Craft Emergency Relief Fund » Issue 18: February 2008

Issue 18: February 2008

SPECIAL REPORT: HEALTH INSURANCE

A Useable Guide to Getting Yourself Covered, While We All Work Toward a Better System

When furniture maker Mark Del Guidice fell last summer, tearing ligaments in his right elbow, CERF+ was able to provide financial assistance so he could hire help to keep his business going until he was able to make furniture again. Fortunately, Mark has a good health insurance plan, so the impacts of his inability to work were not worsened by major medical expenses. Today, Mark sees his health insurance as an essential part of his business.

"It’s my only safety net," Mark says. "Taking care of my health needs enables me to keep working at my craft."

People without health insurance tend to "live sicker and die earlier," according to The Institute of Medicine. CERF+’s 2004 national survey found that 18% of craft artists do not have health insurance, a figure that is remarkably close to the 16.4% of all Americans who were without health insurance in 2005, according to the Centers for Disease Control. Health insurance in the U.S. has traditionally been tied to employment, so it is hardly surprising that the self-employed and working poor have a higher likelihood of going without coverage.

According to the Washington Artists Health Insurance Project (WAHIP), the most serious barriers to health insurance for artists who do not have access to employer-based plans are:

lack of access to affordable plans that provide adequate health coverage;

lack of insurance portability (limits on keeping a plan you had through an employer when you leave a job); and

lack of information needed to make informed decisions in a complex marketplace.

"You are inevitably going to have to spend some money," says Claudia Bach, an arts consultant who has worked with Artist Trust on WAHIP. "Health care and health insurance are not cheap, and self-employed professionals hold the responsibility for taking care of these critical needs." Unrealistic expectations, she adds, can get in the way of a constructive solution.

If you think you can handle the cost of health care without insurance, you’d be wise to think again. Report cards for most hospitals, including what they charge for a variety of medical procedures, are available (some, but not all, are free) from Health Grades (www.healthgrades.com). One hospital reported average charges of $42,122 for a heart attack and $17,517 for pneumonia.

Waiting to buy health insurance until you have a health problem is like waiting to buy fire insurance until after your house burns down. It’s not a good plan!

Fifty States: The Good, The Bad…

Looking at the landscape of states, the bad news is that health care in the U.S. is governed by a crazy quilt of state regulations. Not only does this confound the efforts of national organizations to put together group insurance plans; it also makes it challenging to explain insurance regulations in a coherent manner. The good news is that in the absence of serious action by the federal government to create a system of affordable health care, states are experimenting with different ways to make health insurance more readily available. Low-income individuals and employees of small businesses are among the groups targeted by some of these initiatives.

For instance, Tennessee recently enacted a promising plan aimed at small business workers, owners and their families. The plan, CoverTN, provides basic health coverage with limits in a partnership between the business, the employee and the state: each pays one third of the monthly premium. Eligibility requirements include the restriction that 50% of all employees must earn less than $43,000 per year. A self-employed person working alone would have to pay both the employer and employee portions of the premium.

Each CoverTN policy is portable – it is owned by the individual and can be kept even if he or she leaves the current job. Tennessee Governor Phil Bredesen describes the program as a "reasonable first step" to offering affordable health coverage to citizens who are falling through the cracks. Other states are similarly testing the waters, a step at a time.

While most states have restrictions on how long pre-existing health conditions can be exempted from coverage under a group health insurance plan, it can be problematic for people with health conditions such as AIDS, cancer, diabetes – or even lesser risks – to purchase individual health insurance in many states. About 30 states have created high-risk pools to provide insurance to individuals who have been refused coverage. The premiums are typically 1.5 to 2 times higher than those charged by private insurance companies. In some states, individual artists may qualify for small business insurance, while in others there must be two or more employees for such plans.

Low-income individuals and families in any state may be eligible for free, low-cost or subsidized coverage under state-administered Medicaid or state-specific programs. Federal and state governments jointly fund these programs, and the qualifications and regulations vary state-to-state.

The Georgetown University Health Policy Institute has prepared a comprehensive Consumer’s Guide to Getting and Keeping Health Insurance Coverage for each state. This essential guide can be downloaded free from www.HealthInsuranceInfo.net. Each booklet outlines protections available to citizens of the state (and limits to those protections); the types of plans available in the state; state-sponsored plans; frequently asked questions; a glossary of terms; and additional sources of information.

Another useful guide, The Health Care Matrix™ from the Foundation for Health Coverage Education, gives an at-a-glance view of the insurance programs for the selected state. This "cheat sheet" view is handy, especially in combination with the more comprehensive guide from the Georgetown University Health Policy Institute.

CERF+’s partner in the Coalition for Artists’ Preparedness and Emergency Response, The Actors Fund, has devoted considerable resources to health care for artists and has laid down a "trail of breadcrumbs" to help artists navigate the system. Their "Access to Health Insurance/Resources for Care" website is a growing database of health care resources for artists organized by state.

Also, Getting and Keeping Health Insurance by Jim Brown, director of health services for The Actors Fund, is a valuable guide to health insurance resources on the web. The article is posted on CERF+’s website.

All of these guides are trying to keep up with moving targets. It is a good idea to try to stay abreast of new developments in health care programs and regulations in your state. To get the latest information, check out your state’s official website, or call the state insurance commissioner’s office.

…and The Ugly

As small business operators, craft artists frequently get calls from salespeople hustling health insurance plans for small businesses. While some of these salespeople and their plans may be legitimate, many others misrepresent products of dubious or no value to prey on self-employed workers, who may be desperate for affordable health insurance.

These companies often represent themselvesas business associations or have names that sound familiar, such as variations on well-known mutual fund company names. The old adage, "If it sounds too good to be true, it probably is," applies in spades in the health insurance arena. Your best defenses are knowledge and a healthy dose of skepticism.

Do not purchase anything without first checking it out with your state insurance commission. Any legitimate health insurance company selling insurance in your state must be licensed by your state. Some states even post "report cards" for companies selling insurance in that state.

The National Association of Insurance Commissioners (NAIC) consumer website, has links to each state insurance commissioner’s office, an online tool to check out the complaint rates of specific companies, and helpful tips on buying insurance.

Comparison Shopping

There are many ways a health plan can be configured – by varying the deductible amount, copays for doctors office visits, coinsurance (the percentage you pay after the deductible has been reached), and the out-of-pocket limit (the amount you have to spend before insurance kicks in at 100%). A good way to get ballpark figures on different health plans is to search an online broker such as www.ehealthinsurance.com.

One way to lower premiums is to opt for a high-deductible health plan (HDHP), and establish a Health Savings Account (HSA). Contributions to an HSA of up to $2,900 for an individual or $5,800 for a family are untaxed, provided the money is used only for "qualified" medical expenses. This includes everything that would normally be tax-deductible. The major exclusions are cosmetic procedures. Unused funds roll over from year to year.

To qualify for an HSA in 2008, you need an HSA-qualified health care plan with a deductible of at least $1,100 for an individual and $2,200 for a family. Once you reach age 65, you can continue to use the account for expenses not covered by Medicare, or you can withdraw money from the account subject to income tax.

Complete information on HSAs is available on the U.S. Treasury website. Online health insurance instant quotes for HSA-eligible plans are available at www.hsainsider.com.

The Keys: Learn & Persevere

We can all hope for meaningful reform of the health care system, contribute to the debate, and make intelligent decisions at the ballot box. In the meantime, our greatest assets are perseverance and knowledge. The former is something most artists already possess, and the latter is one they are accustomed to acquiring.

"Artists are creative problem solvers," says Claudia Bach. "And that creativity must be put to work in crafting a workable health care plan for themselves."

Don’t Wait for Reform – Work for It!

Artists can help by becoming better-informed citizens and by actively supporting reform. Here are a few of the organizations who are working for change in the health care system. More are listed on the CERF+ website.

HealthCentral graphs presidential candidates’ positions on health care issues, and has links to campaign position papers.

The Institute of Medicine has published Insuring America’s Health: Principles and Recommendatons. It can be read online or ordered from their website.

Families USA advocates for health care reform with an emphasis on childrens’ and family health care.

Physicians for a National Health Program advocates a national single-payer health plan.

Universal Health Care Action Network works for universal health care coverage. Their site has links to state and local organizations committed to a similar approach.