This works if you're young (health insurance is expensive, working/traveling away from family), have resources (for those unexpected expenses, and the slow payers), and are able to take your work with you on vacation (important customers need service); but for the vast majority of professionals it's just not possible any more, without significant financial support starting out.
You need a good chunk of capital to survive the first few years, before you even think about expanding. (Which, when it's time, you must do, or risk shrinking into oblivion. And not everybody is able and willing to expand forever. I wasn't.)
Just sharing my own little caveat; otherwise I think starting your own firm/consultancy is fantastic.
ACA subsidies are based on income, not net worth. If you quit your job and you're in a state that expanded medicare, or if you can pay yourself a bit above the poverty line, you can take care of most of the cost with subsidies.
Do the subsidized plans actually cover anything? I'm on an Obamacare plan that basically covers catastrophic health care and everything else I pay for.
If it's a subsidized catastrophic plan that's not helpful. I'd be surprised if they subsidized one of the regular plans in full.
It's not a subsidized catastrophic. The subsidy is pegged to the 2nd cheapest silver plan in your area. Silver is 2 steps above catastrophic coverage (catastrophic > bronze > silver > gold > platinum).
The subsidy is calculated so that you won't have to pay more than x% of your income for the 2nd cheapest silver plan. 2% of your income if you make between 100% and 133% of the federal poverty level, and 9.5% if you make between 300% and than 400%. With a sliding scale in between.
The real problem happens when you make below the poverty level, but you live in a state that hasn't expanded medicaid. Then thanks to the governor's of those states, you get nothing.
As long as we're talking about consulting, you shouldn't need a few years of living expenses saved up. If you aren't making a living within the first year then it's time to try something else or go back to a salaried job.
Straight consulting... probably not that much, I suppose, but you still need enough to carry you through a couple rough quarters (at least) to retain and serve a steady pipeline of clientele, and be able to account for payment scheduling issues that arise from time-to-time. (Those small disruptions quickly compound.)
I liked having a one-year nest egg stashed away when I was operating at full-steam.
And, of course, smart players will have a little next egg AND have a pipeline partly-filled before leaving a day job. :)
You need a good chunk of capital to survive the first few years, before you even think about expanding. (Which, when it's time, you must do, or risk shrinking into oblivion. And not everybody is able and willing to expand forever. I wasn't.)
Just sharing my own little caveat; otherwise I think starting your own firm/consultancy is fantastic.