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The Cost Conundrum: Why Health Insurance Is Expensive for Self-Employed Individuals W/O Subsidies

Updated: Nov 10, 2023

In an ideal world, access to healthcare should be a basic human right, not a privilege. However, the reality in the United States is far from this ideal, especially for self-employed individuals who are not eligible for subsidies through the Affordable Care Act (ACA). For many self-employed Americans, the cost of health insurance can be staggering. In this blog, we'll explore the reasons why health insurance is so expensive for self-employed individuals who do not qualify for subsidies on the ACA public marketplace.

1. Lack of Employer Contributions

One of the primary reasons health insurance is costly for self-employed individuals is the absence of employer contributions. In traditional employment settings, employers often subsidize a significant portion of their employees' health insurance premiums. This contribution can make a substantial difference in the affordability of coverage. Self-employed individuals bear the full burden of their insurance premiums, which can be financially burdensome.

2. Risk Pooling Challenges

Health insurance relies on the principle of risk pooling, where a large and diverse group of individuals collectively shares the financial burden of healthcare costs. Insurance premiums are determined based on the anticipated healthcare expenses of the entire pool. Self-employed individuals represent a smaller and less diverse risk pool compared to large employer-sponsored plans, making their premiums more susceptible to fluctuations in healthcare costs.

3. Administrative Costs

The administrative costs associated with health insurance can be surprisingly high. Insurance companies must cover expenses related to claims processing, customer service, marketing, and profit margins. Smaller risk pools, like those of self-employed individuals, can result in higher per capita administrative costs, further driving up premiums.

4. Limited Negotiating Power

Large employers often have the negotiating power to secure favorable terms and lower premiums with insurance providers due to the size of their employee populations. Self-employed individuals lack this bargaining power, leaving them with fewer options and less leverage to negotiate for affordable rates.

5. Pre-existing Conditions

Before the ACA, individuals with pre-existing conditions faced significant challenges obtaining affordable health insurance. While the ACA prohibits insurance companies from denying coverage or charging higher rates based on pre-existing conditions, these protections may not extend to all self-employed individuals. If you do not have specific pre-existing conditions, you will face higher premiums.

6. Rising Healthcare Costs

Healthcare costs in the United States have been steadily increasing for years. The rising costs of medical treatments, prescription drugs, and hospital care directly impact insurance premiums. Self-employed individuals, who bear the full brunt of these increasing costs, often find themselves paying exorbitant premiums.

7. Geographic Variations

Health insurance costs can also vary significantly by location. Some areas have higher healthcare costs due to factors like population density, demand for services, and the availability of healthcare providers. Self-employed individuals residing in areas with higher healthcare costs will see their insurance premiums rise accordingly.


Health insurance remains a complex and costly issue for self-employed individuals who do not qualify for subsidies through the Affordable Care Act's public marketplace. The lack of employer contributions, risk pooling challenges, administrative costs, limited negotiating power, pre-existing conditions, rising healthcare costs, and geographic variations all contribute to the high cost of insurance. Addressing these challenges will require continued efforts to improve the healthcare system's affordability and accessibility, ensuring that healthcare becomes a more equitable reality for all Americans, including those who are self-employed.


The private health insurance sector has witnessed substantial growth in recent years. These policies undergo rigorous medical underwriting, akin to the evaluation process employed for life insurance policies, to determine eligibility. To gain deeper insights into the array of available options, we invite you to schedule a consultation through our dedicated booking calendar at Our team is committed to assisting you in identifying the most suitable policy to safeguard both your health and financial well-being.


Theodore Sturos


Private Health Insurance Solutions


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