Being self-employed has many benefits. However, affordable health insurance is not one of them. Health insurance costs can easily eat up any profits you make while working for yourself if you are not careful. Here we discuss the top ways to lower those costs to make them affordable for you.
Take a High Deductible Healthcare Plan
In general, the higher the deductible on your insurance, the lower premium you pay. If you don’t go to the doctor often, it could pay off in the end. Keep in mind, a high deductible could mean several thousand dollars.
The good news is that high deductible plans still cover routine and preventative care just like a standard insurance policy would. Generally, you don’t pay anything for routine visits. It’s the emergency or sick visits that you’ll have to pay for in the end. If the issues are serious enough, though, once you meet your deductible, the insurance will start covering your medical costs.
You should determine how much you can comfortably afford not only for the monthly premium, but also in the face of an emergency. This will help you choose the right plan for yourself.
Take Advantage of Premium Tax Credits
If you apply for insurance through the Marketplace, make sure you apply for premium tax credits. You’ll have to complete the questionnaire on the Healthcare.gov website to determine if you qualify. If you do, you can use the tax credits towards your monthly premiums to make them more affordable. Luckily, the Marketplace pays the insurance company directly, so you realize the savings right away each month.
Shop Around for Lower Health Insurance Costs
Just like any other type of insurance, each company charges a different premium. Not only should you use the Marketplace to comparison shop, but you should also look around yourself. Make sure you ask about different plans; don’t focus solely on PPO plans.
When you compare health insurance costs, though, make sure you compare apples to apples. For instance, don’t compare a policy with a $1,000 deductible to a policy with a $10,000 deductible. The premiums would obviously be very different. The $10,000 deductible would have a much lower premium, making you think it’s much more affordable. However, should you ever need to use the insurance, you could be in big trouble if you can’t meet the $10,000 deductible. Comparing apples to apples will help you ensure that you make the choice you can afford.
Write Off Your Health Insurance Premiums
You may also be able to write off your health insurance premiums on your tax returns this year. Any premiums you pay for medical, dental, or long-term care can be deducted. This is true even if you are not going to itemize your deductions this year. You get to take the amount right off your income, which instantly lowers your taxable income and your tax liability.
Health insurance costs are high for anyone, but for the self-employed they can skyrocket. Make sure you take your time in choosing your policy. Be careful, though, don’t be without insurance or you’ll pay a hefty penalty on your taxes.