by Catherine Noble Beyer
With medical bills being the most common cause of personal bankruptcy today, health care costs are an increasingly large concern for both individuals and small businesses. Premiums have been rising for years while benefits have remained the same or have declined. This makes it harder for small businesses to cover significant portions for their employees, leaving individuals facing the daunting choice of paying expensive premiums or chancing a major medical incident without insurance.
In addition, the new legislation from the Affordable Care Act (ACA) has created a complex set of requirements and options that has left many people scratching their heads.
Traditional Insurance Options
Employer-based insurance is the most traditional way of getting insurance. As such, some artists find themselves working a second job primarily out of concern for benefits, even when they can otherwise make a living through their crafting.
“Health care weighs heavy into all of my decisions I have made regarding 2014 and beyond,” reports Angela Heim of A. Heim Jewelry. “I run my own business, working full-time for myself, but in order to keep my family afloat financially, I have to hold another 30-hour-per-week job just so I can secure ‘affordable health care.'”
Insurance through Organizations
The most basic idea behind insurance is that the more people who pay in, the more money is available for those who need it (and the more profit the insurance company makes). As such, large companies get better deals than small companies, and self-insurance can be prohibitively expensive.
However, any large organization can negotiate for better insurance rates. As such, some artist associations provide health insurance to members. Such groups include the American Craft Council, the Craft and Hobby Association, Fractured Atlas, and the Graphic Artists Guild.
In addition, there are groups that provide information on health care resources tailored to artists and the self-employed, such as the Artists’ Health Insurance Resource Center. Fractured Atlas also provides considerable information. Many college and university alumni associations also offer a variety of insurance benefits.
Considerations for Employers
If your business employs less than fifty full-time workers, you are under no obligation to provide health insurance. Businesses have long seen benefit in offering insurance to prospective employees, but rising costs in a tough economy makes it increasingly difficult.
Consider what your company can afford to offer in comparison to alternatives such as the Affordable Care Act exchanges. If you offer insurance, your employees will not have the option of getting insurance through the exchange, unless your premiums are more than 9.5% of their household income. Thus, there are circumstances where not offering insurance might benefit your employees.
If do you wish to provide insurance you can use the Small Business Health Options Program (SHOP) for assistance in finding the appropriate insurance policy for your business. You may also be eligible for the Small Business Health Care Tax Credit, which can cover up to 50% of premiums you pay on behalf of your employees.
Reactions to the ACA
The Healthcare.gov website continues to be a major deterrent for insurance seekers, and not just because of the well-publicized technical problems. “It annoyed me that I had to create an account just to look at prices and coverage options,” says Bonnie Gibson of Arizona Gourds. “By the time I finally got through, I had already contacted three different insurance providers individually to request information. I also found a website called Health Sherpa that let me look at plans and pricing without giving the government all of my information that was required on the Healthcare.gov site.”
Health Sherpa lists options based on age, location, income (to calculate subsidies), and type of coverage: Bronze, Silver, Gold, or Premium. Many sources that give example prices discuss only Silver plan premiums. It lists premiums, deductibles, and out-of-pocket maximums, all of which are of central importance to a health care budget.
Opinions of the value of the exchanges and the new requirements vary widely. “This is like winning the lottery. I don’t have to be wealthy to be healthy!” says contemporary paper sculptor Francene Levinson. “I can enjoy creating my paper sculptures in a happy frame of mind. Some young members of my family live in Oregon and are very happy with the lesser cost and increase in quality of plans that are available. There is a bright future for this health care law.”
For Levinson, the best benefits included free annual check-ups, as well as vastly reduced costs for medications through the closing of the Medicare “doughnut hole,” which formerly left recipients liable for thousands of dollars.
But Gibson has a much different opinion. Not only did she find the most suitable policy outside of the exchange, but she’s concerned about future changes in health care requirements. “Next year, I’ll be forced to get an ACA-approved plan for 2014, and the costs will be much higher.”
Weighing the Options
Buying insurance, like any major purchase, is a complicated issue. Every person and family has their own needs. Low premiums generally come with high deductibles. This is attractive if you’re relatively healthy but problematic if you expect significant medical bills. There’s also a wide variety of types of insurance and assorted acronyms: health savings accounts (HSAs), preferred provider organizations (PPOs), health maintenance organizations (HMOs), etc., and each comes with positives and negatives.
Other things to consider include whether they offer free preventive services,what exactly the insurance covers (such as mental-health treatments), prescription drug coverage, and which doctors are in-network.
There are also discount programs available, such as what is offered by the National Association for the Self-Employed. However, these are not insurance and, thus, do not fulfill the requirement to be insured. They may, however, lower your medical bills.
Negative publicity surrounding the ACA has led some people to presume participation is not in their best interest and, therefore, have not even looked at what the exchanges offer. Others are under the impression that not qualifying for subsidies automatically makes exchange plans unavailable or unaffordable.
Also, since states have the opportunity to provide their own exchanges, rates vary considerably across the country. The experience of one person can be entirely different from that of those who are located elsewhere. Some people are buying insurance for the first time in their life thanks to the exchanges, while others find better deals elsewhere. Keeping an open mind about all insurance options is paramount in finding a plan that’s right for you.
Fact or Fiction?
With many aspects of the Affordable Care Act (or ACA, commonly nicknamed “Obamacare”) having gone into effect on January 1, there are plenty of things on people’s minds, both for and against it. With the oft-repeated “If you like your health care plan, you can keep it” deemed 2013’s “Lie of the Year,” it’s understandable that most Americans don’t know what is mythical and what is statistical. Here are 10 dominant worries, and a brief summary of what is currently being panned or praised about these concerns.
Is the ACA a government program like Medicare/Medicaid? No. All insurance purchased through ACA exchanges comes from private insurance companies. The government has no involvement in your relationship with your insurance provider.
Will I be fined for being uninsured? Anti-ACA: In most cases, yes. In 2014, the fine will be 1% of household income, with the maximum being the price of a Bronze care plan. Pro-ACA: Insurance becomes more economical overall as more people pay in.
Will an inexpensive plan significantly help if I suffer a major medical event? Yes. Surgeries cost tens of thousands of dollars. Regardless of the plan, the maximum yearly out-of-pocket expense is $6,350 for an individual and $12,700 for a family.
Why am I seeing higher deductibles? Anti-ACA: Higher deductibles mean more out-of-pocket expense before insurance starts covering costs, regardless of how good the coverage is. Pro-ACA: Higher deductibles bring premiums down.
Which is better: low premium or low deductible? Low premiums are good if you don’t have medical needs but want a safety net and free preventive services. Low deductibles, however, are important for people who expect to have significant health care bills.
Can I keep my doctor? Anti-ACA: Changing policies can lead to losing access to your current doctor. Pro-ACA: Doctor coverage continues to be determined by the insurance companies.
Why is insurance in some states cheaper than in mine? Insurance costs are complex. Each state has its own legal requirements, and insurance companies devise pricing arrangements according to local market conditions.
Why can’t I buy insurance from another state? Regulation is one issue. Another is since insurance companies make deals with specific providers, it’s likely doctors and hospitals in your area aren’t covered by an out-of-state insurance.
Am I required to provide insurance to employees? Anti-ACA: If you have more than 50 full-time employees (FTEs) or the equivalent, yes, you must insure. If you have under 50, and are in need of tightening your belt financially, you can now drop the staff’s health care insurance without any legal ramifications or guilty conscience. This decision to cut benefits might impact 96% of America’s businesses down the road. Pro-ACA: 96% of businesses have less than 50 FTEs, and of those that do, over 96% already provide insurance. Less than 0.2% of businesses are therefore affected by the requirement.
Is it likely my employer will drop insurance coverage? Anti-ACA: Rising insurance costs are forcing some businesses to drop insurance coverages. These costs are incurred because the ACA requires a variety of benefits to be included that individuals may not need. Pro-ACA: Insurance prices have been rising substantially for years without additional benefits. Employees who lose insurance through their employer can purchase it through the ACA exchanges. Required benefits include preventive care, mental-health treatment, and maternity care.
Prescription for a Headache-free Decision
It’s essential to understand what the new law mandates for you as an individual or as a small-business owner. Whether you are an employee or an employer, here are some websites that will help you figure out what your next move should be. Insurance rules and regulations are shifting, even as this issue goes to press. Here are some sites that can assist you in coming to terms with all the new terms!
American Craft Council (craftcouncil.org)
Artists’ Health Insurance Resource Center (ahirc.org)
Craft and Hobby Association (www.craftandhobby.org)
Fractured Atlas (www.fracturedatlas.org)
Graphic Artists Guild (www.graphicartistsguild.org)
Health Insurance Marketplace (www.healthcare.gov)
Health Sherpa (www.healthsherpa.com)
Small Business Health Options Program (SHOP) (www.healthcare.gov/marketplace/shop)