The Biggest Health Coverage Concern for Self-Employed Individuals: Cost & Affordability
When you’re self-employed, your business depends on you—your time, your energy, and most of all, your health. But ironically, one of the biggest challenges for self-employed individuals is finding health coverage that doesn’t break the bank. Without access to an employer-sponsored plan, you’re left to navigate a sea of options, often at a premium price.
Let’s break down why health coverage is so costly for self-employed individuals, what options are out there, and how you can find a solution that protects both your health and your finances.
Why Is Health Coverage So Expensive When You're Self-Employed?
When you work for a company, they typically cover a significant portion of your health insurance premiums—sometimes up to 75% or more. As a self-employed person or small business owner, you’re responsible for 100% of that cost. For many, this creates an immediate barrier to quality coverage.
According to the Kaiser Family Foundation, the average employer-sponsored health plan cost per individual in 2023 was about $7,590 per year—with employers covering around $6,500 of that. If you’re self-employed, you’re covering that full amount on your own, and in many cases, your cost can be even higher due to fewer group benefits or less negotiation power with carriers.
And that’s just the premium. When you add in deductibles, copays, prescriptions, and out-of-pocket maximums, the total cost of staying healthy can become overwhelming—especially when you’re also managing taxes, business expenses, and a variable income.
What Are My Options?
Thankfully, self-employed individuals are not out of luck when it comes to getting covered. There are several paths you can take, depending on your income level, health needs, and whether you qualify for subsidies or special plans. Here’s a quick overview:
1. Marketplace Plans (ACA-Compliant)
These plans are available through the federal or state marketplaces and include essential health benefits like preventive care, prescriptions, and mental health services. If your income qualifies, you may receive premium tax credits or cost-sharing reductions.
Pros:
Guaranteed coverage regardless of pre-existing conditions
Subsidies can significantly reduce your monthly premium
Broad range of plan options
Cons:
Without subsidies, these plans can be pricey
Limited flexibility in provider networks
High deductibles depending on the plan tier
2. Private Health Plans
There are private coverage options outside the marketplace that can be customized to your specific needs. These are ideal for people who don’t qualify for subsidies but still want affordable monthly premiums or more flexible benefits.
Pros:
Often lower premiums
More customizable to fit your lifestyle and health needs
May include access to national networks
Cons:
Not all plans include all essential benefits
Pre-existing conditions may affect eligibility or pricing
3. Health Sharing Programs
Health sharing ministries and other similar programs are not technically insurance, but they do help cover medical expenses by pooling funds among members.
Pros:
Lower monthly costs
Some offer holistic or faith-based care options
Cons:
Not regulated like traditional insurance
May have limits on what’s covered and how claims are handled
4. High-Deductible Plans + Health Savings Accounts (HSA)
Pairing a high-deductible plan with an HSA allows you to save money tax-free for future healthcare expenses.
Pros:
Lower premiums
Tax savings
Unused HSA funds roll over and grow year to year
Cons:
High out-of-pocket costs before coverage kicks in
Requires disciplined saving
What About Dental, Vision, or Supplemental Coverage?
Most marketplace or private plans don’t include dental or vision unless specifically added. These can usually be purchased as standalone policies for a small monthly fee. It’s worth considering if you want full coverage or expect to need routine care.
Additionally, supplemental policies like accident, critical illness, or hospital indemnity plans can provide cash payouts when unexpected medical events occur—helping protect your savings and business.
Can I Write Off My Health Insurance Premiums?
Yes. One of the biggest financial advantages for self-employed individuals is the ability to deduct health insurance premiums when filing taxes—even if you don’t itemize.
According to the IRS, self-employed individuals can deduct premiums paid for:
Medical coverage for themselves and their spouse
Coverage for dependents
Long-term care insurance (limits apply)
This can significantly reduce your taxable income and help offset the cost of coverage. However, it’s important to understand what qualifies and to work with a tax professional to make sure you’re getting the full benefit.
How Do I Know What’s Right for Me?
This is the part where most self-employed folks hit a wall.
With so many options and moving parts—subsidy eligibility, plan networks, provider directories, exclusions—it’s easy to feel overwhelmed. And when you're focused on running your business, you don’t have time to become an expert in healthcare regulations.
That’s where working with a licensed broker can save you time, money, and stress.
A broker works for you, not for an insurance company. They can help you:
Compare both marketplace and private plan options
Determine if you qualify for subsidies or tax credits
Find custom coverage that matches your lifestyle and income
Add affordable dental, vision, or supplemental plans
Avoid common pitfalls like surprise bills or denied claims
At Sawyer Health Solutions, we specialize in working with self-employed professionals, entrepreneurs, and small business owners. We understand that affordability isn’t just about the cheapest plan—it’s about value, protection, and peace of mind.
Final Thoughts: You Don’t Have to Figure This Out Alone
If you’re self-employed, getting covered can feel like a financial burden—but it doesn’t have to be. With the right strategy, you can protect your health, your business, and your bottom line.
We’re here to guide you every step of the way. Whether you're just getting started or looking to switch plans, let’s talk through your options. You might be surprised by what’s available—and how much you could be saving.
