According to one survey by The Future of Music Coalition, about 43% of artists and musicians currently lack health insurance. This is roughly 2.5x higher than the average national rate.
It seems natural to assume that as musicians and freelance creative workers, we’re going to be among those who are most affected by the new reforms around health care.
As of 2014, many of us will not only be able to afford health insurance for the first time, most of us will be required to buy it, or face a small tax for choosing to forgo the stuff.
The Insurance Store is Now Open
Despite the ongoing gridlock in Congress, the new Health Care Exchanges opened on October 1, 2013. This allows all of us to begin comparison shopping for health insurance – and to see if we’re eligible for any kind of Federal subsidy towards buying it.
Although the Federal exchanges had some trouble keeping up with the unexpectedly huge amount of traffic that flooded their servers in the first days, they’ve been getting progressively more stable.
The Economist reports that “glitches may be short-lived. Officials and contractors are rushing to fix them. New York’s exchange seems to have recovered. In one week it quadrupled the capacity of its computer servers, and as of October 8th more than 40,000 New Yorkers had signed up for coverage. But other exchanges are making slower progress.”
Earlier this week, I finished my own application, and was up in no time, comparing the cost of new plans on the New York State exchange. If all goes well, I’ll soon have insurance for the first time in a decade.
To get started yourself, visit https://www.healthcare.gov. I found that the entire sign-up process took about 1/20th the time of doing my taxes. It may not be instant, but it was over a lot sooner than I expected – even with freelance income to account for.
Who Can Expect Big Changes (And Who Will Be Unaffected)
If you’re one of those rare musicians, engineers or producers who already gets health insurance through an employer, don’t even worry about the exchanges. You don’t have to do a thing.
If you’re covered by Medicare or Medicaid, you’re already all set too. If you’re a young person on your parents plan? Cool. Now you can stay that way til you’re 26.
If you already pay for your own insurance and like it just fine, you may want to check out the exchanges anyway. There’s a good chance you’ll end up paying less, particularly if you’re young, have a pre-existing condition, or if you don’t make a ton of money.
For those who have been unable to afford healthcare in the past, there’s a good chance that’s going to change now.
How Much Do the New Plans Cost and What Do They Cover?
If you make anything under $46,000 each year, chances are you’ll also qualify for subsidies that could dramatically reduce what you pay out of pocket.
Coverage plans start with the “Catastrophic” tier, which is now available in high-cost areas like New York City for as little as about $180 a month. (In less expensive states, like Virginia, a similar plan now costs as little as about $40 a month.)
If this sounds like a lot of money to you, chances are you haven’t shopped for insurance before. In my own fruitless attempts to find affordable health insurance over the past decade, I’ve generally found plans that cost almost twice as much and seem to cover even less than these do.
The “Catastrophic” plans, which are available only to those 30 and under, will usually have high deductibles – meaning that if you have a major health emergency you’ll have to pay out over $6,000 in costs out of pocket before insurance kicks in. This is no good for anyone who anticipates recurring medical costs, but it could be a great option for otherwise healthy young people.
Still, even these kinds of plans also offer more coverage than you might expect. Under the Affordable Care Act, annual checkups, major vaccines, essential screenings and many women’s health services are now included in the cost of the plan.
The next level of coverage, the “Bronze” plans, start at about $300 here in New York, depending on your age. These plans offer lower deductibles, prescription plans, copays for doctor’s visits and the like.
(Once again, the quoted prices here in New York City are very high compared to the rest of the nation. If you live outside the big cities where so many of our readers are located, please hit the exchanges yourself for more accurate pricing. In less expensive states, plans may cost 1/5th as much.)
In New York City, “Silver” plans start closer to $360, and get you quite a lot of coverage: Copays of $30 for doctors visits and $10-$70 for prescriptions. Even significant services or medical procedures may carry copays of just $50-$100.
After that, you’re looking at “Gold” and “Platinum” plans, which start at about $400 and $450 in New York, and range all the way up to around $850 for a single adult.
Again, copays and deductibles go down – this time to as little as $0. Once again, exact prices may vary significantly depending on age, location and certain risk factors. For exact pricing, the best thing you can do is check out the exchanges for yourself.
If you can afford them, these plans are a great idea for families, older people and those with regular medical expenses.
You Might Not Pay Full Price
What if I said you could take these sticker prices and chop them in half? Well, if you’re making significantly less than $46,000/year, that may be the case for you.
For instance, a 30-year-old making $35,000/year might expect a monthly subsidy of over $100/month, effectively reducing his or her cost out-of-pocket for a Bronze plan by 33%.
A person making even less might spend as little as $130 for a Silver plan, even in New York City.
Those of you who live in other areas might pay next-to-nothing, even without qualifying for a government program like Medicare or Medicaid. (Which incidentally, have recently been expanded.)
Many more of those who make very little income will now be eligible for Medicaid, the government-assisted health program. In New York, the cutoff is now at about 133% of the Federal Poverty rate. That’s about $15,800 a year for a single person, or $32,500 for a family of four.
Opting Out of Health Insurance Will Cost You (But Not Much)
The other big part of the Affordable Care Act is the “mandate.” This means that if you don’t buy healthcare to help support what is essentially a volume discount for Americans across the board, you will have to pay a small tax to help offset the cost that your uncovered risk adds to the system.
If you could plausibly afford health insurance but choose to go without it anyway, you’ll eventually have to pay a fee of $695, or 2.5% of your income, whichever is greater. But that doesn’t really kick in until 2016. The opt-out fee for next year is comparatively slim.
In 2014, if you make over $9,500/year and don’t otherwise qualify for a “hardship exemption,” you’d only have to pay $95, or 1% of your income if you decide to go without health insurance. In 2015, that fee ramps up to $325 or 2%. Only in 2016, does the full fee finally kick in, should you choose to forgo insurance altogether.