The Best Health Insurance for the Self Employed

Health insurance options, plans and pricing vary by location throughout the U.S. Individual health needs also vary greatly. This makes determining the best health insurance for self-employed people a matter of sifting through the available local options and weighing the cost against the benefits. Several websites offer online comparisons based on criteria you set, so once you know what to look for, use the Internet as a tool to find your best options.

Coverage Types

• Health insurance comes in two basic types: comprehensive and catastrophic. There are many gradations along the spectrum from one to the other, but most plans are considered one of the two. Comprehensive insurance offers a low to moderate deductible and covers annual visits, some preventative care and some forms of emergency, acute and long-term care. Catastrophic insurance basically only covers you if you have a major health event, such as an accident or sudden illness. It has a high deductible, often $2,000 to $5,000, compared to $100 to $500 for comprehensive care. Self-employed individuals often opt for catastrophic care only because the monthly premiums are lower. If you are relatively young, take care of yourself and are in good health, this is a good choice if you can cover the deductible amount with your savings or help from family and friends. Within this spectrum are managed care plans that include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Point of Service (POS) plans. These also have varying benefits and restrictions with a wide range of costs.

Group Coverage

• Some insurance companies have special plans set up that allow self-employed individuals seeking coverage to join as part of a single group. You may need to go through an insurance broker (some online brokers don't charge you, but some will) or call the company directly and ask if it has a group rate for self-employed clients. Joining a group may get you a better rate than joining alone, or you may receive other benefits, such as coverage for pre-existing conditions. Many professional and business associations and chambers of commerce also offer group rates. If you are self-employed in a field that has an overarching guild, such as a writers' or designers' guild, check with that association or those related to your field.

Comparing Options

• Get detailed quotes from several companies, either through a broker or independent research, and compare them side by side. Go through each coverage item and decide how important it is to you. If you visit the doctor a lot, a low deductible with a higher premium will likely save you money in the long run, whereas if you tend to visit the doctor only once or twice per year, paying a lower premium and not meeting your deductible may be the wisest choice. As a self-employed person, you don't have a human resources representative to answer your questions about the health care plans, so don't be afraid to contact the companies and ask questions. If using any form of managed health care, find out if your plan will cover the medical professionals you want to see, as many such plans limit you to specific doctors or require specialist referrals. As of 2010, self-employed business owners can deduct medical insurance premiums from their taxes, subject to some limits, so this should figure into your calculations.

Reducing the Risks

• Without an employer to do the research for you, you run the risk of falling for a scam insurance carrier when seeking self-employed health insurance. If you choose to go with a carrier that does not have a well-known name and reputation, check with the Better Business Bureau to find out if anyone has registered complaints about the business. You can also contact your doctor to find out if he has experience with a specific carrier you are interested in. Additionally, your state's Department of Social and Health Services can inform you about any low-cost options if your self-employment income falls below the levels for state-sponsored care. The best option for you will give you the coverage you want in the area where you work and live, without overburdening your wallet.