Why I Regret Using Marketplace Insurance (But It Might Be Right For You)
Pre-S: Open enrollment season has begun! If you are going to enroll in marketplace insurance, you have from November 1 until December 15 to do so. Don’t wait! Start your research and get yourself enrolled.
In early 2018, I was a brand new entrepreneur. I had quit my stable job at the end of 2017 to run my business full-time. I was excited and terrified, but there was one thing I knew for sure: I needed to have health insurance. I was on birth control, I took thyroid medication, and I take preventative care seriously. I also am risk-averse when it comes to the possibility of getting sick or injured and not having insurance. So I decided to look at my options.
There was one thing I knew for sure: I needed to have health insurance.
One option was to become Dan’s domestic partner and go on his insurance. It only costs $25 in Maryland to become domestic partners, and the cost for adding me to his employer-sponsored insurance plan would be $100 a month. The other option was to get health insurance through the marketplace. When estimating what my business income would be, the marketplace website said that my monthly premium would be $0 a month. That seemed like the obvious choice! However, there ended up being some downsides that make me wish we’d gone with the domestic partnership option from the beginning.
Note: I don’t say all of this to discourage you from getting health insurance through the marketplace. In fact, I’m a huge supporter of the marketplace, and I think we should have universal healthcare. However, I am telling my story so that you can make sure you’re asking yourself the right questions to make sure you’re getting the best option available to you.
I Couldn’t Easily Access Mental Health Services
As I mentioned, I was newly fully self-employed, which meant I was going to be spending a lot of time at home by myself. I was also going to be challenging myself on this new path of entrepreneurship. So I felt pretty strongly that I should be working with a therapist during this time. Unfortunately, since I was using Kaiser insurance, I was limited in which therapists I could see. There was a Kaiser location right by my house but that location didn’t house the mental health services. The location where therapists worked out of was several miles away and not accessible via public transportation. At that time, I didn’t have access to a vehicle to get myself there once a week. It also didn’t make sense to take a cab to and from therapy every week. It would have been way too expensive. So I waited until 2019 to start seeing a therapist. Luckily, I wasn’t going through a mental health crisis, but I think I would have felt better if I’d started sooner. So it’s important to find out what your options are with the health plan that you choose.
I Didn’t Understand the Tax Implications
The tax implications are the main reasons that I regret using marketplace insurance. Just to reiterate, when I was on marketplace insurance, I was not yet married to Dan. I was self-employed starting in January 2018 and we didn’t get married until November 2018. And I wasn’t put on his employer-sponsored plan until December 2018. So of course, getting my own insurance was necessary for 11 months out of the year. However, since we got married in November, we had to file our taxes as a married couple. This meant that all of our household income was combined together. So Dan’s salary, his freelance income, our Airbnb income, and my business income were all put together and viewed as the amount that we earned together.
When our tax professional first filed our taxes, we were told that we’d get a significant refund, which we were excited about. However, it turned out that we weren’t getting that refund. Not only that, but we owed a couple more thousand dollars to the IRS. Luckily, I’d saved more of my business income than I needed to, so we had the money to pay. It didn’t feel good, but at least we didn’t end up owing the IRS long-term.
Despite All of This, Marketplace Insurance Might Be Right for You…
My situation was very frustrating and looking back, we wish we’d done it differently. However, that’s absolutely not going to be the case for everyone! The marketplace has made it so that many previously uninsured people can now access health insurance. It’s not perfect (yet), but it’s much better than it was before. So it might be the best option for you.
Here are some reasons why the marketplace might be right for you:
You don’t have employer-sponsored health insurance
You don’t have a spouse with employer-sponsored health insurance
You can’t afford other private insurance plans
You don’t qualify for Medicaid
If you want to learn more about getting insurance through the marketplace, visit healthcare.gov. Make sure you do this ASAP! Don’t wait until December 15th to sign up for health insurance.