurance in each state. The 51 guides, which outline each state’s (and D.C.’s) policies, are written and maintained by the Georgetown University Institute for Health Care Research and Policy (healthinsuranceinfo.net).

Assuming you don’t want to get a job with benefits or marry someone who does, what’s required to buy health insurance? A lot of research-and accepting as inevitable that it’s not going to be the medical insurance of your dreams. Any insurance policy probably will limit your choice of medical care by requiring you to join an HMO or, at best, let you pick from a restricted list of Preferred Provider Organizations. Some conditions are likely to be excluded, notably pregnancy. It may not include prescriptions, and forget about dental coverage.

It will certainly cost more than you hoped, and the premiums will almost certainly go up every year. Price increases tend to be gradual until you reach your mid-40s, but after that premiums start jumping by a factor of 3 to 6, according to Karen Pollitz, project director at the Georgetown Health Care Institute.

"Real insurance is expensive. The only way to make it cheaper is to subsidize it,” she told me. To reduce costs, you may have to settle for a high deductible and limited services.

What Should You Do?

Here, thanks in large part to other members of NASW who provided leads, is a sampling of options for getting health insurance. Their advice strikes me as mostly sound, but it cannot be comprehensive. Approach it clear-eyed. Pollitz warns that there are scams out there.

1. Live in one of only a dozen states that permit a self-employed person to buy insurance like a small group.

Usually the group can be as small as one person, you. According to Pollitz, the states are Arizona, Colorado, Connecticut, Florida, Maine, Maryland (but only at certain times of year), Massachusetts, New Hampshire, New Mexico (but only people with families), North Carolina, Vermont, and Washington.

If you live in one of the fortunate dozen, find out more through your state insurance department. Pollitz says you may be required to provide documentation that you really are a business. Schedule C should be adequate.

To find your state insurance department, see www.naic.org/1regulator/usamap.htm. This will take you to a U.S. map; click on your state and you’ll be taken to the Web site of its insurance department. This handy map is maintained by the National Association of Insurance Commissioners. You’ll also find a list of NAIC consumer publications.

2. You can get something approximating group rates by buying insurance through a membership organization.

You belong to NASW already, so you might as well start by investigating policies available to NASW members through the NWU writers’ consortium. Contact Beth Tani, Customer Service Solutions, Inc., 25600 Kelly Road, Roseville, MI 48066, 810-498-7000 (toll free 800-258-3669), writers@cssadmin.com. The Voice of Experience warns: do not expect an instant response.

Or you can join some other organization for the insurance plans it makes available-for example, your local Chamber of Commerce or one of a number of other small business associations. Many of these are state-based. You can search using Google for these, but before you sign up with one, check out its history.

A couple of members recommended the Northeast Business Trust, a regional group. Tom Fagan investigated and found it offered a variety of packages from HMOs such as Harvard Pilgrim and Tufts. Contact Sheila Riddell, 800-442-0120, x20.

Fagan ended up, however, with the nationwide Alliance for Affordable Services (www.affordableservices.org). He said the monthly premium is $360 for two people, but doctor’s visits aren’t covered and there’s a $5,000 deductible for hospitalization. “If you don’t get sick often and have the savings then this may be worth it,” he writes. Pick a lower deductible and the premium goes up.

David Lindley recounted his experience with the National Organization for the Self-Employed (nase.org). This group offers lots of flexibility in plan selection and nationwide portability. Lindley reports being reasonably pleased at first, when his premium was $130 per month. But by the time he dropped the insurance two years ago, it had risen to $330. That may be more than you want to pay, but from what I’ve experienced personally and heard from others, it is not wildly out of line.

3. You may be able to buy health insurance as an individual.

Search for plans at www.ehealthinsurance.com, which helps you find policies and compare them. The site also promises instant quotes, chat, and advice from insurance professionals.

Pollitz warns that the application process for individual insurance is long and detailed. You will be required to sign over access to all your medical records, and acceptance is highly unpredictable. Companies can and frequently do say no to applicants with a past history of medical problems even if their current health is good, and sometimes even for trivial problems like hay fever.
Lindley has been living in Virginia since last summer. Through www.ehealthinsurance.com, he found a Blue Cross policy that charges a bargain $146 per month. It will not cover his pre-existing sports-related arthritis for some months at least. He also fears a sharp premium rise, but as of December none had been announced.

Lindley’s experience is the most heartwarming of the bunch. But it is by no means typical. Larry O’Hanlon, who lives in California, describes a different Blue experience: “We applied for Blue Shield first through www.ehealthinsurance.com and it was a mess. They kept losing the application and delaying the process to the point that we just gave upÉ I probably risked more health from the stress of it than any health insurance was likely to protect.” Exasperated, he gave up on Blue Shield and found a PPO plan from Blue Cross of California. O’Hanlon offers this advice if both you and your spouse need insurance: apply under the name of the younger spouse because that’s the age rates are based on. “In our case that saves us more than $100 per month,” he says.

To reduce your monthly cost, consider doing what Joe Alper did-buy coverage with a very high deductible, and cross your fingers. Alper, who lives in Colorado, reported on his experience with an outfit known as Fortis Health (www.etdbw.com/fh/fortishealth/index.jsp). Fortis has carved out a niche for high deductible/medical savings account plans for the self-employed, he said. For his family (wife and daughter), Alper decided to go with a high-deductible plan. “We decided we could take the $4,800 hit in a very unusual year in exchange for an affordable premium (about $300/month).”

And then there are the mysterious vanishings. In October, Patrick Huyghe passed along details of his not-too-awful experience with one insurance company. When I checked back with him while writing this column in December, he reported an increasingly common phenomenon: In the interval, the company had simply stopped accepting new customers.

What Should NASW Do?

Several of the people who responded to my cry for advice suggested that we find a helpful insurance broker and try on our own to contract with an insurance company. Everything I’ve learned suggests that this avenue won’t be fruitful. “Insurance companies are getting out of the business of insuring associations-all associations,” NWU’s Menaker told me. People buy association insurance, she said, because they can’t get it anywhere else, and these are the people most likely to run up medical bills that the insurance companies will have to pay.

NASW has an additional problem that NWU doesn’t have: only a portion of our members are full-time freelancers. Member Sabin Russell pointed out, “The one thing insurance plans genuinely fear is a group where an individual can opt in or opt out. That way only the sicker people drift into the plan, driving up rates. So that is an inherent problem with a group like NASW.”

At the moment, I see no reason to drop our current arrangement-and hope that last summer’s history does not repeat itself. But I also see no reason not to consider other possibilities.

That means NASW needs a formal way of keeping an eye out. So I’m recommending that we establish a permanent insurance committee to keep exploring our constantly changing options and suggest changes to the NASW Board. I think its first and highest priority ought to be medical insurance, but its responsibilities could extend to other types of insurance eventually. (For example, a number of the people who wrote to me suggested that we needed to look into liability insurance.)

Assuming such a committee comes into being, its first order of business probably should be to discuss whether it makes sense for NASW to hire a consultant to advise us on our insurance options, someone who-unlike me and Henig-actually knows the field.

Clarification

Last issue, in describing Laura Van Dam’s February NASW workshop session on book writing, I paraphrased something she said thus: “Think of the [potential audience] as a bright relative who is not very interested in science-an NPR kind of person.” Van Dam has pointed out to me that this could be taken to imply she thinks NPR people aren’t interested in science. She doesn’t think that, of course, and neither do I. Sloppy writing, apologies to any reader who was misled.

#

Tammy Powledge, tam@nasw.org, was recently re-elected to the NASW Board.