Recently, I read an article in this post, “The Middle Class Struggles With Health Insurance”. Health insurance costs are certainly an issue for everyone today, especially the self-employed and those who work for small businesses. Many companies are trying to cut costs, and these cost-cutting measures can eliminate employee health coverage, forcing employees to find coverage on their own. As a result, many employed individuals and families now face the same challenge that small business owners have faced for years: finding affordable insurance.
The country’s uninsured population of around 45 million has grown significantly in recent years. According to Todd Stottlemyer, president of the National Federation of Independent Business in a recent testimony to Congress, nearly 63% of uninsured people are small business owners or employees of small businesses.
Many uninsured do not know of an alternative to expensive individual health policies. Individual policies, unlike group health insurance, have premiums based on the risk factors of the particular individuals covered by the policy, which means that the risks are not shared by a large group, which makes the policies a great deal. more expensive than group insurance. Without knowing the alternatives to individual policies, many will simply choose to forgo health insurance when faced with the enormous costs of individual health coverage.
Individual policies are not only expensive, but they limit the ability of the insured to design a plan that meets their needs. Individual health policies are generally “off the shelf” policies that have defined coverage.
Additionally, many who leave corporate positions and go into business are shocked at the true cost of health insurance. In their old job, their employer paid part of their premium. What they paid was not the premium for their insurance, but a percentage of the premium. When faced with the reality of having to pay the full premium themselves, many refuse, leaving themselves and their families uninsured.
The costs of health insurance are undoubtedly increasing. The cost of health care continues to rise, from the cost of doctor visits, hospital costs, pharmaceutical costs, emergency care and all other aspects of health care.
Yet perceptions about health care and insurance have not changed. People want the freedom to be self-employed or work for a small business, but they want the same benefits and costs that they’re used to when working for a large business.
The self-employed and those working for small businesses need to rethink their conception of health insurance. Health insurance, like auto insurance and home insurance, is designed to guard against catastrophic losses, not for every sniff. Rather than seeing health insurance as a free card for the doctor, health insurance should be viewed as disaster protection.
Home insurance does not protect against the loss of one or two shingles. It protects against catastrophic damage to the roof. Auto insurance does not protect against knocks, small bumps and punctures, it protects against large losses due to accident, fire, theft or other damage. Health insurance should not be viewed any differently for the self-employed. It’s protection against major loss, not minor bumps and bumps.
In addition to a change in perception of health insurance, uninsured people, whether self-employed or working for a company that does not offer a group policy, have alternatives to the expensive individual policy. Joining a group to purchase health insurance through trade or industry associations cannot only reduce the cost of the health insurance policy; often the individual is free to design a plan that works for him and his family. In addition, association policies are generally available for self-employed and employees and families.
Hairdresser Calynn Colceri had an individual plan through a well-known national company. She had purchased her individual package “off the shelf” solely on the basis of price. She was not satisfied with the coverage, which did not meet her needs, and she was sorry that the company was increasing its premiums regularly. By showing her a group plan through an association, I have helped her design a plan that specifically meets her needs, extends coverage in many areas, and costs less than her individual policy. Not only have her premiums decreased and her coverage improved, but she has also gained a number of additional business benefits that directly affect her business through her association membership.
If designed correctly, the self-employed can also claim tax credits for their deductibles, dental, vision and other medical expenses, up to 100% of costs, further reducing the actual costs of insurance. disease. To determine the extent, if any, of the tax savings to which one would be entitled, a tax expert should be consulted.
Although this is a serious problem, health insurance can be a manageable expense for most Americans. Granted, this may require a new mindset regarding the use of insurance, but if it is approached rationally and by looking for group alternatives to individual health policy, health insurance has not. need to be the financial freak that she is perceived to be.