The Freedom to Write

Simone Nicole Sneed sits at her computer at her apartment in Latham, N.Y. She has been a brand ambassador for a telephone company, a back-up singer in a local theater, a freelance grant writer and a psychic in a scavenger hunt. (AP Photo/Tim Roske)

Dheeraj Chand, a 30-year-old Washington, D.C.-area resident, should be a freelance writer and web developer. Chand was a policy debate coach, has two undergraduate degrees (the second of which he paid for working in “shitty jobs” as a legal assistant and a math tutor), and worked on the 2004 presidential election and the 2005 Virginia governor’s race. For years, he tried to make it as a freelance writer. Like many freelancers, he had to do an odd-job here or there to make ends meet.

But Chand was born with a congenital metabolism disorder. His medical bills run up to $1,500 a month just to control his illness. After a few years working in elections and then journalism, he took a job doing IT work at The Praxis Project, an NGO that provides technological and material support for community organizers. He felt humiliated continually asking his parents, who had emigrated from India with “200 dollars in a savings account” and now lived in a wealthy area of Houston, for money to cover his health care costs. At the Praxis Project, he gets health insurance that covers his disorder as part of his employment, but he has given up on his dream of his own web development company and freelance writing.

Chand’s story is representative of the challenges many freelance writers and other self-employed workers in the so-called “creative class” face when it comes to obtaining quality, affordable health insurance. The current employer-based health insurance system, which is supported by a tax deduction of an employer’s benefits, covers approximately 60 percent of the population, while around 10 percent purchase insurance on their own. Freelancers, except for those who can get employer-based coverage through spouses, must either go without health insurance or purchase it on the individual market. The current system discourages people from setting out on their own to start a new business or make a living where they get to set their own hours and schedules.

The most obvious problem in making it on your own is that individual insurance just costs more. Selling individual insurance requires more overhead: marketing, evaluating each individual’s health to price the policy, and more paperwork. Policies that provide the exact same coverage to someone working for a large employer will cost more for an individual. Even worse, insurers can pick and choose preexisting conditions and then deny coverage for those deemed too costly to cover. Peter Harbage, a fellow at the Center for American Progress, estimated that the average difference in administrative costs alone between individual and group insurance was $300 per year.

Judi Ketteler, a freelance magazine writer who lives in Cincinnati, had to buy individual health insurance for her and her family after her husband left his job to stay at home and take care of their 3-month-old son. Ketteler and her husband had to go through 10 years of medical records and doctor’s appointments just so their insurer could most precisely figure out what conditions and treatments they didn’t have to cover. Ketteler’s insurance doesn’t include mental health benefits so her husband’s visits to a psychologist (related to stress surrounding his job transition) aren’t covered. The mental health parity bill, which passed last year, only applies to large group plans, not to individual ones.

The individual market also makes it more difficult to pay for the medical costs surrounding pregnancy and childbirth. Many freelancers get bare-bone coverage when they are young and single, but as they age and have kids, and their health care needs expand. Ketteler says that it would have been impossible financially for her to have a child without her husband’s insurance. She and her husband are both going to be freelancers for the foreseeable future, so she has had to put off having a second child. The health care costs alone would just be too much.

Ilana Polyak has many of the same concerns. A freelance writer living in New York City, she has had to purchase insurance on her own since her COBRA insurance, a government option that allows for workers to continue receiving their employer provided insurance for a limited time after they leave their job, ran out. She first purchased insurance through the Freelancers Union, but dropped it because “it was just horrible”—few doctors would accept her insurance. When she had increased health care expenses related to her pregnancy, she “ended up paying through the nose.” She purchased her current insurance through Media Bistro, the journalist networking that has a membership association called Avant Guild that provides heath insurance, and her premium is down to $350 a month with a $2000 deductible. Her husband works at a museum where he gets employer-based coverage; the exact same plan for him costs $600 a month.

Although her insurance right now is “pretty good,” Polyak is concerned about what will happen when she has her first* child in six months. Not only will Polyak and her husband’s health care costs go up, but Polyak’s ability to make money will go down because she will have less time to work. Her situation illuminates one the major difficulties with all freelance workers: inconsistent incomes. Freelance writers especially make money only on what jobs and assignments they can get. And while sometimes it’s easy to find jobs that pay at a high rate, the nature of the profession means an inconsistent income stream. Health care costs, however, are constant. Polyak, like many freelancers I spoke with, loves the freedom and flexibility that the work offers, but has to consider finding a job that offers benefits to cover her health care costs.

Of course, Ketteler and Polyak’s concerns are not unique. Just about every freelancer has to worry about an inconsistent income and getting the same benefits and coverage that is often afforded full-time employees. And while employers and encouraged to provide employees because of the tax deduction on health benefits, not only do freelancers have to buy their own health insurance, but they have to pay more in taxes than those with employer coverage. The so-called “self-employment tax” is due to the self-employed having to pay both the employer and employee portion of the payroll tax, meaning that the combined Medicare and social security tax takes 15.3 percent of their wages (half of the tax can be deducted from their gross income).

Most freelancers are willing to accept this extra burden because of the flexibility and freedom self-employment offers. But as health care costs continue to rise while freelancers are essentially left to fend for their own, the exchange looks more and more skewed. Meanwhile the journalism industry is collapsing, leaving fewer and fewer full-time jobs. Even freelancers have less work; they are in a more precarious position than ever.

Freelancers have had to hobble together ad hoc solutions. The Freelancers Union, the same one Polyak belonged to before she switched to Media Bistro’s insurance, has earned a reputation as a potential model for the self employed. Founded by McArthur Grant winner Sara Horowitz, the Freelancer’s Union has been lauded by many progressives as an example of a modern, successful labor union expanding into sectors of the economy that have been previously thought difficult to unionize. In 2008, the Union began offering health care to New York residents through their own insurance company but chaos ensued.

The Freelancer’s Union had already asked its members to switch from HIP Health Plan to Empire Blue Cross and Blue Shield several months earlier. Then, this past November, the New York Times reported that “19,000 members who had obtained coverage through the union’s current plan with Empire Blue Cross and Blue Shield … had to choose from the new company’s five health plans—or look elsewhere for coverage.” Despite the problems with the changes in health insurance plans, Horowitz’s union is still a small model that is supported by those on the left, but it’s not at all clear if it’s a model for freelancers everywhere, since the Freelancer’s Union coverage is only available for writers who live in New York. The fact that the insurance plan is supported by liberal charitable foundations is significant and shows that the model isn’t replicable and doesn’t scale.

Differing restrictions in states makes it hard for any group with members in multiple states to provide equal coverage. Minda Zetlin, the Vice President of the American Society of Journalist and Authors, a professional organization for freelancers who have written for national magazine or have published at least two books, emphasized that the patchwork of state restrictions makes it very difficult for the self employed to get health care. In New York, for instance, one can’t be denied insurance because of a preexisting condition and there is a limit on “how much more you can charge based on your age and state of health.” New York is exceptionally generous—Alexandra Owens, the executive director of ASJA, emphasized that Texas, for instance, has very few of these protections.

Zetlin added that “every state needs to offer a real guarantee issue plan and that everyone can get and that everyone can afford.” Owens also emphasized the need for a leveling of the state-by-state restrictions and regulations on health care. “Freelancers like to be more mobile, not tied to a job, not tied to a desk. Many of them pick up and move for a project and may find themselves in a completely different situation. Now you have to evaluate carefully which state you move to [and] see if there’s health care in [that] state.”

The America’s Affordable Health Choices Act, which is the unified bill coming out of three House committees, would seem to meet the needs of freelancers. This is the first reform that would benefit freelancers by getting everyone in the system: young and old, sick and healthy. The bill mandates the individuals purchase health insurance (or pay a tax if they don’t), establishes a public health insurance option that individuals could buy with a minimum set of benefits, bans discrimination based on preexisting conditions, caps annual out-of-pocket pay for health care, and, perhaps most important, creates a health insurance exchange that would allow individuals to pick among a variety of plans that all meet minimum level of comprehensiveness.

The important part of the exchange is that, in the status quo, many people who purchase health care through the individual market simply don’t have the knowledge or the time to figure which plan is best for them. One of the services that ASJA provides is “explaining the fine print” to its members and giving them information about their health care options. With such an exchange, freelancers could be assured that the insurance they’re purchasing is comprehensive.

For Dheeraj Chand, the mandated availability of an insurance option he could buy into without paying through the nose for his preexisting metabolism disorder would have made all the difference. “Had there been any option that would have taken that 1,500 bucks minimum a month off my radar, there is no doubt in my mind that I’d be a writer or have my own development shop,” Chand says. “My ability to try and fail was completely restricted because I had to guarantee that $1,500 bucks a month. I never got the chance to do the entire entrepreneurial thing.”

Matt Zeitlin is an editorial intern and staff writer at Campus Progress and a sophomore at Northwestern University. Follow him on Twitter.

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