Hey Self Employed Therapist! What About Your Own Health Insurance?
This is the first installment of the Nitty Gritty of Self-Employment series. In this series, I will address the difficulties and hurdles that you must go through to be a good boss and take care of your employee (it’s you— you are the employee).
Understanding health insurance is extremely important if you plan to run your own private practice. The reason for this is that it’s a twofold situation: you need to be working with health insurance companies to get paid, and you need to be sure that you are personally covered with health insurance. Luckily, now that interacting with health insurance companies is a norm for you, you already have a framework for all of the new information I am about to share!
I am writing this post with three assumptions about your self employment status and health insurance:
You do not have a full time employee (unfortunately a spouse or a business partner do not count).
You make more than the poverty limit to receive Medicaid (which is the goal here, right?)
You do not have a spouse or a partner that can carry the health insurance load through their employer.
I have good news for people that like bad news: you are going to need to buy health insurance strait from the insurance company, and this can be pricey. Individual plans can cost anywhere from $500 a month, family plans are $1400 at the lower end of coverage. This number will fluctuate depending on the type of plan you choose and the coverage you need.
The benefits of purchasing your health insurance from the insurance company
Here is the good news: you get to choose your health insurance company and what coverage you want to invest in. And the more you begin to work with health insurances for your business, the more you will be able to make an informed decision about this.
What Company Should I Choose?
The company that you most enjoy working for, and the one that pays well, will likely be the best company to insure yourself with. For instance, I can choose between health insurance company A and B. Company A has taken me for a ride; doesn’t return phone calls or emails, takes nearly a year to establish a credentialing contract, and then undercuts my claim fees to pay me less than what I have billed for. Company B has been polite despite the climate of the healthcare industry, is quick to establish a credentialing contract because they want me in-network as quickly as possible for the sake of the client, and pays me the entire fee that I bill for. Without question, as a provider and soon as an insured client, I want to give my business to company B. That also means other providers will want to stay contracted with them, meaning the specialists that you want to see for services will say “Yes! We take your health insurance!”
How do I choose a health insurance plan?
Another notable perk to purchasing your own health insurance, as someone that works with and interacts with a number of health insurances, is that you can pick your plan from an informed position. Now that I have seen firsthand what it is like to charge a client full price to meet a deductible, I know for sure now that I do not want to deal with a deductible myself. When the first of the year rolls around there will be a number of clients that will need to pay me my asking rate until they have met whatever agreed upon deductible their plan has.
I also can take a look at copays and coinsurance, with an informed opinion on what a reasonable copay is. Someone who has a low or no copay will likely take the time to come to therapy weekly, as an investment in themselves. The weekly cost is low and the financial burden is not on the forefront of their mind. Someone who has a $60 copay will usually choose to come every other week. This is an uncomfortable, but very real. It is worth it to me to pay a little extra monthly for health insurance coverage to not have to deal with a high copay or deductible.
Can I afford health insurance when I am self employed?
The other good news is that if you have opened up your private practice, your increase in salary will be enough for you to pay the extra amount for health insurance. This may seem like an extra overhead cost, but it has been there the entire time. Normally this money never comes to your attention because it is taken directly out of your paycheck. If you are looking back on the days of working for a clinic or a group practice, and wondering if this is worth it, it is! Yes, your employer did front some of the money for your health insurance before; but your employer could do that because they were profiting from your work. You are the one that earned that money to begin with! The idea that the overhead of starting your practice is too much, disregards the fact overhead covered by your previous employer was funded from the services you were billing for.
The bottom line
Paying for your own health insurance doesn’t need to be such a bummer. Having your independence means you have options! Take a deep breath, find your preferred company that you want to give business to, and take care of your one and only employee, yourself.
TL;DR
If a partner or spouse is not covering you with their health insurance, you will need to purchase your own health insurance directly from the health insurance company.
You get to choose what company to purchase your health insurance plan from. You have options as a consumer without any strings attached! Take note of what companies you have enjoyed working for. What companies have paid the most? What companies are you more likely to stick with as a provider?
This is going to cost a lot, but it is worth it to cover yourself with a plan that covers your needs. Keep in mind how clients who have large deductibles and copays often do not invest in their own mental health and limit services.
