Although employer-sponsored and public health insurance plans are more common, individual health insurance helps protect the health of the families of millions of self-employed people. If you are one of the self-employed looking for healthcare coverage, the cost of this type of plan will be a primary concern for you.

At eHealth, we help self-employed individuals get the health insurance they need at a price they can afford. Our agents are licensed in every state to help people find individual, family, and alternative options in healthcare coverage.

How much is individual health insurance for self-employed people?

Your own individual health insurance premiums will depend upon several factors, such as the number of people that require coverage under your plan. Will the insurance be for you alone, you and your spouse, or your entire family, including your children? Premiums generally increase the more dependents you add to your plan.

Insurers also consider age, tobacco use, your ZIP code, and the type of individual health insurance you choose. Whatever kind of plan you decide upon, eHealth has options for you. With eHealth, you can easily compare individual and family health insurance quotes to find a plan that fits your needs and budget.

Options for Self-Employed Health Insurance

Self-employed individuals have various options when it comes to health insurance coverage. The choice of insurance can significantly impact both their healthcare and financial well-being. Each option comes with different costs, benefits, and considerations. It’s important for self-employed individuals to carefully evaluate these options to find the best fit for their unique circumstances and needs. Let’s explore the available choices and their associated costs to help you make an informed decision.

Health Insurance Marketplaces

Health Insurance Marketplaces, also known as Health Insurance Exchanges, were established under the Affordable Care Act (Obamacare) to provide a platform for individuals and families to compare and purchase health insurance plans. These marketplaces offer a range of coverage options from various insurance companies, allowing self-employed individuals to find a plan that suits their healthcare needs. The costs associated with plans available on the Health Insurance Marketplaces can vary depending on factors such as location, coverage level, and individual preferences.

Private company health insurance

Private company health insurance refers to health insurance plans that are provided by private insurance companies to individuals and families. These plans offer a variety of coverage options and benefits, allowing self-employed individuals to select a plan that meets their healthcare needs. The cost of private company health insurance can vary based on factors such as the coverage level, the type of plan, and the individual’s age and location.

High-Deductible Health Plans (HDHPs)

High-Deductible Health Plans (HDHPs) are health insurance plans that require individuals to pay a higher deductible amount before the insurance coverage kicks in for most services. These plans often come with lower monthly premiums, making them an attractive option for those looking to manage their healthcare costs. However, individuals with HDHPs may need to cover more out-of-pocket expenses for medical services until they reach the deductible.

Catastrophic Health Insurance

Catastrophic Health Insurance is a type of health insurance designed to provide coverage for major medical expenses in case of a serious illness or injury. This type of plan typically comes with lower monthly premiums but has a high deductible, meaning you’ll have to pay a significant amount out of pocket before the insurance coverage takes effect. Catastrophic plans are generally intended for young, healthy individuals who want to protect themselves against unforeseen medical emergencies without paying high monthly premiums.

Small Business Health Options Program (SHOP)

The Small Business Health Options Program (SHOP) is a platform that allows small business owners to provide health insurance options for their employees. It’s a part of the Health Insurance Marketplace and is designed to make it easier for small businesses to offer group health insurance coverage. SHOP offers a range of health insurance plans from various providers, giving employers and employees more choices. The cost of SHOP plans can vary based on factors such as the number of employees, the coverage options selected, and the location of the business.

Spouse’s Employer Plan

A spouse’s employer plan refers to the health insurance coverage offered by the employer of an individual’s spouse. It allows a person to be covered under their spouse’s health insurance policy, providing access to medical benefits and coverage. The cost of being covered under a spouse’s employer plan can vary based on the specific plan, the employer’s contributions, and the coverage options selected. It’s important to review the plan details, benefits, and costs to determine if this option is suitable for your healthcare needs.

COBRA

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows individuals who have lost their job or experienced other qualifying events to continue their employer-sponsored health insurance coverage for a limited period of time. This coverage comes at a cost, as individuals are required to pay the full premium, including the portion that was previously covered by their employer. COBRA provides a temporary solution for maintaining health insurance coverage during times of transition, but it’s important to carefully evaluate the costs and benefits to determine if it’s the right option for your situation.

Medicaid

Medicaid is a government-sponsored health insurance program that provides coverage for eligible low-income individuals and families. It offers a range of healthcare services, including doctor visits, hospital stays, prescription medications, preventive care, and more. The cost of Medicaid varies based on factors such as income, family size, and the specific Medicaid program in your state. Eligible individuals may have little to no out-of-pocket costs, while others may have minimal copayments or premiums.

Short-Term Health Insurance

Short-Term Health Insurance provides temporary coverage for individuals and families who need health insurance for a limited duration. It is designed to bridge gaps in coverage during life transitions, such as between jobs or waiting for other coverage to start. Short-term plans typically offer a range of medical services, but they may not include all the benefits of comprehensive plans like those available through the Affordable Care Act. The cost of short-term health insurance varies based on factors such as your age, location, coverage duration, and the plan you choose.

Cost Factors for Self-Employed Health Insurance

Age and health status

Age and health status are two significant factors that can greatly influence the cost of health insurance. Insurance companies often consider these factors when determining the premiums you’ll pay for your coverage.

Age: Generally, as you get older, the cost of health insurance tends to increase. This is because older individuals typically have a higher likelihood of needing medical care, which can lead to higher claims costs for the insurance company.

Health Status: Your current health condition and medical history also play a crucial role in determining the cost of your health insurance. Insurance companies assess the potential risk associated with insuring individuals with pre-existing conditions or ongoing medical needs. If you have a history of chronic illnesses or require frequent medical attention, your premiums may be higher to reflect the increased risk of the insurer covering your medical expenses.

Individual vs. Family Coverage

The more people your health insurance plan covers, the higher your premiums tend to be. Although it may be impractical to have each family member under a separate plan, you may want to consider what other insurance options are available if you have a family. There are some basic facts to know when you are comparing Obamacare individual health insurance plans:

• When you apply for Obamacare individual health insurance, you can also find out of one or more family members are entitled to a government program like Medicaid or CHIP.
• Some families choose different individual health insurance options for various family members, depending upon medical needs and budgets. For example, children may qualify for CHIP or low premiums with Obamacare health insurance.
• When children or other dependents qualify for other types of health plans, healthy adults in the family might decide to fill in coverage gaps with such alternatives as short-term health insurance or medical insurance packages.

Location and industry

The cost of health insurance can vary based on where you live and the industry you work in. Healthcare costs can differ significantly from one region to another due to factors such as the cost of living and the availability of medical services. Additionally, some industries may have higher health risks or more demanding physical tasks, which could affect insurance premiums.

Coverage level and options

The extent of coverage and the options you select in your health insurance plan will influence the cost. Plans with more comprehensive coverage, including a wider range of medical services and treatments, often come with higher premiums. Conversely, plans with higher deductibles, copayments, and coinsurance tend to have lower premiums but may require you to cover more of the initial costs when seeking care.

Premiums

A premium is the amount you pay to your insurance provider for coverage. It’s usually paid on a regular basis, such as monthly. Premiums are a key part of your health insurance cost and vary based on factors like your age, health condition, location, and the type of plan you choose. Premiums are essential for maintaining your insurance coverage and gaining access to the benefits outlined in your plan.

Premiums can also vary between an Obamacare or a non-Obamacare individual health plan. A recent study by eHealth found that for the first half of the 2021 Open Enrollment Period, these were the average national monthly costs for ACA-compliant plans:

• Average monthly premiums for individual coverage: $484
• Average monthly premiums for families: $1,230
• Average annual deductibles for individuals: $4,394
• Average annual deductibles for families: $7,800

Deductibles, copayments, and limits

When assessing the long-term cost impact of health insurance, it’s crucial to consider deductibles, copayments, and coverage limits. A deductible is the amount you must pay out of pocket before your insurance coverage kicks in. Higher deductibles can lower your monthly premiums but may lead to higher initial costs when you need medical care.

Copayments are fixed amounts you pay for each healthcare service, such as doctor visits or prescription medications. These can add up over time, so it’s essential to understand how often you’ll be using medical services and what copayments you’ll need to make. Additionally, certain plans have coverage limits, meaning there’s a maximum amount the insurance company will pay for covered services in a given year. Understanding these limits is crucial to ensure you’re financially prepared for potential out-of-pocket costs beyond the coverage limit.

Subsidies and Cost Savings for Self-Employed Health Insurance

As a self-employed individual, navigating the complexities of health insurance costs can be challenging. Fortunately, there are various subsidies and cost-saving options available that can help alleviate the financial burden of securing health coverage. Whether you’re exploring the Health Insurance Marketplace, private insurance options, or other avenues, understanding the potential subsidies and cost-saving strategies can make a significant difference in finding affordable and comprehensive health insurance tailored to your needs.

Obamacare Subsidies Can Lower Premiums

It’s important to note that individuals and families may qualify for Obamacare subsidies that can decrease the premium they must pay dramatically. People with modest incomes might also qualify for cost-sharing subsidies that will further reduce out-of-pocket health costs. Typically, your family income needs to fall within 100%-400% of the federal poverty level, and you must lack access to other major medical insurance, to qualify for a subsidy.

Affordable Care Act subsidies may lower self-employed health insurance cost

The American Rescue Plan Act (ARPA) enhancements to the ACA’s subsidy have allowed an unprecedented number of Americans to qualify for premium tax credits. Premium subsidies can be used to offset the premiums for any metal-level plan on the Marketplace. And the Inflation Reduction Act, signed into law in August 2022, extends the current subsidy enhancements through 2025. During the open enrollment period for 2023 coverage, the enhanced subsidies will still be available. For example, subsidies will still be available to some households with income above 400% of the poverty level, depending on the plan premium cost. 

Millions of people were eligible for $0 premium Bronze plans, according to a study published by the Kaiser Family Foundation. You can substantially reduce your self-employed health insurance cost if you qualify for ACA subsidies and purchase a Marketplace individual plan.

Additional cost-saving health insurance alternatives for self-employed people

While you won’t get all of the benefits and protections that you would with an ACA-compliant individual health insurance plan, you could consider some alternatives to Obamacare if you need to save money. Typically, people consider these individual health insurance alternatives as temporary solutions that can help fill in a gap in permanent individual health insurance coverage:

• Short-term health insurance for individuals and families: In most states, you can buy short-term health insurance for up to a 12-month term. You may have the option to renew this kind of coverage for up to three years. About half of the respondents to an eHealth survey said they probably wouldn’t have been unable to afford individual health insurance if they couldn’t buy short-term coverage.
• Medical packages: You can also combine such coverage as short-term health insurance, dental insurance, prescription discounts, and emergency indemnity policies to give you and your family a variety of health benefits.

These alternatives to individual health insurance can protect your pocketbook if you have an accident or unexpected health issues. Unlike Obamacare individual health insurance policies, these alternatives won’t cover some health issues like maternity, mental health, or routine care for pre-existing conditions. These policies can’t exactly replace an ACA-compliant major medical plan, but they can help self-employed people get important protection at a typically lower cost.

Frequently Asked Questions

How much does health insurance cost when you’re self-employed?

The cost of health insurance when you’re self-employed can vary widely depending on factors such as your age, location, desired coverage level, and any pre-existing conditions. Generally, self-employed individuals can expect to pay higher premiums compared to those with employer-sponsored coverage, as they’re responsible for the full cost of the plan. However, you may be eligible for subsidies or tax credits to help offset the cost of health insurance through the Health Insurance Marketplace.

Is health insurance a write off if you’re self-employed?

Yes, health insurance premiums are often tax-deductible for self-employed individuals. You can typically deduct the full cost of your health insurance premiums, including coverage for yourself, your spouse, and your dependents, as an adjustment to your gross income on your tax return. This deduction can help lower your taxable income and reduce your overall tax liability, making health insurance more affordable for self-employed individuals.

How do you find health insurance when you’re self-employed?

Finding health insurance when you’re self-employed involves exploring different options to find a plan that meets your needs and budget. You can start by researching plans available through the Health Insurance Marketplace, where you may qualify for subsidies or tax credits to lower the cost of coverage. Additionally, you can consider purchasing a plan directly from an insurance company or working with a licensed insurance broker who can help you compare plans and find the best coverage for your situation. It’s essential to consider factors such as premiums, deductibles, copayments, and coverage limits when selecting a health insurance plan as a self-employed individual.

How to compare individual health insurance for self-employed people

At eHealth, we’ve helped millions of Americans find individual health insurance that they can afford and truly benefit from. If you enter your ZIP code in the form and answer a few, short questions, we will help you find the perfect individual health insurance for you and your family too. In addition to different kinds of individual health insurance plans, we can also help you find group health insurance and dental plans for yourself and your growing business.

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