Tens of millions of people are currently going without health insurance coverage. The reasons are pretty simple: either they can’t afford the high cost of premiums, or they have been declined coverage due to pre-existing conditions.
The Affordable Care Act, more commonly known as Obamacare, looks ready to fix the pre-existing condition problem. Under the plan, not only will insurance companies not be able to turn you away for pre-existing conditions, but they will be unable charge you a higher premium either.
So far, so good.
[Find out how to save money on prescriptions.]What Obamacare Won’t Fix
There is a lot in the President’s plan that I really like, starting with the elimination of pre-existing conditions as a factor in health insurance coverage. That needed to happen a long, long time ago. And you can’t argue with a concerted attempt to get everybody covered.
What is not as certain however is how much all this is going to cost. The current consensus is that young, healthy people will be paying more than they were under the old system, while older and less healthy customers will pay less. If I had to bet money on this plan, I‘d have no trouble betting that premiums are going still higher.
It’s hard to imagine how 100% coverage on preventative care, mandating coverage, and providing health insurance for 50 million people who currently don’t have it, is going to lower premiums. Add to that the fact that health insurance premiums have been going up for years, and there is no solid evidence that this cycle will change.
So just by making an educated guess, I think it’s pretty safe to say that higher premiums are something that Obamacare will not fix.
And that creates one not-so-small small problem…
You Will Now Be Required To Have Health Insurance
Under the new law, you will be required to have health insurance, otherwise you will have to pay a penalty. For 2014, the penalty is so low you pay it and get on with your life. The higher of $95 or 1% of your gross income is still a heck of a lot cheaper than even an inexpensive health insurance plan.
But as the years pass, those penalties become increasingly stiff. You’ll be paying a substantial penalty, but not having any health insurance coverage to show for it. Effectively, that will force you to have health insurance whether you want it or not.
If doing without health insurance has been your strategy for dealing with unaffordable premiums, it looks like that option is about to go out the window. And that raises the question How will we be able to afford that which we can no longer avoid?
Creating A Side Business To Pay For Health Insurance
I’ve heard horror story projections about Obamacare – we all have – but my feeling for a long time has been that the present health care system is already broken, and we should embrace this change. It does have a lot of positives, but we have to deal with the reality of figuring out how we are going to be able to afford it.
My suggestion is to create a dedicated income stream to pay for your health insurance. With premiums expected to be anywhere from $250-$300 for young individuals, and well over $1,000 for families, it is very possible that health insurance will be the single most expensive line-item in many household budgets. That will require some extraordinary measures to deal with.
[Should you let your employer know about your side business?]Since you’ll need your regular income just to pay living expenses, the best strategy may be to develop a side business that will be used primarily to pay for health insurance. Here are my suggestions for just such a business. Each should be able to provide you with at least a few hundred dollars per month, and maybe a lot more. One of them may be the best solution to mandatory health insurance.
This is just a list to get you started – you probably have skills and interests that would make your own choice of a side business obvious. Now is an excellent time to dust off any ideas you have, and put them in the practice.
Freelancing On The Web. If you are comfortable with computers and the Internet you may be able to sell your services to websites and blogs. The possibilities here are nearly endless – content writing, social media management, editing, technical assistance, business development – you name it. Figure out what it is that you can do better than most people, put together a concise resume (or build your own website), then begin contacting site owners directly to hawk your service.
Tutoring. Where I live, people who tutor high school students are getting at least $30 an hour. Pick a subject that you are strong in, and offer your services as a tutor. Make up a simple brochure and provide a small supply to each of the schools in your area. You can also advertise your services on Craigslist, or place flyers in grocery stores, churches, Laundromats, or even the bulletin board at work.
Selling A Product. Is there a product that you feel very strongly about? Your enthusiasm and conviction may be your best tools to sell the product. Many companies offer affiliate programs that you can work through. You sell the company’s product, and collect a percentage commission upon each sale. You can automate the whole process by creating a website, and selling the product online.
Applying A Specific Skill You Have. Inventory all of your skills, there may be one or two that you can convert into a business. For example, if you have bookkeeping skills, offer your services out to small businesses. If you have fitness skills, you may be able to teach in a gym. This can include Zumba, yoga, aerobics, or even personal training. Think about the skills that you have, and the businesses were those skills might be useful.
[Find out how to discover the right business for you.]Starting a side business is often a matter of matching your skills with a corresponding market niche. Spend some time working on that – surf the web looking for ideas and markets, join networking groups, and talk with your friends. As a rule, a side business will provide far more compensation than a part-time job will. And that may enable you to afford health insurance coverage that you otherwise can’t.
What are your own plans to deal with healthcare reform and higher, mandatory premiums?
