Tami Kamin Meyer, a freelance writer and attorney based in Columbus, Ohio, was living her dream. She was practicing law and pursuing her journalism career—penning features for well-known publications including Forbes, MarketWatch and Better Homes & Gardens—while comfortably covered by her spouse’s employer-sponsored health insurance plan. But then divorce happened, and Kamin Meyer was left to fend for herself.
“I needed coverage pronto,” Kamin Meyer says, “but wasn’t sure what my options were as a self-employed individual with a modest income.”
Meyer’s situation isn’t unusual. Choosing a health insurance plan can be confusing and expensive, which has led many to go without one altogether—especially gig workers. And considering that the gig economy is growing quickly, this is a huge problem.
The State of Gig Worker Coverage
Today, 36% of the U.S. workforce—59 million Americans—earn income as gig workers, self- employed contractors or freelancers. While gig workers enjoy several advantages, like being their own boss and having flexible work hours, the kind of health insurance coverage that comes with a salaried job isn’t one of the perks. As a result, one in three gig workers are likely to be uninsured, which is more than three times the national average.
Indeed, surveys show that the number one reason gig workers don’t get health insurance is because they don’t think they can afford it. But there are a growing number of options that don’t involve paying a small fortune—from traditional medical policies to alternative solutions. Just keep in mind that the availability and cost of coverage can vary depending on your circumstances, such as where you live, your age, your income and sometimes even your health history.
Learning the Basics
The first thing you should do is figure out which health services you may need the most, and then determine whether those are covered by the policy you’re considering—as well as whether that policy includes the doctors, hospitals and pharmacies you use. You’ll also need to evaluate the monthly premium payments, deductibles and your out-of-pocket maximum limit to get an idea of how much a plan will cost yearly.
And let’s not forget copayments required for various services—for example, $25 for a primary care visit—and coinsurance, the amount you’ll have to pay for a service after you’ve paid your deductible—for example, if your coinsurance is 20% and the service you received was $100, you’ll pay $20 and the insurance will cover the rest.
Since the devil is in the details, experts recommend contacting a health insurance agent (who represents insurance companies) or a health insurance broker (who represents the insurance buyer) for advice. “It’s worth spending an hour with an independent broker who sells multiple types of products from many health insurance companies or alternatives to insurance,” says insurance expert Josh Archambault, founder and president of Massachusetts-based Presidents Lane Consulting. “They can take a look at your situation and help you choose what makes the most sense.”
Kamin Meyer set up a meeting with an insurance broker and they walked through not only her financial circumstances, but also her ongoing medical needs, such as how frequently she goes to physicians, sees specialists and requires prescription drugs. Her best option was to buy a private plan on the federal Health Insurance Marketplace, HealthCare.gov.
The Health Insurance Marketplace
Every state has a health exchange, with HealthCare.gov used by 33 states. The other 17 and the District of Columbia run their own exchange platforms—but even if you live in one of these places, you can still start your search by entering your zip code on the federal Marketplace website and you’ll be directed to the right place.
“If you don’t have health insurance through a job, your first stop should be the marketplace website,” says Louise Norris, a health policy analyst for HealthInsurance.org and author of The Insider’s Guide to Obamacare’s Open Enrollment.
The marketplace, established by the Affordable Care Act (ACA), offers plans that come in “metal” levels—bronze, silver, gold and, in some states, platinum. This scale indicates lower monthly premiums (bronze) compared to higher monthly premiums (gold) and how costs are split between you and the insurer. Through the website, you can also filter plans by premium and deductible amounts, check to see if your providers are in-network and enter your prescription drugs to find out whether they are covered.
One major downside, says Monica Watson, an Atlanta-based broker and president of Hene Watson Advisors, is that “these plans can change every January, including which carriers are offering which plans and which physician networks are included.”
Moreover, marketplace plans are only offered during the annual open enrollment period, which extends from November 1 to December 15 (for coverage that begins January 1 of the following year). But you may qualify for a special enrollment period or can switch to a different plan under certain circumstances, such as moving, getting married or divorced or having a child.
The big advantage to using the marketplace is that the listed plans provide comprehensive medical coverage, says Norris. The ACA requires policies to offer 10 minimum essential health benefits, including inpatient and outpatient hospital care, emergency services, mental health services, prescription drug services and preventive care.
And insurers can’t refuse to cover you or charge you more just because you have a preexisting medical condition, such as diabetes or cancer—“preexisting conditions are also covered to an unlimited maximum after meeting the plan’s out-of-pocket limit,” adds Watson.
Another nice benefit? Reduced monthly premiums are available through federal subsidies to those who qualify—these are essentially tax credits that are paid to the insurer that lower your costs, Norris says. “There’s a misperception that you have to be poor to get subsidies, but that’s not true at all,” she adds. The marketplace website can help you determine your eligibility and will do the math to show you how much these subsidies may reduce your monthly premiums as well as your out-of-pocket expenses, coinsurance and co-pays.
Generally, if your household income is 100% to 400% above the federal poverty level, you will qualify for a premium subsidy. This means an eligible individual can earn $12,880 to $51,520 in 2022 and qualify for a tax credit, while a family of four can earn $26,500 to $106,000 (income limits for subsidies are greater in Alaska and Hawaii because the federal poverty level is higher in those states). If you earn more, however, you will generally not be eligible for any subsidies and should check out ACA-compliant plans in your area.
ACA-Compliant Plans
These plans are ACA-compliant but sold outside of the federal and state exchanges. They can typically be purchased directly from an insurance company (through a broker or agent) and provide the same essential health benefits as on-exchange plans—though they can differ in terms of how comprehensive the coverage is, the scope of provider networks and how premiums are priced.
One major downside to these plans is that you can’t receive tax credits to purchase them, so you will most likely end up paying a lot more—on average, enrollees pay more than $7,000 in annual premiums for unsubsidized individual plans.
Qualifying for Medicaid
There is also a chance that you’re making too little money to be eligible for a marketplace plan. If this is the case, once you’ve filled out your application on HealthCare.gov, you may instead qualify for free or low-cost care through Medicaid. Today, more than 80 million people are enrolled in Medicaid, the largest source of health insurance after employer-sponsored plans.
Under Medicaid, patients usually don’t have to pay anything for covered medical expenses—though a small copayment is sometimes required. But one massive downside to this option is that 12 states (including Georgia, Florida, Texas and Wisconsin) haven’t expanded Medicaid eligibility under the ACA.
Getting Coverage Through Organizations
You might also find cheaper health insurance by joining a professional, alumni, trade or membership-associated organization. As a member, you may qualify for a customized group insurance plan through the organization, which works just like a regular health plan but with lower monthly premiums than an individual unsubsidized marketplace plan.
But since 2014, when the ACA started making private insurance cheaper and easier to buy online, many membership organizations no longer sponsor their own plans and instead partner with major insurance providers. Costco, for example, offers its members access to and additional discounts on a range of health plans through a partnership with a third-party platform.
Just be aware that prices for membership-sponsored plans can also vary by region. And be sure to read the fine print, because membership-sponsored plans aren’t legally required to be ACA-compliant, says Norris.
Fixed Indemnity Plans
You might also come across fixed indemnity plans, which are health plans that don’t meet ACA standards. As such, these can be problematic, financially risky and “skinny” policies that offer limited benefits, Watson says. They are more a form of supplemental coverage and shouldn’t be solely relied on. “A lot of them are just junk policies,” she adds, and could leave you exposed to significant costs.
The advantage to these plans, however, is that they are very cheap, with monthly premiums as low as $25. But, again, the risk of not being covered by insurance that caps out-of-pocket costs is that you could end up with extremely high medical bills. For example, a fixed indemnity plan may guarantee that you’ll receive $500 per day if you need hospitalization, but only up to a $10,000 cap. After that you’ll receive no coverage, Watson explains. “If you’re in a serious car accident, that does nothing to meet the $500,000 bill from the hospital.”
Short-Term Options
Also sold off-exchange are short-term health insurance plans, which typically last less than a year. As lightly regulated and non-ACA-compliant products, short-term plans offer monthly premiums that average 50% less than premiums for marketplace plans—at least for people who don’t qualify for subsidies. And they are available for as little as $55 a month. But, of course, that rate comes at the cost of more exclusions and fewer benefits.
These plans usually cover hospitalizations, emergency care and doctor’s office visits with no network restrictions. On the other hand, these plans deny coverage to patients with preexisting conditions and limit mandated ACA essential health benefits such as prescription drugs, mental health services and maternity care.
All the same, short-term plans may be the best alternative if you don’t qualify for special enrollment for a marketplace plan and need temporary coverage until the next annual enrollment period. But they’re not available in 11 states, including big states with large gig worker populations like California, New York, New Jersey and Massachusetts, notes Norris.
“Think of it as a last resort if you don’t have anything else. A short-term plan is better than no coverage,” says Norris.
Alternative Solutions
There’s also a growing number of alternative solutions to consider. For example, more than 1.5 million people have chosen vehicles called Healthcare Sharing Ministries (HCSMs), nonprofit, faith-based organizations in which members agree to share medical expenses (there are also medical cost-sharing plans that aren’t centered on religious beliefs). Membership is generally limited to people with a common religious faith, and those people must follow a variety of rules to maintain a healthy lifestyle—like avoiding tobacco and alcohol. While the extent of HCSMs is unknown, more than 100 have been certified by the federal Department of Health and Human Services.
There are also medical cost-sharing models that aren’t centered on religious beliefs, including the Texas-based nonprofit Sedera, which, in 2021, partnered with staffing company GigSmart to give gig workers easy access to its online platform. But these cost-sharing models aren’t health insurance, are largely unregulated and are not required to provide ACA-compliant health coverage.
While each nonprofit is different, members typically contribute a set monthly amount—which can range from $100 and upward, depending on the organization and a member’s age and income. Then, when members incur medical costs from doctor or hospital visits, they submit a bill to the nonprofit and expenses that meet its guidelines are shared and paid by the community.
“There’s no guarantee of what’s covered, how its covered and to what amount it is covered,” says Watson. So proceed with caution.
Another increasingly popular option is direct primary care (DPC), which largely leaves health insurance out of the equation. Patients are charged a flat monthly or annual fee for a limited set of primary care services from a doctor. Those may include real-time and after-hours access, extended visit times and, in some cases, home visits. That kind of personal attention is just one reason why proponents of the model contend that it delivers better care at lower prices.
There are currently over 1,700 DPC practices in 48 states and Washington, D.C., with membership costs ranging from $50 to $150 per month for individuals. But you’re on the hook if you need additional care outside regular doctor services. For this reason, many DPC patients also pair their membership with a high deductible health plan that offers some protections against hospitalization and major illness.
Millie content is licensed from Dotdash Meredith, publisher of Millie, Real Simple, InStyle, Investopedia, The Balance and more.
Linda Keslar is a metro-Atlanta-based writer who has written for The New York Times, The Washington Post and more.