Looming over the otherwise idyllic life of the freelance writer is the dark cloud known as health insurance, for which the only silver lining seems to be the silver lining the pockets of the insurance companies. In this report, David Lindley provides a snapshot of how NASW freelances are getting their insurance (or not), and provides some recommendations, both for the individual freelance and for NASW as a whole.
In 2002, Tammy Powledge and Robin Henig surveyed the dreary landscape of health insurance for the freelance, and came up with mostly disheartening news. In the spring of 2003 they asked me if I would work with a committee to investigate further and see if we couldn't find some helpful ideas. I'm sorry to report that there is little hopeful news to be found. Since this country, alone in the civilized world, has decided to do without any sort of national health care policy, independent writers, like self-employed individuals generally, must fend for themselves. NASW's role is likely to remain one of information provider, and to that end I hope the following report will be of some use.
At the time we started, NASW had no good information on the extent of the problem — that is, how many of us pay for our own health insurance and how much we pay, how many have had trouble getting insurance, how many go without, and so on. I sent out an questionnaire in April 2003 and received a gratifying 256 responses, which seems like a pretty fair representation of the freelance section of NASW's membership. Some who are not freelancers told me that the need for health insurance was the biggest reason they remained in that soul-deadening state known as employment. I can't quantify the extent to which insurance fears prevent people from going freelance who would otherwise like to do so, but it's clearly a factor.
Survey Results
Let me begin by summarizing the results.
Of the 256 responders, 10 had insurance through a part-time job and 87 were insured via a working spouse. A few people in that latter group complained that they still have to pay a significant monthly fee to join their spouse's plan, but these people are still paying less than they would if they were on their own, and in any case they can't be turned down. Three people responded, a little too smugly if you ask me, that they live in Canada, and one person claimed to survive by getting a job every so often, then quitting and going on COBRA for 18 months.
That left 155 of us rowing our own boats. Of that number 17 had no insurance at the time of responding. But only one person reported being unable to obtain insurance because of pre-existing conditions. The other 16 were young and either foolish or admirably free-spirited. A number of these people said that of course they needed to find health insurance, but they just hadn't quite got around to it yet. So that left 138, of whom 4 relied on Medicare (often with supplemental insurance). Another 20 didn't say how much they were paying.
More than half the respondents pay their own way. Six percent have no insurance
For the remaining 114 people we have some facts and figures. Of this group 80 were paying for themselves only, while 34 were paying for a family. Keep in mind that the respondents were of all ages, and were scattered across the country, in urban, suburban and (a few) rural settings. In addition, coverage plans varied enormously in deductibles and copayments, ease of access to specialists and hospitals, inclusion of prescriptions or not, and so on. Not much scope here for a multivariate statistical analysis, so all I did was group responders into broad bands according to monthly premium.
What We Pay
The 34 family-payers formed a diverse group: couples only, couples with children, single parents with children. Four respondents paid less than $200 per month, 12 paid from $200 to $600, and 18 paid more than $600, the highest being $1200. At the lower end we are talking catastrophic insurance of one kind or another, with high copayments and deductibles, and with the insurance only kicking in usefully, often, when you've run up thousands of dollars in medical bills.
The 80 single payers I divided up a little more finely:
- 7 paid < $100/month
- 16 $100-$200
- 14 $200-$300
- 21 $300-$400
- 13 $400-$500
- 7 $500-$750
- 2 > $750 (highest was $1,000)
Again, the lower rates are for high-deductible plans. Exactly half the respondents, 40/80, were paying between $250 and $450 per month, which seems to the going rate for insurance with modest copayments and small or no deductibles. I don't know what the people at the high end of the scale are getting. A better selection of magazines at the doctor's office, maybe.
Half the singles pay between $250 and $450 per month
Where We Get Insurance
Where are people finding insurance? Anywhere and everywhere, seems to be the answer. In larger cities and urban areas, you can usually find such outfits as Blue Cross/Blue Shield, Kaiser Permanente, and so on, and many people obtained their coverage by going directly to the insurer. Many other responders said they had gone to an insurance broker, often the same person who finds home and car insurance. This seems to be more common in less populous areas, where there are fewer options. Local organizations and associations may offer insurance to members. In the DC area, for example, there is Washington Independent Writers. The National Writers Union now provides coverage only to those living in New York State. Some communities have associations for creative people generally — artists, musicians, actors, and suchlike ne'er-do-wells — which freelance writers may well be able to join.
The only organization I am aware of that provides national coverage is the National Association for the Self-Employed, which, according to its website, provides coverage to hundreds of thousands of individuals and small-business owners across the country. Some responders who use NASE had complaints of an unspecific nature, but when I had NASE insurance some years ago the service was adequate if not outstanding. For a few people NASE seems to be the only realistic option. [editor's note: We have NASE insurance. Fingers crossed, knocking on wood, and without a major claim yet, it seems like a reasonable balance between cost and coverage.]
There are some websites that act (or claim to act) as nationwide brokers. I used www.ehealthinsurance.com to get quotes from a number of insurers in northern Virginia, but one respondent said that in his remote corner of New England the site could find no providers at all. I also found the following two websites but can give no advice on their value: www.selfemployedcountry.org and www.1sthealthinsurancequotes.com. Feedback welcome.
There's also a useful site at www.healthinsuranceinfo.net that provides state-by-state information on health care rules and regulations.
Tax Deductions
The self-employed can now fully deduct their health insurance premiums; this corrects an irksome anomaly where premiums had been only partially deductible. Additional out-of-pocket expenses may be deductible, when they exceed some fraction of your adjusted gross income and provided also that you itemize. One or two survey responders reported using Medical Savings Accounts (MSAs). These are financial devices to which one may be able to contribute tax-sheltered funds which are then used to pay out-of-pocket health expenses, including deductibles and items such as dental or optical care not covered by many plans. To set up an MSA a person must belong to a qualifying (typically a high-deductible) insurance plan. This looks like a good thing, since one can then combine lower monthly premiums with a personal fund that's also tax deductible, and which rolls over from one year to the next if you don't use it. However, MSAs are in an uncertain state right now. According to IRS publication 969 (downloadable at www.irs.gov), the current MSA regulations are set to expire at the end of 2003. The recent monster Medicare bill, as I understand it, includes a general provision for setting up MSAs (this would apply to everyone, not just seniors). Regrettably I have not yet found the time to read all 1100 pages of small print so I cannot say just what the new MSAs will be like. I will post information here when I know more.
As they say in the newspaper columns, consult your tax adviser for details.
NASW's Limited Role
What can NASW do? We have at most a couple of hundred members across the country who pay for their own health coverage. This is not a pool that any insurer will be interested in. As Tammy and Robin found earlier, small self-selected groups get no respect, the principal reason being that they tend to become last resorts for people who can't find insurance independently. Even if NASW were to provide coverage somehow, we would get few takers unless that coverage was a bargain compared to the rates members have found on their own. As I mentioned above, the National Writers Union, which once upon a time offered coverage in a handful of regions, now covers only New York. In the present climate there is really no chance that NASW can directly find a way to offer insurance to the small number of freelancers who might take it up. One suggestion that came up was that NASW might find someone to act as a consultant or adviser to members looking for health coverage. But it's hard to see what such a person could offer, given that health care is regulated by states and varies so much across the country, and given too that individual circumstances vary so much from one freelancer to another. The survey indicates that many members went to local insurance brokers who know the business in their region, and this seems like the best bet for getting advice if you run into difficulty.
What NASW can do is provide information. I'd like to create on the freelance corner of our website a resource that members can turn to for general advice and for specific help. The websites above may be useful starting points if you're looking for insurance, and I'd like to add to this list any additional websites (or even old-fashioned phone numbers) that other members have found useful. Please send any such suggestions to me at dlindley@nasw.org and I will endeavor to maintain an orderly list.
Can NASW influence health care policy? We are writers and we do have easier access to newspapers and magazines than many other interested parties. The good news, it seems to me, is that health care is back on the political radar screen again, because it is an increasing worry to an increasing number of people. I think the impetus for change is likely to come from business owners and from the growing ranks of middle-class wage earners who are being asked to pay more for their coverage or who are being dropped altogether. Those of us who are self-employed may therefore find our voices joining a growing chorus with overlapping if not identical interests. Recently I heard a discussion on the Lehrer Newshour in which someone from a national association of chambers of commerce, representing small business owners, argued that it was time for a national policy aimed at providing universal coverage. I believe Bill Ford of the well-known automotive concern has said essentially the same thing. Of course business owners are mainly concerned to reduce or eliminate the steeply rising insurance costs for their employees, but if the solution is to make sure everyone can get insurance regardless of employment circumstances, then we are on the same side.
It's a matter for the Board whether to embrace some particular strategy, and I would encourage members to make their opinions known. I don't know how much effect petitions and policy statements and the like really make, but it's obvious that saying nothing achieves nothing. I plan to write to my congressman (as a new American, I have faith in the system). Freelancers who regularly contribute to newspapers might think about offering an op-ed piece. Writers of the world unite! You have nothing to lose but your copayments!
Just For Policy Wonks
For those who wish to dig into policy questions, I have found a few interesting websites. The Congressional Budget Office recently issued a detailed analysis of the number of people lacking health insurance either for a whole year or part of a year (go to publications, look under health, and scroll to May 2003).
Also this year, the Institute of Medicine published a book-length report arguing that the overall societal costs incurred by lack of insurance (e.g. lost productivity due to illness and premature death, cost of providing emergency help) exceed what would be the cost of insuring those who currently lack insurance.
A number of organizations exist that are lobbying for change. Usually they espouse some preferred solution. Many are focused particularly on the uninsured poor, but their ideas may work for the tenuously insured and moderately affluent, i.e. freelance writers. Without any comment or recommendation, here are some places to visit:
- National Academy for Social Insurance
- Physicians for a National Health Program
- The Henry J. Kaiser Family Foundation
No doubt there are more. Please pass on to me any interesting places you come across.
David Lindley is now freelancing from Alexandria, Virginia. His biography of Lord Kelvin will be published early in 2004. When universal health care is finally achieved in the United States, he plans to become a hypochondriac.
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