You don’t need me to tell you how unaffordable health care has become in the United States. A 2018 study by the Economic Policy Institute found that the average annual cost of a family health insurance plan rose from $5,791 in 1999 to $18,142 by 2016. That’s more than triple in only 17 years.
It’s become not only a massive burden for many families, but also a barrier to leaving traditional jobs in favor of entrepreneurship and early retirement.
Whether you’re unemployed, self-employed, employed without health coverage, or aiming to retire before you’re eligible for Medicare, health insurance likely sits near the top of your list of worries. And while there are a few options for affordable medical care without health insurance, it’s risky to go without coverage.
The good news is that you’re not alone. And when millions of people find themselves in the same quandary, solutions tend to emerge.
Here are nine of those solutions for you to consider if you don’t get employer health benefits, don’t yet qualify for Medicare, and don’t like the idea of going without health insurance.
First Things First: Being Healthier Helps
Before diving into the health coverage options, one way that you can protect against rising health care costs is to improve your overall health. No one likes to hear it, but that doesn’t make it any less true. Eating healthier, exercising every day, quitting smoking, and reducing or giving up alcohol consumption leads to better health, lower medical costs, and life expectancies up to 14 years longer.
Start by quitting smoking; it has the greatest impact on longevity. It can also save you thousands of dollars per year.
As for exercise, you don’t need an expensive gym membership to get healthy. Try these home workout routines that you can do for free without equipment. And if the idea of exercising every day makes you recoil, try just walking the neighborhood for half an hour. Bring your partner, a friend, or your dog to keep you company, or listen to an audiobook.
The healthier you are, the less you’re likely to spend on health insurance and the less frequently you’ll need medical care. And it creates a positive feedback loop, according to a 2019 report by the Annual Review of Public Health: Being healthier makes you happier, and being happier reinforces your physical health.
How to Get Health Insurance Without Employer Coverage
So what options do you have for health insurance in the absence of an employer-sponsored plan?
Health coverage never seems as simple as it should be, so do your homework on these options before committing. Watch out for not only deductible costs, but also prescription drug coverage, exclusions, copays, and maximum annual expenditures.
1. Get Covered Through Your Spouse’s Employer Plan
I’m self-employed, and I’m fortunate enough to have a wife with employer-sponsored health insurance that covers me. In fact, the stability and benefits of my wife’s job are precisely what allow for my irregular self-employed income. I can pursue higher-risk, higher-reward income and investments, focusing on building our net worth, because her job reliably puts food on the table.
It’s a model many couples follow, with one partner providing for the staples while the other contributes in alternative ways. That could mean raising the children and managing the household, starting a business, or managing investments. My stepmother hasn’t worked in 25 years, but she’s a shrewd stock investor and routinely earns an extra $50,000 to $100,000 a year to supplement my father’s regular income and benefits.
Before quitting your job or switching to a single-income household, take a close look at your partner’s job and benefits. If they don’t currently have employer-sponsored health coverage for the whole family, it may be time for them to find a new job that offers it.
2. Get a Part-Time Job With Health Benefits
Not all part-time jobs preclude benefits. I’ve known high-earning managers who work part-time jobs with the minimum hours necessary to secure health insurance. Whether you plan to work full-time elsewhere, retire, or start your own business, a part-time job can at least provide health insurance and perhaps offer a fun, laid-back way to earn a little extra cash and escape your other responsibilities for a while.
Start with these 11 part-time jobs that offer health benefits, and forget about appearances and prestige. They’re overrated, and they certainly won’t deliver health insurance for you.
3. ACA Exchanges
Bringing up the Affordable Care Act (ACA) often prompts an involuntary political reaction, like hitting a kneecap with a mallet. But love it or hate it, the ACA created health insurance exchanges that offer another option for shopping and comparing health insurance plans. On your state’s ACA health insurance marketplaces, you complete an application and then review the quotes available to you. To apply for quotes in your state, visit HealthCare.gov.
One prominent feature of the exchanges is that health insurers cannot deny coverage based on pre-existing conditions. For many, that’s excellent news.
Some Americans also qualify for subsidies based on their income. Check your eligibility using the Kaiser Family Foundation’s health care subsidy calculator.
Because of their ease of use, the ACA exchanges can be a simple place to start looking for coverage. If you don’t like the quotes you get there, you can then expand your search to try to find a better deal.
4. Compare Quotes on Private Insurance Marketplaces
All health insurance plans in the U.S. must comply with ACA requirements. But to be listed on the ACA health insurance exchanges, plans must be certified as “qualified health plans” (QHPs). That involves a stricter set of requirements. Not all health plans in the U.S. meet these tighter requirements, so while they are legal, they’re not allowed to be sold on the ACA exchanges.
Enter: private health exchanges.
On private health exchange marketplaces, you can search and view these non-certified plans not listed on the official ACA exchanges. You may just find lower-cost options to help save money on your health care costs. Check out eHealth and GoHealth as examples of private exchanges.
Just be aware these non-certified plans may not offer the same protections as QHPs. For example, a pre-existing condition may be held against you when you apply for coverage.
5. Association Health Plans
In October 2017, President Trump signed an executive order allowing private groups of individuals to band together to negotiate with insurers for “association health plans” (AHPs). The move has proven controversial, with a dozen states suing the Department of Labor over it. Opponents assert that the Trump administration seeks to undermine the ACA exchanges by allowing lower-risk groups to collectively bargain for lower-cost plans. While the future of AHPs remains uncertain, the idea is that trade associations and other groups can apply for coverage plans the way larger corporations do currently.
Associations were allowed to form for this purpose starting on April 1, 2019, so it’s not yet clear how the landscape will unfold for AHPs. But they could add another affordable option, particularly for self-employed people.
6. Move Overseas
I interviewed a couple not long ago who retired early, sold their house, and bought a houseboat in Europe. They stay as long as they like in a given city, renting a slip with water and power hookups. When they get restless, they move on to the next city.
As much fun as that sounds, it was health insurance that originally sparked the move. They wanted to retire, which would mean losing their employer-sponsored health plan, but quotes for comprehensive health insurance came back in the $20,000 to $30,000 per year range. So they looked further afield and found a comprehensive health plan in Europe for $7,200 per year covering both of them.
If you’re open to an expat adventure, check out these 10 countries where $2,000 per month buys the good life. And yes, that $2,000 includes health insurance.
7. Health Savings Accounts (HSAs)
They work like this: You buy a low-cost, high-deductible insurance plan and open an HSA to build a cash cushion for health emergencies. When health expenses come along, you pay for them with your HSA to cover the high deductible. Then, your insurance kicks in and covers the remaining costs.
To participate in an HSA, your insurance must meet certain requirements. Most notably, the deductible must be between $1,350 and $6,750 for individuals and between $2,700 and $13,500 for family plans.
Sweetening the deal, HSAs come with triple tax protections: Contributions are tax-free, the earnings and growth of your contributions are tax-free, and withdrawals are tax-free – provided you use them for medical costs, that is.
And because you control the investments, you can see strong returns on your contributions by investing them in stocks and other high-growth assets.
You can even use HSAs as a type of emergency fund. Obviously, they work for medical emergencies, but you can also add flexibility by leaving withdrawal decisions until the end of the year. If you pay for medical costs with non-HSA funds and keep the receipts, then later in the year suffer a non-medical financial emergency, you can retroactively reimburse yourself from the HSA.
8. Ask Your Employer About Retiree Health Coverage
Looking to retire early, but worried about the astronomical cost of health insurance without employer coverage? You should be. According to a 2019 report by Fidelity, the average cost of health care in retirement is $285,000 per couple. And that’s for ages 65 and up when couples have access to Medicare to soften the blow.
Indeed, the climbing cost of health care is fundamentally changing retirement in America, forcing many to prolong their careers to save more money and postpone the burden of health insurance costs.
Some employers still offer post-retirement supplemental health coverage. If you’re thinking about early retirement, check with your employer to see if they offer it. However, beware that even among employers who still offer some benefits, many impose stringent requirements, such as a minimum number of years employed with them.
As a final option, consider quitting your high-stress job and taking a laid-back pre-retirement job instead – one that offers health insurance, of course.
9. COBRA Gap Coverage
I left COBRA for last for good reason: It’s a last resort.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires insurers to allow ex-employees to remain on their current health care plan for up to 18 months after departing their jobs. If that sounds like an easy win, consider that the premium typically shoots upward once your employer stops subsidizing it on your behalf.
Still, it’s an option for gap coverage, allowing some breathing room before you find permanent coverage. That can be useful when you have a certain doctor or set of treatments that you need temporarily but won’t need forever.
Just be sure to research your other options and find a long-term solution, ideally one that lets you bypass COBRA altogether.
As a final thought for the self-employed, keep in mind that you can deduct health insurance costs as a business expense. That lowers not only your taxable income but also your self-employment taxes.
With no end in sight for rising health care costs, those without employer-sponsored health plans increasingly find themselves struggling to afford medical care. There’s no silver bullet for health insurance. Research as many options as you can and find the one that makes the most financial sense for you.
And fanciful as it might sound, don’t write off moving abroad. My wife and I live overseas and enjoy affordable, high-quality health care with little stress and a $13.62 copay. I miss certain things from the U.S., but the tangled web of health insurance isn’t one of them.
How do you cope without employer-sponsored health insurance? What options have you looked into?