The good news is that many Americans can get their premiums lowered if they know how to shop for insurance plans. That $396 average premium is before tax credits, but the average American with a federal marketplace plan is paying just $106 a month once the credits are factored in — not so much more than the average American with an employer plan.
And the credits cover many middle class families. If you earn less than400% of the poverty level — that’s $47,520 for individuals and $97,200 for a family of four in 2016 — you should qualify for the subsidy. To get the credit, you must buy a health plan available through your state’s marketplace.
If you don’t qualify for subsidies, you can find more insurance plans directly through the insurers’ websites or through brokers like eHealth. These plans may offer better options than Obamacare plans, but they’re priced accordingly. Many Obamacare plans keep costs down by limiting the network of doctors you’re allowed to see, for instance. Compared with plans sold outside the government exchanges, Obamacare plans had 34% fewer health care providers like primary care physicians, hospitals and specialists, according to a 2015 study by Avalere. But a separate 2014 study by HealthPocket found that the most affordable Obamacare plans had 40% lower premiums than similar off-exchange plans. If you need to see certain specialists, you might want to splurge a bit on premiums to ensure you can keep your doctors.

DON’T cheap out with a short-term health plan.

One way some freelancers have been cutting their costs is by cobbling together a few short-term health plans, which typically offer monthly lower premiums ($110 a month, on average). According to eHealth, interest in short-term health insurance increased 134% after the Affordable Care Act was implemented.
However, short-term plans are not a substitute for traditional insurance. First, short-term plans don’t have to meet the standards required by the Affordable Care Act, which means they can discriminate against people with preexisting conditions, refuse to cover services like preventive care and prescription drugs, and put annual or lifetime caps on benefits.
Also, since short-term plans don’t meet Obamacare’s standards, they aren’t actually considered “insurance” — so you’ll still have to pay the Obamacare tax penalty if you don’t have other minimum essential coverage.
In light of these problems, HHS recently proposed new rules that would prevent Americans from remaining on short-term plans for longer than three months and require that insurers warn consumers about the fine print.
Since you might not be covered if you get really sick and you still must pay the tax penalty, only consider short-term plans if you’ve missed the deadline to get coverage and you don’t qualify for a special enrollment period (more on that below). Otherwise, don’t make short-term health plans part of your long-term strategy.

DO consider skimpier Obamacare coverage instead.

A better way to get premiums down: Opt for a higher deductible. The highest deductibles are on so-called catastrophic plans. If you do get sick, you will have to pay a lot more out-of-pocket — and you can’t apply a tax credit to a catastrophic plan — but if you’re relatively healthy, you can save a lot with lower monthly premiums.
Not everyone qualifies — you must be 30 years old or younger to get a catastrophic plan (or you must qualify for a hardship exemption). People on these plans can get three primary care visits and other preventive services for free. But aside from that, enrollees must pay $6,850 out-of-pocket before they hit their deductible and before insurance starts to cover other health care services.
Why would anyone choose such a skimpy plan? To save a ton on premiums. In Brooklyn, N.Y., for instance, a catastrophic plan is available from CareConnect for $175 a month — less than half the cost of the cheapest silver plan, according to a plan comparison list from the Freelancers Union. A smart move would be to put aside those monthly savings in an emergency fund or health savings account to cover emergency out-of-pocket costs.
If you’re over 30 or want slightly better coverage, choose a bronze plan, which is expected to cover 60% of out-of-pocket costs. While most Americans with Obamacare choose silver plans because the tax credit is calculated based on the second-lowest cost silver plan in their area, you can also apply your tax credit to a bronze plan. Again, remember that you’re risking higher out-of-pocket costs in return for lower monthly premiums.

DON’T miss the deadline.

If you don’t yet have health insurance for 2016, it’s probably too late. Now that insurers are no longer allowed to discriminate against people with preexisting conditions, there’s just a limited window of time when you’re allowed to enroll, to dissuade you from waiting to buy insurance until you are sick. Generally, you can only buy individual insurance during the open enrollment period. The last one ended on Jan. 31, 2016, and the open enrollment period for 2017 will be from Nov. 1, 2016 to Jan. 31, 2017.
There are a few exceptions. You may be able to sign up for health insurance before November if you experience what’s called a “qualifying life event” — moving to another state, getting married, or having a baby. To take advantage, you’ll need to apply for a special enrollment period Move quickly: In most cases, you only have 60 days after the qualifying life event to enroll.

DO plan for tax time.

The Obamacare tax credit is odd in that you get it in advance — instead of making you wait until you file your taxes and receive your refund, the credit lowers the amount you pay in health insurance premiums every month. But the subsidy you get is based, in large part, on how much you earn. When you enroll, you must provide an estimate of your income for the rest of the year. Then when you file your taxes, you must reconcile your estimated earnings with your actual earnings, to make sure you got the right amount for your tax credit.
Yet many freelancers have income that varies. If you overestimate your earnings, you’ll get a bigger tax credit than you expected, and thus a bigger refund. But if you underestimate, you may need to return part of your tax credit at filing time.
This is a fairly common problem: Last year, H&R Block found that more than half of their taxpayers underestimated their income and needed to pay back a portion of their credit, $530 on average. If you make less than 400% of the poverty line, there’s a cap on how much you could be forced to pay back — but you still want to be careful when estimating your income.
The good news? As a freelancer, you can deduct the cost of your health insurance premiums, even if your other deductible expenses don’t exceed the standard deduction ($6,300 for individuals this year). Freelancers’ health insurance premiums are a so-called above-the-line deduction, which lower your taxable income before other write-offs are applied. That should help during tax season.