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Freelancers and the Affordable Care Act: Which Health Insurance Plan Should I Choose?

Freelancers and the Affordable Care ActBy Michael Cahill

Freelance Professionals know how to handle most jobs on their own. That’s what makes them unique. You’ll find these individuals across disciplines, and their impact can be seen in art, technology, science, and literature, to name a few.

The Affordable Care Act has been getting a lot of press lately, due to the fact that its major provisions will finally come into law on January 1, 2014.

Consumers will be able to shop for health plans as early as October of this year, and the prospect has many people wondering what to do next.

It may surprise you that the brilliant individuals I mentioned above are also widely underinsured, or worse, uninsured, due to the high cost of private individual health insurance.

Words like “choice” and “affordable” don’t often factor into the options for Freelancers, and their options have been limited for many years. That is, until now.

Structure of the New System

A basic overview of the Affordable Care Act Legislation is as follows:

In order to deal with the problem of the current healthcare system, the government decided to propose a new one, in which insurance plans are offered to consumers through state regulated online marketplaces.

Consumers will choose plans on a four-tiered scale, and pay according to a fixed percentage of their income, which is determined in relation to the Federal Poverty Line. The range is 138-400% above the Federal Poverty Line. Those who fall below 100% will likely be eligible for health insurance at no cost, through Medicaid.

The price for plans is determined according to individual income levels, on a sliding scale, so that lower income persons pay less for insurance, and higher income persons pay a fair rate that is comparable to their level of income.

Insurance companies are subject to regulations that have a positive impact on the consumer. Guaranteed issue and guaranteed renewal are two of these regulations, as is the rule that companies cannot deny coverage on the basis of pre-existing conditions.

So if you have an illness such as asthma or diabetes, you can’t be denied coverage. Insurance companies must also provide consumers with a long list of covered health services, which means a higher level of care for you and me.

According to the ACA’s definition, individuals are persons who do not receive insurance through an employer, as a dependant, or marriage. Individuals are required to obtain insurance by January 2014, if they do not already have it.

If you choose to forego insurance, you’ll have to pay a $95 fee that will more than double next year, and more than triple the following year. By 2016, the fee will be tied to the rate of inflation.

There are countless reasons why remaining uninsured is a bad idea, and the online marketplace offers further incentives to help you to make the right decision.

Employers are also mandated to offer insurance to their employees, if they employ more than 50 people. States will be required to set up marketplaces for both employers and individuals, by the first implementation date of October 2013.

Benefits of Shopping in the Marketplace

By requiring insurance companies to cover certain health services, the ACA is ensuring that all Americans get access to a base level of care, without having to pay more money or jump through any hoops.

The list of services includes: Maternity and Newborn Care, Lab Services, Rehabilitation Services, Prescriptions, Emergency and Ambulatory Services, Mental Health, Services Related to Chronic Illness, Testing, Oral and Vision Care, Pediatric Care, and Wellness.

For many Americans, this list contains necessary services that they couldn’t otherwise afford.

More Benefits: Medicaid

Medicaid provides healthcare to millions of Americans already, but the ACA created an optional expansion plan for states that increases eligibility across the board.

Individuals with incomes below 100% of the FPL are generally eligible to apply for the program in its current form.

The expansion raises the income level to 138% above the FPL, and makes single childless adults eligible for care, for the first time in our history.

Subsidies

The Affordable Care Act seems to have the best interests of the people in mind. But many of us are still concerned about meeting the cost of a plan by the January 2014 deadline.

Tax subsidies will be available to help reduce your cost, provided that you are under the age of 65, and your income falls between 138 and 400% of the FPL.

If you’re in this group, you could stand to save a lot. Plus, you may save yourself a great deal of stress in the process.

Freelance With Good Healthcare

The gloomy days of the old healthcare system are beginning to show signs of clearing. And provided everything goes according to plan, Freelancers will have good insurance that they can afford, with the security of knowing that their interests are protected.

Michael Cahill is the Editor of the Vista Health Solutions Blog. He writes about the health care system, health insurance industry and the Affordable Care Act. For more information about the ACA may affect freelancers and other options for health insurance, visit the Vista Health Solutions self employed health insurance guide. Follow him on Twitter at @VistaHealth.

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