Self-Employed Health Insurance in Texas

If you're self employed and live in the State of Texas, your health insurance options are somewhat limited. In fact, Texas ranks 50 out of 50 states in the proportion of residents -- 25.6 percent -- who carry no health insurance, according to a 2010 ranking by the non-profit United Health Foundation. Nevertheless, there are some options worth looking into if they meet your needs.

Private Insurance

• "It is expensive," admitted Gaston Arguelles, a self-employed independent State Farm insurance agent in Houston. "I carry a high deductible myself. Prices have just skyrocketed."

  With recent federal health reform changes, Arguelles added, what is considered un-insurable "really depends" and "there is almost always some amount of underwriting. . . . Some will add a surcharge for certain conditions and some will insure, for instance, people who have been cancer-free for a number of years."

  He then noted: "The best you can do is answer the application as carefully as possible. Everything is at the mercy of underwriters."

  It's difficult to generalize on rates, but another agent cited $250 per month on up for a hypothetical healthy, non-smoking, single female, age 55, with deductibles $5,000 and $10,000. "Due to health care reform, all preventive care is now free on all new plans in the U.S.," said Cameron Frey, agent for Selected Benefits, which oerates offices in Houston, Dallas, San Antonio and Austin. .

High Risk Insurance

• "The Texas Health Insurance Pool (state risk pool) is available to Texans under age 65 who are self-employed solo contractors . . . [who lack] access to an employer group and have an uninsurable medical condition for individual coverage from carriers such as Blue Cross and Humana," said Steven Browning, the pool's executive director, in an interview.

  However, it's no bargain. Due to the high risk conditions it covers, the pool charges twice the commercial rate. Even so, it experiences millions in losses every year. By state law, insurers must cover these losses.

Group Options

• You may need to look beyond Texas, but check out the possibility of joining a trade or professional organizations at group rates. For instance, the National Association for the Self Employed, or NASE, has major insurers that offer members' insurance in all but seven states. Even in those states -- Connecticut, Vermont, New York, Minnesota, North Dakota, Montana and Washington state -- NASE offers medical and dental discount programs, as well as hospital and emergency room benefits. Check out also groups in your specific trade or profession, within Texas and nationally. If you are age 50 or over, try the American Association of Retired Persons.

Shop Carefully

• Be wary, however, before you join a group specifically to get health benefits. For instance, if any actual insurance rates are too steep for you to handle, don't be lulled by assurances that "discount" programs are "just as good." A large number of providers do not accept many medical and dental discount plans, even those listed on the plan. This is because some drop off after participating for a time. For this reason, contact a sampling of the listed providers before signing up to make sure they still participate.

Considerations

• Texas is hardly the only state in which the self employed, especially sole proprietors, experience difficulty finding affordable health insurance. Some insurers try to help, by allowing businesses with only two employees "small business" designation, but the cost of insurance still is high for most businesses.

  However, if you follow the above tips, you may be able to locate coverage--but you'll likely pay a hefty price. Keep shopping, focusing on groups that offer health benefits to members.