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Healthcare for Freelancers 101: The Ultimate Guide

15 min. read
December 22, 2023

Disclosure: This article is sponsored by CrowdHealth, and also includes affiliate links which means I may earn a commission if you make a purchase through my link. All opinions are my own.

I debated whether to write this post. What could be more yawn-inducing than open enrollment for health insurance? (Okay, tax law, but bear with me….)

Navigating the health care system in the U.S. is complicated and confusing. Health insurance premiums, deductibles, and copays can get really expensive, especially for freelancers and consultants who don’t have an employer paying for anything.

Case in point, here’s what a UX consultant wrote to me in an email: “My biggest headache is currently health insurance. It’s so expensive for a family of 4 with two self-employed parents. Really tough.”

Though I wouldn’t call myself an expert in health insurance, I know more about the options freelancers, consultants, and solopreneurs have than most people. My dad owns a small insurance agency in Nashville, so growing up, I received a kitchen table education in health insurance.

I’ll explain your options, as well as some key terms. Hopefully, you’ll pick up an insight or two and be in a position to make a more informed decision.

Table of Contents

“If I freelance full time, I’ll lose my health insurance.”

The other day, I was remembering my friend George’s health care quandary, and his story is a good place to start.

George and I worked together at my first and only agency job, right out of grad school. The new guy or gal tends to be a wrench in a small agency’s gears, and my inexperience with copywriting and general enthusiasm made me doubly suspect.

Eventually, I won George over by plying him with homemade chocolate chip cookies I baked in the toaster oven and with a slim volume dedicated to collective nouns, An Exaltation of Larks by James Lipton. True story.

We became friends, and when the economy tanked six months later and I got laid off, we kept in touch. Years passed. Full-time freelancing fit me like a purple unitard, and I tried to persuade George to leave the agency. Every time we talked, he had yet another grievance. The trouble was, George didn’t want to lose health insurance.

Many creatives find themselves in this pickle. With a 9-to-5 job you get benefits, including health insurance, and other people owning your calendar. As a full-time freelancers, you get freedom, flexibility, and financial upside. Why wait for a raise when you can give one to yourself at anytime by landing more projects?

If you don’t like your job, the security of that regular paycheck comes with a cost. There’s a high correlation between job dissatisfaction and weight gain, higher stress, serious illness including heart disease, depression, anxiety, and a shorter lifespan.

How ironic that we need health insurance more when we stick with jobs we hate!

George eventually put in his notice, and he broke the news to me over a lunch of Thai noodles. Enough was enough, he said. Or rather, his wife’s health coverage was enough. It turns out that she was able to add George to her policy and they were going to save money each month.

This discovery was bittersweet. George ran some numbers and figured out that keeping his job and keeping his coverage had cost him over $5,000. Woof.

Still, he had finally taken the leap, so in his honor, I ran a lap around the restaurant’s dining room. True story.

Everybody’s health and insurance situation is different, and if you’ve got a 9-to-5 job you love with great benefits, by all means keep it. However, if you aren’t satisfied with your current full-time job or if you’re out on your own and not loving your health insurance policy, keep reading.

What are my healthcare options as a freelancer?

Researching health insurance may have less appeal than plucking nose hairs with kitchen tongs, but you may have pleasant surprises in store.

For example, my family quit conventional insurance in December 2016 by switching to an ACA-compliant health sharing company.

Why, you ask?

With conventional insurance you have coverage as long as you pay your monthly premiums and meet the deductible. However, a weird regulatory loophole enables insurance companies to “guarantee” payment of your medical bills and later deny your insurance claims. They can hide behind pages of jargon and give you the old suit-and-tie shrug: “That procedure isn’t covered.”

The Kaiser Family Foundation publishes an analysis of the data that the Affordable Care Act (ACA) requires insurers to release. Get this: Out of the 291.6 million in-network claims received, 48.3 million were denied, for an average in-network claims denial rate of 16.6%.

A pie chart of denied claims in the US in 2021

In other words, anyone with a health plan through has a nearly 1-in-5 chance of a claim being denied. Some issuers denied 30% or more of in-network claims!

Health coverage doesn’t guarantee everything is covered, but don’t let this scare you. Let this motivate you to educate yourself.

Different types of health insurance for self employed individuals

When it comes to health insurance, there are various types of plans available, each with its own set of advantages and disadvantages. It’s essential for freelancers to understand these differences and choose a plan that has a high likelihood of fitting your needs and budget.

  1. Individual plans. These plans are purchased directly from private insurance companies and provide coverage for individuals and their dependents. They offer flexibility in terms of coverage options and what you pay for monthly premiums and deductibles. Think of these individual plans as bespoke suits. You can tailor them to fit your requirements.
  2. Group plans through professional organizations. These plans are often offered by industry-specific associations or unions—for example, check out Freelancers Union—and provide coverage to a group of individuals who share a common professional affiliation, such as teachers or master carpenters. Group plans can sometimes offer more comprehensive coverage at a lower cost due to the collective bargaining power of the group.
  3. Government marketplace plans. These plans are offered through state or federal marketplaces. Check out this page for more information. They provide a range of coverage options and subsidies based on income that meets the requirements of the Affordable Care Act. For freelancers with limited financial resources, a government marketplace plan is the only viable option. And if your income is low enough, you may qualify for Medicaid, a state and federally funded program that provides health coverage to eligible individuals and families.
  4. Short-term health insurance. Short-term health insurance plans provide temporary coverage and may be an option if you need coverage for a brief period—for example, after finishing grad school or losing your job. Keep in mind that these short-term health insurance policies often don’t cover pre-existing conditions and may have severe coverage limitations, like that guy at the neighborhood pool who insists on wearing speedos.
  5. COBRA. If you recently left a job with employer-sponsored health insurance, you may be eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage. Despite being quite a mouthful, COBRA allows you to continue the health insurance plan from your former employer if you pay the portion your employer used to cover, meaning the full premium. Based on the plan your company chose, this can be very expensive, and chances are, you wouldn’t have chosen that plan for yourself.
  6. Healthcare sharing. Healthcare sharing or crowdfunding isn’t health insurance, per se, but it’s an affordable alternative and thus worth including in this list. Healthsharing revolves around a membership model where a group of individuals agree to divvy up everyone’s medical expenses on a monthly basis. We’ll delve into this model in greater detail below. Self-employed individuals wanting cost-effective care like it because they can keep seeing providers who might otherwise have been “out of network.”

Key health insurance marketplace terms to know

Knowing these key terms and concepts will help you make it through the health insurance maze:

  • Deductible. This is the amount you must pay out of pocket before your insurance coverage kicks in. Different plans have different deductible amounts, and we’re talking about the difference between $1,000 and $10,000 or more. It's crucial to choose a plan that aligns with your budget and expected healthcare needs.
  • Copay. This is a fixed amount that you pay for certain healthcare services, such as a doctor's visit or a prescription medication. For example, you might pay $25 every time you go to a doctor or $15 for prescriptions. I know I’m starting to sound like my dad, but be sure to check your plan's copay amounts to ensure that you can afford them.
  • Coinsurance. This is the percentage of the cost of a covered healthcare service that you are responsible for paying, after you've met your deductible. For example, if your coinsurance is 20%, you would pay 20% of the cost of the service and your insurance company would cover 80%. 20% may not seem like much until you have an expensive surgery or extended stay in the hospital. Yay for human frailty!
  • Out-of-pocket maximum. This is the maximum amount you will have to pay for covered services in a given year. Once you reach this maximum, your insurance company will cover 100% of the cost of any additional covered services. This maximum can help to curb anxiety associated with big medical bills and coinsurance.

Tips for choosing the best health insurance for freelancers

We freelancers can’t rely on the HR department to choose our health insurance plan. We’re responsible for weighing the pros and cons ourselves. The question is, what kind of coverage is realistic and necessary for you, based on your history and current health?

Again, let me put on my insurance dad had and make some recommendations:

  1. Choose a monthly premium you can afford. However, don’t be short-sighted by choosing a “cheap” policy and not getting the coverage you need. Better safe than sorry. (I’m pretty sure insurance companies invented that saying.)
  2. Choose a plan with a wide network of providers in your area. That way, you have convenient access to what you need. You don’t want a cheaper plan that requires driving an hour to visit the one in-network doctor. Time is money, people.
  3. Determine whether you need coverage for dependents or pre-existing conditions. If you have children or any pre-existing medical conditions, you need a plan that’s a big umbrella, not a tiny parasol. My wife and I have two kids, and after our middle kid had a freak accident (translate: broken arm) and our youngest got diagnosed with a disability, we were glad that our health sharing membership has generous coverage.
  4. Evaluate costs and benefits. When selecting a health insurance plan, you want to balance costs and benefits. There will always be trade-offs, so the key is being realistic about your healthcare needs, including medications, doctor visits, and consultations with specialists:
    - If you take prescription medications on a regular basis, do the math and choose a plan that provides comprehensive coverage for your specific medications. You may pay more for a monthly deductible but come out ahead after twelve months.
    - If you’re still a young whippersnapper in good health and rarely visit the doctor, lower monthly premiums, higher deductibles, and higher coinsurance may be the way to go.
    - However, if you have a chronic illness or require frequent medical care, a plan with higher monthly premiums and lower out-of-pocket costs may save you money in the long run.
  5. Carefully review the benefits and coverage offered by each plan. Might I suggest a spreadsheet? Some plans offer additional perks, such as wellness programs, preventive care, or access to a wider network of healthcare providers. These additional benefits can play a significant role in your healthcare experience as a whole and therefore deserve consideration as you evaluate the various healthcare options for freelancers.

To recap, the “right” health insurance plan is the one that fits your unique needs and financial situation and comes with acceptable trade-offs. By taking the time to research and compare different plans—I know, I know, it’s more tedious than data entry—you gain both the necessary coverage and something the experts call peace of mind.

Paying for insurance is a part of life, at least in the United States. You don’t have to like it, but giving the decision an hour of your full attention could be the most profitable hour you have this year.

Tips for managing healthcare costs as a freelancer

  1. Utilize preventive care services, such as routine check-ups and vaccinations, to avoid costly medical conditions. I don’t like physicals, but I do like establishing a baseline each year.
  2. Compare prescription drug prices and utilize generic alternatives whenever possible.
  3. Take advantage of discounts and wellness programs offered by insurance providers to further reduce costs.
  4. Understand tax deductions for health insurance. Freelancers may be eligible for tax deductions on health insurance premiums. Go here to find out if you qualify for premium tax credits.

Health insurance isn’t your only option. Crowdfunded healthcare is another viable option.

Earlier, I mentioned the healthcare crowdfunding, which is also called health sharing.

Here’s how the model works in broad strokes, with examples from a company called CrowdHealth:

  • You pay a monthly fee to be a part of a health sharing community. CrowdHealth’s fee is $50 a month.
  • You also make a monthly contribution to the community “fund.” CrowdHealth members make a contribution of up to $135 per month. (That amount is higher if the member is over the age of 54.) These contributions cover the community’s health expenses, and if the community’s bills are lower during a given month, the next month’s contribution will decrease too. Yes, you read that correctly: Some months, your “premium” may go down.
  • You pay the first $500 of each health “event,” which means visits, treatments, and procedures related to an illness or injury. CrowdHealth waives this $500 minimum for one wellness visit and basic labs each year.
  • You meet this $500 threshold for an event and submit the rest of your bills to the community. CrowdHealth negotiates discounts directly with your healthcare providers, and these “self-pay” or “cash pay” prices can be 60% less than the sticker price providers charge to insurance companies.

There are three other important differences:

  1. You don’t have to pay an annual deductible. Most insurance companies require you to meet an annual deductible before they start paying your bills. By contrast, most, if not all, health sharing / crowdfunded communities have no annual deductible obligation.
  2. You have less paperwork. Most health sharing / crowdfunded communities, CrowdHealth included, take a digital-first approach. You take photos of your bills and upload them to your online dashboard. Then, the team at your healthsharing company take over.

You’ll also get some other major benefits, including telehealth. Sometimes, you’ll find it more convenient to talk to a doctor and renew a prescription rather than haul your aching self into the reception area of an urgent care clinic.

My family of 5 switched to health sharing over nine years ago. Since then, my wife and I have been through two births—at least, she has—a broken arm, two surgeries, emergency room visits, MRIs, allergy shots, and a disability diagnosis. We’ve saved over $60,000 in out-of-pocket costs without sacrificing our quality of care. That’s enough for a deposit on a house in Knoxville!

If you decide you want to give CrowdHealth a try, you can use promo code FREELANCECAKE during sign-up to get 3 months for $99.


What’s the cost of health insurance for freelancers?

On average, individuals aged 25-40 can expect to pay $350 to $500 per month. Actual costs depend on personal circumstances (age, alcohol and tobacco use, location, insurance type, and other variables). To find the best fit, consider the factors beyond premiums, including deductibles, coinsurance, and coverage limits.

Additionally, some states have broadened their Medicaid programs. Go here to see if your state is on the list and whether or not you qualify.

How do I know I fall under the self-employed classification?

Generally, self-employed individuals are those who earn income from their own businesses or freelance work, rather than working for an employer. The self employed category can include freelance writers, consultants, and 1099 independent contractors like sales reps. To confirm your self-employed status, you may need to provide documentation such as a Schedule C tax form or a letter from your clients verifying your independent work.

Can I write off healthcare costs?

You may be eligible to deduct certain healthcare costs as business expenses on your tax return. Some common healthcare expenses that may be deductible for freelancers include premiums for health, dental, and vision insurance, as well as copays, prescriptions, and other out-of-pocket expenses. That said, I am not a health insurance or a tax professional, so it's important to consult with a CPA to ensure you take advantage of all the deductions you’re eligible for and properly document your expenses throughout the year.

Closing thoughts on healthcare for freelancers

Uber looked at taxicabs and said, “We can do better than that.” Crowdfunded healthcare startups are doing the same thing with health insurance.

So like I said, go educate yourself. Explore a variety of health insurance options. Explore crowdfunded healthcare too. Who knows… maybe the mountain between you and the work and lifestyle you really want is more the size of a molehill.

This post may contain affiliate links. Please read my disclosure for more info

Austin L Church portrait photo.

About the Author,
Austin L. Church

Austin L. Church is a writer, brand consultant, and freelance coach. He started freelancing in 2009 after finishing his M.A. in Literature and getting laid off from a marketing agency. Freelancing led to mobile apps (Bright Newt), a tech startup (, a children's book (Grabbling), and a branding studio (Balernum). Austin loves teaching freelancers and consultants how to stack up specific advantages for more income, free time, and fun. He and his wife live with their three children in Knoxville, Tennessee.


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