Medically reviewed by Jawad Arshad, MD, FACEP. Last reviewed: September 29, 2026.
Disclosure: This guide also mentions membership-based coverage. Membership-based coverage is not insurance, is not regulated as insurance, and does not count as ACA minimum essential coverage.
Health insurance for self employed people costs more in 2026 than it did a year ago, because the enhanced ACA tax credits expired at the end of 2025. Freelancers, 1099 contractors and business owners have five ways to get covered, and a tax deduction that can offset part of the bill.
Key facts
- The average monthly payment for marketplace consumers rose 58% in 2026, from $113 to $178 (KFF, 2026).
- The average marketplace deductible rose to $3,786 in 2026 (KFF, 2026).
- Bronze plans grew from 30% to 40% of marketplace selections in 2026 (KFF, 2026).
- The self-employed health insurance deduction cannot exceed net earnings from the business, and it is reported on Schedule 1 (Form 1040), line 17 (IRS Instructions for Form 7206, 2025).
- HealthCare.gov open enrollment for 2027 runs November 1, 2026 to January 15, 2027, with a December 15 deadline for January 1 coverage (healthinsurance.org, 2026).
How much does health insurance cost for self employed people?
Marketplace consumers paid an average of $178 a month toward premiums in 2026, up 58% from $113 in 2025, according to KFF. That average covers all enrollees and includes subsidies. It hides a wide range, because the price depends on age, state, income and plan tier.
The enhanced premium tax credits expired at the end of 2025 (KFF, 2026). People above 400% of the federal poverty level lost eligibility and now pay the full premium. Many self-employed people have variable income, so a strong year can push them over that line.
| Marketplace measure | 2025 | 2026 | Source |
|---|---|---|---|
| Average monthly payment | $113 | $178 | KFF, 2026 |
| Average deductible per person | about $2,759 | $3,786 | KFF, 2026 |
| Share choosing bronze | 30% | 40% | KFF, 2026 |
Insurers requested a median 15% premium increase for 2027, according to Medical Daily (2026). Our 2027 premium increase by state guide shows early filings state by state.
What are the health insurance options for self employed people?
Self-employed people have five main options: a marketplace plan, an off-exchange individual plan, a spouse's employer plan, COBRA from a past job, or membership-based coverage. Only the first four are insurance.
| Option | Is it insurance? | Notes |
|---|---|---|
| ACA marketplace plan | Yes | Premium tax credits available by income. Enroll during open enrollment or a special enrollment period. |
| Off-exchange individual plan | Yes | Same ACA rules, no tax credit. Bought directly from a carrier or agent. |
| Spouse or partner's employer plan | Yes | Costs may be low, but you lose the self-employed deduction for any month you could join a subsidized plan. |
| COBRA from a past job | Yes | Temporary. See our COBRA alternatives guide. |
| Membership-based coverage | No | Not regulated as insurance. See the section below. |
Read our best health insurance plans guide for carrier comparisons. If you are picking between a marketplace plan and a bronze or silver tier, compare the deductible and the out-of-pocket maximum, not only the monthly premium.
Can I deduct health insurance premiums if I am self employed?
Yes. A self-employed person can deduct premiums for health, dental, vision and qualified long-term care insurance for themselves, a spouse and dependents (IRS Instructions for Form 7206, 2025). The deduction also covers a child who was under age 27 at the end of the year. You report it on Schedule 1 (Form 1040), line 17.
There are two limits. First, you cannot take the deduction for any month you were eligible to join an employer plan, including your spouse's, that is subsidized, even if you did not join (IRS, 2025). Second, the deduction cannot exceed the net earnings from the business that sponsors the plan.
Here are two worked examples. Both are hypothetical.
| Case | Net profit | Premiums paid | Deduction |
|---|---|---|---|
| Full year | $60,000 | $550 x 12 = $6,600 | $6,600 |
| Slow year | $5,000 | $550 x 12 = $6,600 | $5,000 (capped at net profit) |
In the first case, a $6,600 deduction lowers income tax by $792 at a 12% marginal rate, or $1,452 at 22%. In the second case, the cap cuts the deduction to $5,000. Our premium deductibility guide covers retirees, Medicare and small business owners too.
- Does my business show a net profit this year?<br>
- Was I eligible to join a subsidized employer plan, mine or my spouse's, in any month?<br>
- Are the premiums for me, my spouse, my dependents or a child under 27?<br>
- What are my total premiums for the year, and what is my net profit? The deduction is the lower number.<br>
- Where do I report it? Schedule 1 (Form 1040), line 17, with Form 7206.<br>
Are health share plans a good option for freelancers and self employed people?
A health share plan is a good fit for some self-employed people and a poor fit for others, because it is membership-based coverage, not insurance. Members share eligible medical costs. The group does not promise payment, and it does not count as ACA minimum essential coverage.
The trade-offs are simple. Monthly costs can be lower than an unsubsidized marketplace plan. Pre-existing conditions and waiting periods can limit sharing, and eligibility rules apply. Read our health share waiting periods guide and the best healthshare plans review before you decide.
The IRS deduction applies to premiums for health insurance. Membership-based coverage is not insurance, so ask a tax professional before you assume a membership fee qualifies.
Results depend on your plan terms and IRS rules. Not legal or tax advice.
Can 1099 contractors get health benefits from the company they work for?
No. A 1099 contractor is self-employed, so the company that pays them cannot enroll them in its Section 125 cafeteria plan, which covers employees only. Contractors buy their own coverage and may deduct it.
Our 1099 contractor Section 125 guide explains why, and what a contractor can use instead.
When can a self employed person sign up for health insurance?
Self-employed people can sign up during open enrollment or after a qualifying life event. For 2027 coverage, HealthCare.gov open enrollment runs November 1, 2026 to January 15, 2027, and December 15 is the deadline for coverage that starts January 1 (healthinsurance.org, 2026).
Many state exchanges run longer. California, the District of Columbia, New Jersey and New York run to January 31, and Rhode Island ends December 31 (healthinsurance.org, 2026). A federal court vacated a rule that would have shortened the window, and the appeal is scheduled for oral argument in late October 2026, so confirm the dates before you plan around them. Outside open enrollment, coverage requires a special enrollment period tied to a qualifying event.
Compare Plans for Your State
A licensed advisor compares marketplace plans and membership-based coverage for your state, income and household, with no pressure to enroll.
Frequently Asked Questions
What is the best health insurance for self employed people?
How much does health insurance cost for self employed people?
Can 1099 employees get benefits?
Do 1099 contractors get health insurance from the company they work for?
Are healthcare sharing plans good for freelancers?
Is health insurance tax deductible for the self employed?
Sources: KFF, What We Know So Far About 2026 ACA Marketplace Enrollment, Premiums, and Deductibles (2026); IRS, Instructions for Form 7206, Self-Employed Health Insurance Deduction (2025); healthinsurance.org, What are the deadlines for the ACA's open enrollment period (2026); Medical Daily, ACA Open Enrollment 2027 Dates, Premiums, Deadlines (2026); Internal Revenue Code Sections 125 and 162(l); Summit Health Benefits, Individuals and Families plan page (2026).