Today we’re talking health insurance for freelancers. More specifically, we’re exploring two unconventional options to traditional health insurance.
This is an extremely hot topic given our current political environment. But I don’t want to give you the same information everyone else is publishing.
“Where can I get affordable health insurance?” is the wrong question to ask right now. The better question is, “What are my options?”
For many of us, getting the same coverage from a different source (and for the same price) isn’t a real solution. If your premiums are no longer sustainable—or if you have pre-existing conditions that you’re concerned about—you should look beyond the usual offerings.
In this episode, I’m focusing on two options most people don’t even know exist: health indemnity plans and medical cost sharing.
The controversial and sensitive nature of this topic requires that I clarify a few key points before we get started:
- If you’re outside the U.S., there’s no need to listen to this episode.
- I’m not a financial advisor or insurance professional. You need to do your own due diligence and investigate these and other options on your own while consulting with your financial advisor before making any final decisions.
- These options are NOT for everyone. I realize that. But the sad fact is that there’s no perfect solution out there. Our healthcare system in this country is broken. We can (and need to!) do better as a country.
- It’s not just the politicians’ fault. We all need to take ownership in this area. Many people have no choice in the matter. But many of us can do simple things to improve our health and become smarter consumers of healthcare.
- Don’t send me hate mail because you don’t like these options … or because you disagree with one (or both) of them. Again, I’m simply trying to share good information. And please don’t send me emails or private messages asking me questions about these and other alternatives. Again, I’m not a financial or insurance professional.
- I do NOT profit in any way by informing you of these options. I’m not affiliated with any of these companies or have any kind of personal or financial interest in any of them.
- Again (I can’t say this enough), I’m not a financial advisor or insurance professional. Do your own homework and consult with your financial professional.
- Download the resource guide on this page for additional links and resources, including a list of medical cost sharing organizations, comparison charts and detailed articles on these unconventional options.
The notes that follow are a very basic, unedited summary of the show. There’s a lot more detail in the audio version. You can listen to the show using the audio player below. Or you can subscribe in iTunes to get this show delivered straight to the Podcasts app on your smart phone, tablet or iPod.
My first guest is Mark Dunn, president of America’s Benefit LLC. I met Mark recently through my accountant, who suggested I take a look at Mark’s health indemnity offerings.
Health Indemnity Plans
A conversation with Mark Dunn from America’s Benefit LLC.
Tell us about yourself
Mark is president of America’s Benefit LLC. He works mostly with New Era Life to build healthcare programs for his clients.
Dr. Bill Chen bought New Era Life in 1999 and built it into a billion dollar insurance company that provides an alternative to major medical insurance.
Why are healthcare premiums so out of control?
Premiums are skyrocketing, so more and more people can’t afford to pay. As a result, healthy people are going without coverage or signing up for other programs. At the same time, people with major illnesses have no choice but to stay in. All this increases costs.
What are the biggest differences between your product and major medical insurance?
Major medical insurance has to abide by all Affordable Care Act rules. At New Era Life, they pay on an indemnity basis, offering plans (approximately) at 1X or 2X or 3X Medicare.
With indemnity coverage, you have a “menu” of services, and the amount the company will cover. If the cost of your knee surgery (for example) is less, you keep the difference. If the cost of your knee surgery is more, you have to pay the difference.
Premiums are about 50% lower than the Affordable Care Act. Of course, you can get additional coverage (with higher premiums) if you want. There is no deductible.
Are these policies compliant with the Affordable Care Act?
You can make them compliant by adding minimal essential coverage. It’s up to the customer. But even with extra services, your premiums will still be less.
What about pre-existing conditions? Which ones would disqualify you?
The base program doesn’t cover some pre-existing conditions, but you can add options to get you through the initial 12-month period.
There are some creative options they can use to get you what you need.
What about prescription drugs? How are those handled?
Prescription drug coverage can be full or partial reimbursement. It depends on what you want.
As a self-employed individual, can you deduct the premiums for this type of policy?
Yes. Health insurance premiums are deductible. Some premiums aren’t considered “insurance,” so those aren’t deductible. But most are considered insurance.
What’s your track record in terms of premium increases?
Prices have been relatively stable, especially in contrast to Affordable Care Act premiums.
Can I set aside before-tax funds to cover medical expenses, like I would with a Health Savings Account or Flex Account?
Right now, you wouldn’t be able to do this because you need a high deductible program to qualify.
In situations where my share of the cost would be significant—say, $15,000—what can I do to help offset that cost?
You can blend this program with a Christian medical cost sharing program. It will give you an extra bucket of money to cover these kinds of things for a low monthly amount.
Where can people learn about you?
Medical Cost-Sharing Organizations
A conversation with Dale Bellis, executive director of Liberty HealthShare:
Tell us about yourself
Dale Bellis is the executive director of Liberty HealthShare. Liberty HealthShare is a nationwide nonprofit organization that, on the basis of shared values and beliefs, rallies around the common cause of paying each other’s medical bills.
The program is based on principles of mutual aid and assistance. It has a different methodology and mindset than insurance.
Each month, members set aside a “share amount” every month into a secure account. The share amount is currently $199 for a single person, $299 for a couple, and $449 for a family of three or more.
Then, each month, your share amount is matched to another member who has expenses that month. You can see your dollars flow from your account to the other member’s account.
What’s the process for visiting a doctor or paying for knee surgery?
In both cases, members present their ID card to the doctor or hospital. The card has information on where to send the bill. Once the bill is received, Liberty HealthShare processes it in accordance with their sharing guidelines.
They consult a national database to determine what’s a fair and reasonable reimbursement.
About 97% of providers will accept Liberty HealthShare ID cards. The others will typically have questions, which they’ll handle case by case.
Are there deductibles? Or premiums?
Medical cost sharing isn’t insurance, therefore the terminology is different. They don’t use contracts of indemnity. Members contribute a monthly “share amount.”
How are membership contributions kept so low—and how much do they typically go up year to year?
The suggested share amount has not changed over the past three years. Contributions are kept low for three main reasons:
- It’s a self-pay program. This changes consumer mentality. Members are more conscious of the costs. They’re more likely to shop around and decline unnecessary tests.
- Members are health-conscious. We regard our bodies are temples, and we work to prevent disease.
- Huge discounts are available in the marketplace if you know where to look.
What about pre-existing conditions?
Medical cost sharing is premised on future expenses. In your first year, the program does not share for pre-existing conditions.
However, they do welcome people with chronic conditions. These people are assigned a health coach to help them make lifestyle choices to improve their conditions. This would include pre-existing conditions such as high blood pressure, heart disease and type 2 diabetes. Members pay an additional $80 per month until they can resolve those conditions by lifestyle changes.
What about medical conditions that aren’t related to lifestyle choices?
The program has a set of guidelines. Some expenses may not be eligible in the first year. They would look at each situation case by case.
How does this approach fit with the Affordable Care Act and open enrollment?
The Affordable Care Act has a section that exempts healthcare sharing ministries. Members are exempt from requirements to have insurance and exempt from the mandate of the Affordable Care Act.
When you file your taxes, you have to complete a form to indicate that you’re a healthcare sharing member and exempt from fines for not having insurance.
The program isn’t subject to open enrollment. You can enroll any time.
If you’re self-employed, can you deduct membership contributions?
Membership contributions aren’t treated as premiums or charitable deductions. Members must talk to their accountants for advice. However, there is pending legislation that would clarify this point and treat healthcare share amounts in the same way for tax deduction purposes.
Where can people learn more about Liberty Health Share?
You can request a free information packet on their website. You can also call their toll-free number to ask questions.