Finding a New Policy
Three years ago, I left the ranks of corporate America, but I had to be dragged kicking and screaming. And health insurance was the reason why. The situation wasn’t all bad: During a wave of downsizing, my then-employer had let me go as a full-time employee but was keeping me on contract. This gave me the green light to take on a lot of lucrative freelance work that was coming my way. The downside was losing my health insurance. I had heard horror stories about how expensive individual policies could be — assuming you could even find one. The result: I really, really did not want to go.
Perhaps you too have had a taste of this experience. Whether you’re thinking of starting your own business, going part-time, retiring early, or freelancing in the wake of a layoff, you may be among the one million to three million midlife women looking at a future full of promise and excitement — but no health insurance. In fact, these days even full-time employees can’t always count on coverage. Only 60 percent of American companies now offer healthcare benefits, down from 69 percent in 2000, according to the Kaiser Family Foundation. Among small companies, the figure is only 45 percent. And if you’re a parent, there may be twenty-somethings to worry about. Their coverage usually lapses when they leave college and doesn’t start again until they find a job with benefits — if they find a job with benefits. Today, we are all at high risk of joining the 40 million Americans (including 14 percent of midlife women) who lack health insurance.
But here’s the surprise: Finding a new policy wasn’t nearly as bad as I’d feared.
Because I so dreaded the shopping process, I continued my corporate coverage through COBRA (the Consolidated Omnibus Budget Reconciliation Act, which allows you to buy up to 18 months of post-employment insurance). The plan was excellent — an Oxford PPO with $20 co-pays and 70 percent coverage out of network — but at COBRA rates it was extremely pricey: nearly $1,300 a month for me and my three kids. So I fought the fear and started to research.
I’ll share my steps, but first, a word of caution for any of you (or your post-college kids) who are thinking of forgoing health insurance: Don’t. Having covered personal finance for the past 15 years, I know that not having health insurance sends more people into bankruptcy than anything else. Few things drive me as nuts as the stories I hear from solid earners who "can’t afford" health insurance but manage to come up with $150 a month for the cell phone and another $80 for mani-pedis. We tell ourselves nothing catastrophic will happen, and then it does. Now, let’s talk about what you need to know.
About Individual Policies
At one time, being without employer coverage meant looking high and low to find yourself a new group and, as a result, a new group policy. But the number of carriers offering individual policies has grown significantly in recent years; on ehealthinsurance.com, the biggest online market for health insurance, you can compare plans from more than 175 companies. Just enter your gender, age, ZIP code, and smoker status, and in a few seconds you’ll be presented with a menu of policy choices and prices. You can also buy insurance from the growing ranks of agents who specialize in the individual market.
And here’s the really remarkable thing: You may be able to get a better deal for yourself than your employer is offering, says Paul Zane Pilzer, author of The New Health Insurance Solution. Many companies are requiring employees to contribute more toward their own health coverage, so it’s time to start thinking creatively. If you have a spouse and kids, you and your husband can stay on your respective employers’ plans, putting the kids on whichever is the least expensive of the two. Or you can stay on your employer’s plan, but shop for your spouse and kids. Or you can quit the employer plan (or plans) entirely and shop around for everyone.