Self-Employment in the Gig Economy: I am an ACA Success Story

Like many people in the 21st century, self-employment wasn’t something I sought out. It found me. In 2006, I was in a dead-end job that I’d been looking to leave for about a year. An excellent opportunity presented itself early in January. It had everything I had been looking for: opportunities for growth, more responsibility, better pay, annual bonuses and the chance to work from home several days a week. The catch: the company was based offshore, and I was being hired as an independent contractor. Thus began my official journey into the gig economy.

I’d never purchased my own health insurance before that. I was only 35, and I’d been lucky enough to have employer-based healthcare coverage up to that point (with modest gaps in between). A good friend of mine was an insurance broker, so I called his agency. What he told me was a little surprising: even in California (I lived in L.A.), I had basically one choice for a carrier that offered major medical to individuals; all other insurers in California only offered group plans, save Blue Cross/Blue Shield. I signed up for an Anthem Blue Cross plan, which, in 2006, cost about $250/month. The deductible was $10,000 annually, and my out of pocket for hospitalization was 20% after the deductible.

Premiums: Yes, They Skyrocketed Before Obamacare

My premium, predictably, increased year over year for the three years. At the beginning of 2008, I got an email informing me that my rates were about to jump to over $400/month. I called Blue Cross and they explained that because I was 37, I had entered into a “high-risk” pool for maternity.

“I have no plans to get pregnant,” I said.

“We can cancel your maternity coverage,” the customer support employee told me.

“If I do get pregnant, what do I do?”

“You won’t have any coverage for maternity going forward.”

I did cancel the coverage because I was single, engrossed in my career, and had no plans to have a child. To be clear: if at any point, under that coverage scenario, had I gotten pregnant, all of my expenses would have been paid out of pocket. I had to cancel the coverage solely to keep my premiums affordable, and this was some 5 years before the ACA was enacted. In effect: this means that pregnancy was, quite literally, considered a pre-existing condition for which I could not be covered in the future under my self-purchased insurance plan.

For a brief period starting in 2009, I did have employer-based coverage. The out-of-pocket benefits were better, and the premiums were about the same. By that point, my Anthem plan cost about $325/month. I’d moved onto another job, and they did bring me on as an employee. As a small company, however, they could only cover 50% of my monthly premium. So, my $680 plan through Aetna (who did not offer individual plans at all at the time) would only cost me $340. I jumped on the opportunity.

When I was Denied Coverage for Being Healthy

In 2010, when that startup failed to get a round of funding, it shut its doors and I was suddenly without work or insurance. This isn’t unusual when you work for small businesses and startups, as I do. I’m far from alone. A 2015 Slate article, citing Intuit data, states that as many as 40% of the American workforce will be working as independent contractors by 2020. For those of us who work from gig to gig, we rarely expect the work to be stable, or last long.

When I got laid off, I once again went back to Anthem Blue Cross to pick up an individual insurance plan. I got on the phone with a helpful customer support agent. At that time, signing up for insurance meant spending about two hours on the phone, answering detailed questions about your medical history. Before the ACA, insurance company actuaries determined your rates based on the amount of risk you posed.

After about an hour of answering various questions about my health, I answered “yes” to the question, “Have you had an irregular pap smear in the past 12 months?”

“Um…I’m sorry,” the agent said, “but my computer is telling me that we can’t cover you.”

“For an irregular pap?” I said, just to clarify what I was hearing.

“Uh…yeah. It’s saying that you have to get two normal pelvic exams in the next 18 months before we can consider covering you again.”

All Women are Abnormal At Least Once

My abnormal pap was anything but uncommon. In fact, it’s quite the opposite. Only a couple of months prior, I’d tested positive for a few pre-cancerous HPV cells. HPV, the leading cause of cervical cancer, is the most common STD in America. More than two in five adults carry it. The treatment I received is equally common. The CDC estimates that 80 percent of sexually active women will become infected at some point in their lives.

According to the Center for Disease Control (CDC), some 3.5 to 5 million women annually have pap smears that require further treatment and/or testing. A common and statistically successful treatment in that scenario is cryo treatment, where a doctor freezes the cancerous cells to prevent them from spreading. I had that treatment, and was immediately rendered perfectly healthy. I never gave the procedure a second thought until it was the very reason I was being turned down for insurance.

It’s worth mentioning that before I ended the call with the insurance agent, who was also a woman, was distraught.

“I don’t understand why we can’t cover you,” she said, sounding just as confused and emotionally frustrated as I was. “I mean, you got the treatment. You won’t get cancer now. That’s the whole point of an exam, right?”

While I had her sympathy, there was nothing she could do to help me. I couldn’t get coverage. Despite the massive, statistical commonality of my diagnosis and successful treatment, just like that, I became of the one of the seven million Americans deemed uninsurable by the sole carrier in my state who offered major medical coverage to individuals. In 2011, according to the PEW Charitable Trust, there were over a quarter of a million, or 226,615 people insured in so-called “high-risk” pools in the 35 states that offered them. California was one of them. I knew from other stories from friends with preexisting conditions that I’d never be able to afford our state’s high-risk coverage insurance. One friend alone, who was close to my age and had suffered a terrible infection that year, told me that she was quoted $900/month for coverage after Blue Cross denied her coverage.

I did what I could to ensure that I’d get coverage as soon as possible. I got a pelvic exam with normal results within one week of the call, and was grateful that there was a local Planned Parenthood who could provide me an exam at no cost, saving me about $200 for the procedure. (The follow-up exam after my cryo treatment, incidentally, yielded the same results, but the insurance company still required two additional exams within the 18-month timeframe.)

Obamacare Restored my Coverage Instantly

I never had to get that second exam. Remember, this was in 2010. As soon as the ACA was enacted that year, I was suddenly eligible for insurance. Because the ACA protected me from being discriminated against by a carrier based on any pre-existing conditions, I could pick a plan based on the amount of coverage my soon-to-be husband and I wanted and could afford during open enrollment during the fall of 2010. I could continue to receive well-woman exams with no cost out of pocket, as was guaranteed as a part of the law.

Signing up for healthcare that year was a relief to anyone who was used to the pre-ACA environment: there were four carriers to choose from, no one asked me any information about my health history, and the entire sign up process took about 30 minutes. Also: the benefits were so much better for the money. My annual deductible went down to $5,000/year (remember: it used to be $10,000) and my co-insurance responsibility dropped to 10%, meaning that my hospitalization costs would be half of what they would have been under my old plan. What’s more: my premiums were about the same. Since we signed up for the exchange in 2011, I’ve never been offered employer-based health. I’ve had steady work as a consultant, but not ever as a full-time employee, let alone with health insurance benefits. The ACA is far from perfect, but it was a game-changer for us 1099 people.

Surviving the Unthinkable

In 2014, my husband and I got married. He, like me, is a gig economy person. He worked as a line cook in restaurants for years and when he relocated to Los Angeles, he started picking up work as a freelance video editor. But, by the spring of 2015, we knew something was wrong. He’d developed a persistent, stubborn, and untreatable cough. It wasn’t normal. He went to the doctor to kick off what’s been the most painful and arduous journey of both of our lives.

It took the better part of a year to get a diagnosis. By the fall of 2016, we knew that he had a disease called pulmonary fibrosis. At some point several years earlier, unbeknownst to him, he may have gotten an infection that led to the unstoppable spread of scar tissue in his lungs. The disease has limited treatment options. He will, for the foreseeable future, use oxygen when he does something as routine as walk up a flight of stairs or go to the grocery store.

The Important Role of Special Enrollment Periods

In the middle of 2016, we moved back to St. Louis to be close to family and to reduce our cost of living, mostly in response to my husband’s failing health. When we got to town, I was able to sign up for ACA-based insurance coverage even though open enrollment had ended, because we qualified for what’s called a special enrollment period, or SEP. (Moving to a new state automatically qualifies individuals for a SEP.) I found a new insurance agent, who was able to walk me through the ACA marketplace (living in California, we had been using CA’s state marketplace before that).

“What’s your income?” my agent asked. Because we’re down to a single income (my husband’s condition makes his getting a job out of the question), we are living on what amounts to a modest income. When I sent the agent our previous year’s tax returns, he said, “Well, I don’t know what kind of subsidies you were getting in L.A., but your out of pocket is going to be pretty cheap because you qualify.”

No one ever plans on getting sick. We’d exhausted our savings when my husband was out of work for the year before. Like most Americans, especially workers like me who work from job to job, supporting a sick spouse is something you can’t plan for enough. We never dreamed we’d be living solely on my income alone.

Because of the subsidies, we are able to afford pulmonary therapy. We can comfortably see his doctors as much as he needs. We were able to afford the surgical diagnostic procedures and regular testing he needs to monitor his condition. We can afford the rent on the oxygen equipment he needs to use at home to function (and to prevent further damage to other vital organs). We were even able to move his care to Washington University Medical Center, which has one of the best pulmonary centers in the country. To be clear: all of this is possible because of the ACA.

In October, we got more difficult news: my husband’s lung function had deteriorated so much, he needed to be evaluated for a lung transplant. There’s no easy way to process devastating news like that, especially for two relatively young people (he was only 44). I distinctly remember turning to him in the days leading up to his evaluation, and saying these exact words:

“Well, at least we don’t have to worry about our healthcare coverage.”

This was the only light at the end of a very dark tunnel. To say that it led our way through some truly bleak moments is an understatement. Nothing makes illness easy: knowing that you have the privilege of seeking treatment, knowing that he’d never be kicked off the insurance roles because of his condition, was literally what allowed me to sleep at night.

We were told on November 1, after a grueling two-day testing and evaluation schedule, that transplant was off the table for now. We received that news with a mix of gratitude and anxiety.

“We’re going to have to monitor this closely,” the senior doctor at the transplant center told us. “We’ll do everything we can to keep you healthy, but it’s not going to be easy.” The drive home from the hospital that evening was one of the hardest I would ever make.

A $97,000 Drug and Living with Lung Disease in An Uncertain Future

One week later, Hillary Clinton lost her bid to become president to Donald J. Trump and Paul Ryan’s led House of Representatives started beating the war drum to repeal the ACA. Missouri Senator Roy Blunt has been gunning for ACA repeal along with his GOP colleagues in the Senate since its passage. Despite being called out for citing data that simply does not exist, Blunt has never changed his mind.

Not long after Trump’s inauguration, my husband started drug therapy. His medication will not in any way cure his condition, but it could prevent the disease from further damaging his lungs. His doctors’ stated goals are to put off lung transplant for as long as possible, so this drug therapy is crucial. Without insurance coverage, the out-of-pocket costs for this single drug is $97,000 per year. Even with coverage, the copay would have been as high as $24,000 per year. We do qualify for a copayment program, a partnership between our insurer’s mail-order pharmacy and the pharmaceutical company, so our monthly expense for the drug is currently $5.

Without the language of the ACA and the structure of the marketplace, I fear for my husband’s long-term health. I fear that we will not be able to afford the medication which costs more than I’ve ever earned in a single year. Since my self-employment status isn’t going to change anytime soon, our fate mostly sits in the lap of congressional Republicans who want to gut and dismantle Barack Obama’s signature legislative achievement.

The ACA and the Gig Economy

The U.S. is continuing its momentum towards a self-employment-based economy. In 2015, a report from the Global Entrepreneurship Monitor (GEM) estimated that 27 million working Americans, roughly 14 percent of the workforce, are self-defined as entrepreneurs. Only 24% of those individuals plan on hiring 20 or more people in the next five years. Per Donna Kelly, leader of GEM U.S., the majority of those single-founders will rarely hire another worker.

I am a huge proponent of self-employment. I love the flexibility, the variety, and the exposure I get to other industries. This month alone, I’ve worked for a company creating an AI engine for e-commerce marketing and a vocational nursing school. For me, self-employment has always been an exciting adventure. I love what I do.

The ACA can be improved, but it is the single piece of legislation passed within my adult life that takes into account the nature of being self-employed and the modern reality of entrepreneurs. Most of us do not need to hire other employees. We can make due with working with other contractors when we need services that we can’t fulfill for our clients. Insurers did not address this growing population effectively until the ACA. My insurance journey is not unusual. In fact, it’s probably more common than most people who are either too young to have purchased insurance before the ACA existed or who have enjoyed the relative stability of employer-based insurance realize.

The reality of self-employment, regardless of the fate of the ACA, isn’t likely to change any time soon. Software giant Adobe found in a recent survey of office workers that as many as 56 percent of those surveyed will support themselves via multiple freelance jobs in the future. Even if someone like me wanted to return to the full-time workforce, it’s not a guarantee that I’d receive employer-based benefits or the kind of benefits that would extend in any material way to my husband.

Individual Plans are the New Normal

Employer-based spousal insurance coverage is shrinking, and this is unlikely solely due to the ACA. For years, employer-based insurance benefits have been decreasing and companies have been shifting the rising costs of insurance onto their workers. In what universe, in this century, will I be able to shop for a job solely based on the need for health insurance and hope that said insurance will cover my husband adequately?

Also, there’s the issue of hiring trends to consider. Since the 1970s, according to the Bureau of Labor Statistics, part-time jobs have been steadily increasing. According to a 1989 report, this trend started in large part because manufacturing jobs were being replaced by jobs in the service sector. Today, 6.6 million Americans work part-time jobs despite looking for full-time work. Census Bureau data from 2012 still estimated that there are 27.9 million uninsured workers in America, with nearly half, or 46% of those same workers being employed at companies with 50 or more employees. The ACA could go further to reduce the cost of care to those part-time employees, but the question remains: without the ACA, how will any of those workers afford any insurance at all?

If House Speaker Paul Ryan, President Trump, and Senate Majority Leader Mitch McConnell have their way, that is a question that we will have to address. This week, the house passed the AHCA, their effort (that failed in March to reach the House floor) to repeal and replace the ACA. This new law has failed to deliver Trump’s promise to broaden coverage to more people at lower costs, and this is during a time when Obamacare is increasingly popular. Whether Republican leadership is staging political theater to appease their base and in response to a new GOP president’s populist campaign promises, or they are sincere in their hopes to deny over 24 million Americans health insurance, the results would be the same in the face of repeal.

The results of repeal would be the same for those Americans who work full-time and part-time for employers that do not offer them benefits. The impact would be the same for self-employed people like me. The results will be the same for my husband who is facing an uncertain and scary future, with or without healthcare coverage. A future without the ACA, and without a single-payer, Medicare-for-all system, is, no uncertain terms, dire for most of us. In an uncertain healthcare future, of that, we can be sure.

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