With Health Reform Self-Employed Texans Will Be Able to Buy Affordable Health Insurance
Bruce is a 61-year old, self-employed communications and fundraising consultant. As he puts it, his body is “falling apart.” He has had several serious health problems including heart attacks and cancer. He relies on his high risk pool coverage to help him access the doctors and prescription drugs he needs to manage his chronic conditions and stay out of the hospital.
For nearly 30 years he had an individual health insurance policy his parents first bought for him in the 1960s. In the 1990s, his insurance company refused to renew his policy, he thinks because he’d had a heart attack. He applied for coverage with other insurance companies and was rejected because of his pre-existing conditions. Considered “uninsurable” by insurance companies, Bruce enrolled in risk pool coverage, the only source of coverage that cannot reject individual applicants in Texas.
Bruce’s risk pool coverage comes at a steep price. His premiums just to cover himself are $10,000 per year. By law, premiums in the Texas high risk pool cost twice as much as comparable policy in the private market.
In addition to steep premiums, Bruce pays significant out-of-pocket costs. His annual deducible is $2,500, and on top of that, he pays out-of-pocket for copays, coinsurance and health care services not covered by the high risk pool, like dental services. He estimates that he spends about $20,000 a year in out-of-pocket health care costs on top of his $10,000 annual premiums.
Even though he has to pay and arm and leg for it, Bruce feels fortunate to have been able to maintain coverage and believes that without it, he would not have made it to age 61.
How the Current System Fails Self-employed People like Bruce
- In Texas, self-employed people cannot buy coverage like small businesses in the “group market.” In the group market, small employers cannot be turned down for coverage. Instead, the self-employed have to buy coverage on their own in the individual market, in which insurance companies routinely reject applicants with pre-existing conditions.
- People with serious health conditions will never be able to buy coverage in the individual market, and can only get very expensive coverage in the high risk pool, if they can afford it.
- Treatment for pre-existing conditions can be excluded for up to 18 months in Texas for coverage offered to self-employed people in the individual market—6 months longer than the waiting period in coverage sold to small businesses in the group market.
National health reform provides help to the 13.1 million self-employed Americans like Bruce, who are left to try to buy health insurance in the individual market, where insurance companies can reject people with pre-existing conditions.
Top Three Ways Health Reform Will Help Bruce:
- Insurers will not be able reject applicants with pre-existing conditions or set premiums based on a person’s health status.
- With health reform, Bruce will be able buy his coverage in the Health Insurance Exchange (just like members of Congress), where he can choose among competing insurance companies and buy good coverage at the average price for a 61-year old in Austin. This will save him thousands of dollars each year.
- Like everyone buying coverage through the Exchange, Bruce’s policy will have an out-of-pocket cap of $5,950 a year ($11,900 for families). This reliable limit on the out-of-pocket health care costs a person will face in a year provides economic security for families and protection from medical bankruptcy that does not exist for many people today.