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Finance Tips for the Self-Employed

About 57 percent of U.S. citizens have health insurance through their employer and 29 percent get health insurance through a government plan, such as the military, Medicare or Medicaid. That leaves 14% of Americans without health insurance because they feel they can’t afford it, or are self-employed and can’t find individual health insurance plans. Some of the self-employed think they can’t afford coverage, and some have a hard time finding a policy because of pre-existing conditions.

Group and individual health care coverage

It can be more difficult to find individual health insurance plans than it is to get insurance in a group plan offered by an employer. When an individual applies for health insurance, that person’s medical history is examined closely whereas in a group setting, an insurance company may not look as closely at a person’s medical history.

If a person has a pre-existing condition, a health insurance company may not insure that person at all or may attach a rider to the policy stating that it won’t cover incidents related to the pre-existing condition. If at all possible, it can be better for a person to purchase health insurance before he develops a chronic health condition.

Shopping for an individual plan

When applying for individual health insurance plans, be sure to disclose any health issues. It’s also important to purchase only as much coverage as you think you’ll need, in order to avoid paying expensive monthly rates. Determine what insurance policy best suits your individual needs, and be sure to re-evaluate those needs when your marital status changes, or if you have or adopt a child.

If an individual needs health insurance and can’t afford it, or is having a problem finding insurance because of a pre-existing condition, a spouse could take a job with a company that offers health insurance benefits. The self-employed individual may still have a rider on the policy for pre-existing conditions, but he or she will still have health care coverage at a lower monthly rate.

An individual who is self-employed or unemployed has several choices of individual health insurance plans to choose from. An HMO is the most affordable option, but it can have constricting rules, such as using only doctors in its network. An individual’s doctor may not be a member of an HMO, and this could require someone to change doctors.

PPO plans also offer individual health insurance plans. With a PPO, an individual could choose any health care provider. An HSA, or health savings plan, often has a high deductible but reasonable premiums. It is also a tax-free savings account that an individual could use to save money for routine doctors’ visits and other medical expenses. A fee for service plan, or FFS plan, allows an individual to get the care he or she needs, then reimburses the individual for a percentage of the cost of the medical care.

When choosing a health care coverage plan, choose what works best for you and your health. The right insurance plan could save you money when you need it most.

This post is a guest post written by Ashley Spade, a law student in Chicago. In addition to learning how to live life on a grad student budget, Ashley spends her time training for triathlons and hanging out with her sidekick, Sir Winston Pugsalot (a rather mischievous pug). Follow her adventures on twitter @ashspade

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