Sidecar Health Review: Health Insurance For Freelancers

Health insurance in the U.S. is extremely expensive. If you're lucky enough to have health insurance through your employer, that can certainly take a chunk out of the high cost. 

However, if you are a freelancer, you’ll have to pay the full cost for health insurance, which can be prohibitive. Sidecar Health is looking to change that. 

Sidecar provides low-cost health insurance plans that are ideal for freelancers. As we'll see, that doesn't necessarily mean Sidecar will be for everyone. But if you're an independent contractor or freelancer who's been struggling to afford traditional insurance, Sidecar Health could be worth considering. Read on to find out who might be the best fit.

Sidecar provides low-cost health insurance. This is not a traditional ACA (Affordable Care Act) health insurance plan. We’ll get into those details a little further down. However, Sidecar does allow you to customize your health plan. This flexibility can make the monthly premiums considerably less than ACA health plans.

Sidecar Health coverage options range from a few hundred dollars up to $2 million. You can also adjust your deductible and other components such as adding prescription coverage. Each of these adjustments will change your monthly premium.

After being approved for a Sidecar Health plan, you’ll receive a debit card, which is how you pay for medical services. In the eyes of your medical service providers, you're essentially viewed as a self-pay patient. Self-pay customers are often charged lower costs than hospitals and doctor's offices bill to insurance companies. Sidecar reimburses a fixed rate for medical services based on on the average cash prices for those services.

Sidecar uses a Benefit Amount for medical services. If your service is more than the Benefit Amount, you’ll have to pay the difference. On the plus side, if the bill is less than the Benefit Amount, you get to pocket the difference. Any medical service must be deemed medically necessary by Sidecar to receive coverage.

Affordable Care Act (or ACA) health plans are those that are found on the Healthcare.gov exchange. If you've already checked out plans on the website, you may be reeling from sticker shock. 

ACA plan monthly premiums for individuals are often in the hundreds of dollars ($500+ is not uncommon) and can be over $1,000 for families. Many plans come with deductibles that are several thousand dollars. This all eats into a significant portion of the average American’s disposable income.

ACA plans cap out-of-pocket costs at $8,550 (2021) for an individual and $17,100 for a family. That doesn’t count monthly premiums, co-pays, and deductibles. That can be a crippling amount to spend on healthcare costs for many Americans.

Sidecar Health plans are short-term alternative health insurance plans. These are alternative plans because they're not ACA health plans. They're short-term because the plans last for a year and must be renewed. An overall three-year option is available and lets you lock in your rate. This three-year period coincides with the Trump administration’s expansion of alternative health insurance allowable terms.

Digging a little more into the details, you'll notice that Sidecar does not issue the health insurance themselves since they're not an insurance company. Instead, they are the exclusive program manager and administrator of the fixed indemnity insurance plans that are being sold.

Insurance is provided by United States Fire Insurance Company and Sirius America Insurance Company. Sidecar is a licensed third party administrator to those companies. “This is nothing like other fixed indemnity products,” Quigley said in an interview with Sun Sentinel. “No other fixed indemnity product covers 170,000 things.”

Despite Quigley's assurances, Sidecar is probably best for people without pre-existing conditions and who are in good health. As a non-ACA insurance provider, it's not required to renew your policy if you develop major health issues.

While Sidecar Health won’t cover as many items as an ACA health plan, it could work for some people. If you don't have pre-existing conditions and are in good health, you may be able to save a lot of money by choosing Sidecar over a traditional insurance plan.

If you're a college student and a ACA plan is financially prohibitive for you, check out our guide to affordable health insurance for college students. Some notable health plan options include:

• Coverage under parent’s insurance
• School-sponsored health plan
• Medicaid

For everyone else, other ACA alternatives include healthcare sharing programs, employer-sponsored plans, and getting coverage under your partner’s health insurance plan.