In the difficult days following a game studio’s shutdown or a round of layoffs, ex-employees often feel overwhelmed. Besides figuring out their next career step, the uniquely American employer-funded healthcare system means they’re forced to cope with the additional stressor of ensuring their families stay healthy while job-hunting.
Thousands of think pieces have been written about the healthcare system over the last few years. I don’t have any substantive insights on the policy debate that someone else hasn’t already voiced. But the topic is again at the forefront of my mind as I transition from working for others to self-employment for the second time in a decade. Those between jobs or building a new business are forced to consider the practical aspects.
Health care is not optional; we need it to stay alive. Health care is what economists refer to as an inelastic commodity – something that (when you need it) you’ll pay as much as it costs, regardless of supply and demand and other market factors. Without insurance (in the United States) individuals and families risk staggering bankruptcy and personal ruin that can carve a path of destruction through the rest of their lives, simply because a roll of the genetic dice came up snake eyes and they ended up with a serious illness.
In my experience, most game companies – and tech companies in general – offer rich group health insurance as a juicy employee benefit. While the plans have the usual confusing mix of copays and yearly deductibles and exclusions, employee contributions for the insurance itself are often kept very low – sometimes even nonexistent, as the studio picks up the entire bill.
Those who have worked in other fields realize how rare this type of benefit is, but because it’s invisible most of the time, it’s often overlooked. Only when you’re departing a company and get the first glimpse at what it will cost you for COBRA coverage – continuing your employer’s health care plan on your dime – do you realize how much money the company was shoveling into the voracious for-profit maw of the health care system every month on your behalf.
For a family taking advantage of COBRA coverage in 2023 for a high-quality employer health care plan, the bill takes a significant bite out of a household budget. Then too, in a studio shutdown situation, COBRA coverage will not be an option for long. Once an employer goes out of business and isn’t paying to keep the health plan active, the COBRA option is no longer available for ex-employees – at that point, you’re on your own!
So what does “on your own” look like if you’re entering the world of the self-employed?
Self-Employed at the Right Time
These days, the options for the self-employed are better than they once were. The ACA (the once-controversial “Obamacare” law), while far from perfect, made substantive changes to the industry; it’s more viable for the self-employed to cover their families. Preexisting conditions restrictions are disallowed; costs are somewhat contained; tax subsidies make the premiums bearable (though still high).
My family’s situation is a great example. My wife and I are both self-employed. We are no spring chickens and can comfortably be described as “middle-aged.” (Sorry, dear.) We are in good health but have the normal aches and pains and chronic conditions folks have at our age. My cholesterol is high (mostly genetics, with a splash of bad dietary habits) and my blood pressure is borderline; I have regular drug prescriptions for both conditions. Our 13-year-old son has allergies and needs monthly allergy shots. Before the ACA, had I tried to purchase health insurance privately, it would have been expensive – and likely would not have covered my son’s allergies, my regular medications, or major illnesses (such as heart attacks) that could be attributed to our preexisting conditions, without a long delay.
We are now covered by an ACA plan for the second time in my career. While it’s not cheap and did require adjustment (it’s an HMO, rather than a PPO, which means we have to work through primary care providers that serve as gatekeepers to any substantial care), it’s still relatively affordable – and potentially life-saving.
Of course, ACA insurance is an American for-profit health insurance plan, just like an employer plan. That means stacks of “not-a-bills” with confusing procedure codes, random denials of care for no discernable reason, spiraling premium increases each year, and thousand-dollar Tylenol pills if we end up in the emergency room (always ask for an itemized bill!)
We know we’re fortunate. We can afford ACA plan premiums and keep our family in good health, with a theoretical cap on out-of-pocket expenses in a given year. Meanwhile, many American families have to choose between health care, and rent or food.
A Path to Better Options
Several years ago, shortly before I joined BonusXP, I wrote about the game industry’s increasing reliance on contract and outsourced labor and the similarities to the early days of the movie business. SAG-AFTRA, the Screen Actor’s Guild – the powerful labor union representing actors, journalists, and radio announcers – offers a group health insurance plan to members that make a certain amount of money in the business (just under $27,000 in 2023). While the track record for the SAG-AFTRA insurance plan has not been perfect – famously, the estate of the late Ed Asner filed a posthumous lawsuit against the union’s health plan for age discrimination – it provides an option for self-employed union members outside of traditional employer-funded health insurance.
Given the historically limited job security for most game developers, a robust labor organization comparable to SAG-AFTRA for the game industry is overdue. At different times, the IGDA has worked with insurance partners to offer discounts on individual plans or group insurance options for startup companies. That said, the IGDA is a loose professional network with limited negotiating power and support, not a labor union. Most self-employed individuals who need insurance will find their best option is an ACA plan.
I’m hopeful that one day we can get past the political rhetoric about the healthcare system that has poisoned the well over the last several years. I’d love to see our leaders initiate substantive discussions on health care policy, focused on how we deliver good care for patients as well as the economic impact providing health insurance plans has on how employers do business. As it stands, the existing system stifles innovation, making it extremely risky for people to start a business and placing a heavy financial and logistical weight on the backs of every single employer, large or small.
In the meantime, options are available for you and your family if you’re self-employed or between jobs – take advantage of the ACA, rather than take a risk and go uninsured.
Studio shutdown or layoff? Losing your employer’s health care plan? Healthcare.gov has you covered for less than you think. And no, the feds aren’t paying me to write this blog.
Next week, I’ll get back to writing about cool games and fun stuff.