Health Insurance Deadline Looming: With the Healthcare.gov Special Enrollment Period set to end on August 15, one group appears to be at risk of missing out on low-cost, high-quality health insurance: gig economy workers.
According to data that will be released this week from Stride Health, a benefits platform for independent workers, 31% of independent contractors and gig workers surveyed were uninsured—three times the overall rate of uninsured Americans.
Among uninsured workers in the Stride survey, conducted in July 2021, cost was the top reason for going without health insurance. Sixty-four percent of uninsured respondents said they didn’t think they could afford health insurance.
In reality, the cost of quality health insurance may not be as big a barrier as many workers believe it is.
Data previously released by the company showed that 93% of independent workers who had signed up for health insurance via Healthcare.gov qualified for subsidies to offset the costs of health insurance. According to that data, survey respondents paid an average of $80 in monthly premiums and 37% paid less than $1 per month for coverage.
Many independent workers aren’t aware that their costs might be that low. Nearly 80% of gig workers who are uninsured due to cost didn’t know about the subsidies available to millions of Americans due to the American Rescue Plan Act (ARP).
Contributing to low awareness of savings opportunities is outright misinformation, according to Noah Lang, cofounder and CEO of Stride.
Though Lang said he tries to stay out of politics, he has heard from many workers who believe Donald Trump got rid of the Affordable Care Act (ACA), which created Healthcare.gov and individual health insurance options for people who don’t get coverage through a job.
“I run into individuals every single week who think you can no longer get access to subsidies for your health insurance because the Affordable Care Act [is] gone,” Lang said.
Not only is the ACA still the law of the land, it’s been supercharged by the ARP, according to Lang.
Passed in March 2021, the ARP expands access to subsidies for more people, effectively lowering monthly premiums by an average of $50 per person. According to the Centers for Medicare and Medicaid Services (CMS), four out of five enrollees can find a health insurance plan for $10 per month or less after tax credits.
Access to affordable health insurance outside of traditional employment situations—where 50% of American workers get health insurance—will become increasingly important as the gig economy grows.
Today, more than one-third of the U.S. workforce participates in the gig economy, with an estimated 59 million Americans working independently either full- or part-time, according to an Upwork survey.
During the Covid-19 pandemic, 12% of U.S. workers started freelancing, more than half (54%) out of necessity. Virtually all freelancers surveyed reported that they intend to to continue freelancing and the total number of freelancers in the United States is projected to grow to 90 million by 2028.
For these workers, health insurance will continue to be something they need to manage on their own.
“Everything in your paycheck has been unbundled for [nearly] 60 million Americans now,” Lang said.
That unbundling may be long overdue. The current employment-based health insurance system stems from the World War II era, but the nature of work has changed dramatically since then.
When the pandemic brought record unemployment, dual public health and economic crises exposed weaknesses of the employer-based benefit system.
A 2020 Brookings report on proposed post-pandemic labor policies calls for portable benefits that are tied to the hours worked rather than the job itself as a way of protecting workers.
Lang said he hopes policy makers will embrace regulations that allow benefits to catch up with the nature of work today and encourage evolution in how gig workers like rideshare and delivery drivers get benefits.
“Imagine a world where you can change jobs and never have to switch your health plan or your 401k provider,” Lang said. “Imagine a world in which you can get contributions from your employer [or] your work platform regardless of how your job is classified or how flexible or inflexible it is.”
The resulting safety net would be portable to workers and could diminish the financial disadvantages gig workers face.
“It doesn’t mean [you’d] take benefits away from people who have them,” Lang said. “It just means create a level playing field for coverage that…you can take wherever you go.”
While Healthcare.gov is open, Lang urges people to see if they’re eligible for subsidized health insurance.
“If you don’t have coverage, go get it,” he said. Even if you have coverage, Lang still recommends checking out the options.
“Make sure you’re not missing out,” he said. “Odds are, you can get it for a lot less than you think and absolutely a lot less than you were able to before.”