There is significant controversy surrounding the issue of healthcare reform. Much of it centers around the political process and its implications. Having lost their filibuster-proof Senate majority, Democrats are looking to pass the bill through a convoluted and little-known legislative process known as reconciliation. It allows them to fix budget-related provisions to the House of Representatives’ liking, without requiring a single Republican vote. The minority party is understandably dismayed at the partisanship, and are warning Democrats of the negative impact it will have on their re-election prospects this fall. Due to all of this political wrangling, the actual substance of the bill has fallen by the wayside.
A growing demographic that may benefit from affordable health insurance reform is the self-employed. Whether by choice or circumstance, millions of Americans are now working for themselves and freelancing. Self employment offers far more freedom and flexibility than working for a company. The downside is that it does not come with benefits. Therefore, self employed individuals are usually responsible for buying their own health insurance.
In a handful of states, self employed individuals are considered a “group of one” and allowed to purchase group health insurance, which is often less expensive and less restrictive in terms of eligibility. Currently, the rest of them must make do in the individual health insurance market. The situation is not ideal for those who are self-employed with pre-existing conditions. Most health insurance plans won’t take them, because they are not considered profitable enough. If they are accepted, the guaranteed issue insurance plans they qualify for often come with very expensive premiums.
Healthcare reform seeks to change all that. Immediately after passage, health insurance companies would no longer be allowed to deny coverage based on an applicant’s health status. With the exception of fraud, insurers will no longer be allowed to cancel an existing policy, either. Further changes will take effect in 2014. The most important among them is the establishment of a health insurance exchange market: a national exchange of insurance options with various coverage and pricing options. The federal government will have more power to regulate these individual health insurance plans because it will fully or partially subsidize their purchase. Insurers will create plans that qualify for inclusion in order to take advantage of the increased revenue from millions of new customers.
As for the subsidies, they will be given to millions of eligible lower- and middle-income Americans in the form of tax credits. This will allow them to fulfill the health insurance mandate with a lower burden on their income. Self-employed individuals and families with higher incomes will see less benefit from that aspect of reform. However, they will still be allowed to participate in the exchanges, which are based on the health benefits system used by Congress and other federal employees.
