Freelancers on the hunt for health insurance

Lots of choices, pitfalls

By Sheree Crute

After working as an independent writer for 15 years, AHCJ member Maia Szalavitz considers herself fortunate when it comes to health insurance. “I feel lucky. I’m healthy and so long as my prescriptions are covered, I’m basically happy,” she says of her policy with the Health Plan of New York.

While the health plan is often considered a poor option for folks trying to avoid clinics and inexperienced physicians, HIP surprised Szalavitz by including Manhattan physicians in their network that met her standards.

“I’m pretty selective about my doctors and I researched a physician on the New York’s Best Doctors list and found that he took my insurance,” recalls the author of “The Boy Who was Raised as a Dog and other Stories from a Psychiatrist’s Notebook,” (Basic, 2007). Szalavitz obtained her HIP policy through the National Writer’s Union. She was even shocked to find that a high-priced fertility work-up with one of city’s top doctors was covered. Not a bad return on her $350 monthly investment in today’s insurance market.

Szalavitz has done well, in part because New York’s community rating insurance law can be helpful to individuals and small group members seeking coverage.

That's not the case in Illinois, where Chicago-based health business writer Neil Versel found himself subjected to medical underwriting and pre-existing condition exclusions when he attempted to find an individual policy after leaving his employer’s COBRA plan.

“I was rejected by two PPO plans and I ended up with a high deductible-health savings account (HAS) plan. It’s supposed to give you more control, but it just gives the insurance company less responsibility,” Versel says. With high-deductible HSA’s, a low-monthly premium (often as low as $150) is offset by deductibles of $2,000 or more that are supposedly not a problem because you can tuck away medical expense money in a tax-free savings account up to that amount. The policies tend to come with more exclusions than other policies and, as Versel notes, “my deductible is low but I have to put away $250 a month in the HSA.”

 Szalavitz and Versel's situations illustrate the most important points for self-employed individual and small group buyers in search of health care coverage:

1. If it looks like a cheap deal — it isn’t. There’s a hidden cost.
2. Pay for the care you’ll really need, not a dollar more.

That said, finding the right policy requires research, tenacity and a healthy dose of skepticism when things don’t look quite right.

“Freelancers seeking insurance through associations are very often the target of insurance scams,” says Mila Forman, a professor and researcher at Georgetown University’s Health Policy Institute. “There was a huge proliferation of schemes between 2000 and 2005, notably the case of an unlicensed insurance company called Employer’s Mutual that collected millions of dollars of premiums without paying claims and affected members of a number of associations including the NWU.

“It was ultimately dealt with through the U.S. district court,” says NWU president Jerry Colby who explains the organization purchased the policy through a trusted, licensed broker. NWU’s affected members were eventually exempted from the unpaid bills, but only after waiting out a lengthy court case.

“The problem is the laws on associations vary from state to state and there are no companies currently selling national policies to small groups,” Forman explains. “Depending on where you live, rate protections, health and medical need surcharges and other factors will be different than those for employees covered through large corporations.”

Still there are several ways to make sure you don’t end up with empty pockets and a pile of unpaid medical bills.

“To begin with,” Forman says, “beware of associations that have been formed solely as a front for insurance schemes — there are many. If you want to go through a small group, choose an established professional trade organization.”

Small organizations almost always go through brokers but make sure a company is licensed by checking your state’s insurance department Web site. NWU members, for example, could have saved themselves a great deal of trouble by simply looking up Employer’s Mutual (the broker evidently did not) before signing up. Next, check the company’s complaint and payment rates by logging onto the National Association of Insurance Commissioners Web site and go to the consumer section. If you’re in doubt about your rights in your state, the National Association of Health Underwriters site answers questions about community rating and medical underwriting and lists the laws for every state.

Once you’re comfortable with a company’s status and pay rate, do your best to match the policy to your medical needs.

One independent New York-based editor pays $1,700 every three months for an Oxford Health Plan that she buys through membership in the Editorial Freelancer’s Association. But the relatively high-priced policy saved her life when a rare cancer she had in 1989 — leiomyosarcoma — returned after 13 years.

“There’s no way I’d have been able to finance the surgery I needed,” she said. The woman would not allow her name to be used because she is still fighting with Oxford to get some of her medical bills paid. “It’s been a constant tug-of-war for information and they do refuse many treatments before actually covering them,” she said.

If you’re young and confident about your health, your policy should at least cover accidents and hospital treatment, “but low-cost contracts can hide many exclusions in complicated riders,” Forman warns, so read the fine print.

Also, you may not need an association to get the best deal.

“You can obtain insurance as a sole proprietor or individual in many states, including New York,” says Jason Silverman, a broker and insurance consultant to Mediabistro. The not-for-profit site www.healthinsuranceinfo.net is a great resource for unbiased consumer information for every state.

The bottom line — put your investigative reporting skills to work and shop carefully before you sign up and send in a check.

---

Sheree Crute is an AHCJ board member and a freelance writer in New York.