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Health Insurance in the United States: How Does It Work?

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Health insurance in the United States: In terms of insurance, health is undoubtedly the most complex subject in the United States! Unlike France or Canada, the US health care system is essentially private. If you do not have insurance, the bill may be salty in case of problems because care in the US is considered among the most expensive in the world.

Health insurance in the United States
Health insurance in the United States

The American health care system is very different from that of France or Canada. If there is a “social security”, it does not have the role of taking care of the medical expenses, but rather of paying the retirement allowances. In other words, there is no health insurance in the USA.

Health insurance is mainly a private system. However, there are two public supports: Medicaid, medical assistance for the poorest families, and Medicare, a federal program accessible to retired people over 65 or severely disabled. Until 2014, the date of the establishment of the Affordable Care Act or  Obamacare,  which requires all persons residing in the United States to subscribe to health insurance (covering a minimum basket of services), it does was not required.

MAJ March 2018: Note that Obamacare is the No. 1 target of the government of Donald Trump, which seeks to get rid of this system.Failing to find a majority to vote for the end of Obamacare, the government is currently allowing insurers to increase “premiums” (contributions) until the system explodes on its own.

Why take health insurance?

The access to care is not evident in the United States. If you do not have health insurance, a hospital has the right to refuse your admission to the emergency department, the slightest surgical intervention can cost you several tens of thousands of dollars where you pay the care at the high prices, because the practitioner does not apply the negotiated rates that it must apply to insured persons.

Health insurance in the United States
Health insurance in the United States

According to statistics, the health post represents more than 16% of the monthly expenses of an average American household and would be among the first causes of indebtedness or insolvency in the US. In short, to say that a health insurance is essential in the United States!

If you want to be covered for your health expenses, you must subscribe to private insurance. They work like health mutuals. You must pay monthly contributions, the value of which depends on the health risks you wish to ensure, and then benefit from care in the event of illness.

However, if you are French expatriates, for example, you have two options: take out American health insurance, like any resident of the United States, or take an international insurance policy.

Health Insurance in the United States: How Does It Work?

– American health insurance:

If you subscribe to US insurance, you have the choice of three health plans: OPC, HMO and II.

The PPO (Preferred Providers Organizations) are private insurance companies that offer employees medical coverage through their company. The monthly contribution is therefore borne by the latter. These PPOs function as “corporate mutuals” in France. They cover the medical expenses, the consultation fees and the hospitalization costs of their members, but on the condition that the patient refers to the doctors and hospitals of the network defined by the company.

The HMO (Health Maintenance Organization) are entities offering both insurance and medical care. By subscribing to this company, in return for a lump sum contribution, you will be able to benefit from a complete care service in the event of illness. You can then seek treatment from the health professionals of the organization, but also from other fee-for-service specialists who must nevertheless be on the list of professionals approved by the HMO.

The II (Indemnity Insurances) are independent insurance companies, which means that they do not depend on any company or organization. They operate on a fairly simple system where insured members contribute according to the risks they wish to cover. The more important they are, the higher the contribution will be.

– International insurance:

French people abroad are often very attached to the health insurance system “à la française”. Many insurances offer either contracts that allow continuing to benefit from the French social security (through the CFE * for example) with complement a mutual or international insurance contract.

If you are employed in a US company with more than 50 employees, chances are you already have American insurance. If you are sent by your company to the United States, several solutions are available to you including that of insurance for expatriates in your company. If you are self-employed or your business does not cover you, you need local or international health insurance that meets the criteria of the US government.

But beware, still so far few international insurances are in compliance with the Obamacare. If your insurance is not “Obamacare compliant” (compatible with Obamacare), you risk financial penalties, like someone who does not have health insurance. This fine is calculated according to a% of his income or a minimum fee. It is therefore important to calculate the benefit well.

How to choose health insurance in the United States?

Whether local or international, the choice of health insurance is based on the needs, but also the budget because they remain expensive. All insurances are not equal and it is imperative to compare the rates of companies, ask for quotes (free) to study carefully what is covered and what is not. In any case, whatever your coverage, you will certainly have a minimum to pay.

Health insurance in the United States
Health insurance in the United States

There are obviously different types of contracts that offer more or less extensive coverage. To choose the right health insurance, you have to take into account several criteria such as the limits of cover, the deductibles or the level of care for each health post.

Attention: if you also want to be insured for dental or visual expenses, you must take additional insurance. Indeed, the health insurance does not cover the dental care or those related to the vision (consultation or optics for example).

With the US insurance, it is necessary to assimilate well the local jargon … Here are some definitions to help you there:

  • Copay: the sum remaining due after the assumption of your insurance (an equivalent of “co-payment” in France),
  • Out of pocket maximum: the maximum ceiling that you will have to pay from your pocket,
  • Deductible: the franchise, that is, the amount from which your insurance begins to pay back,
  • Coverage & Exclusions: the list of risks covered and not covered by the insurance,
  • Network: the network of health professionals,
  • Out-of-network: Physicians outside the network,
  • Out-of-network coverage: Coverage of insurance when visiting an off-network practitioner (case of PPO),
  • Pre-existing condition: if the diagnosis of a disease is prior to the signing of an insurance contract, insurance has the right to refuse health coverage. But it can not, however, break an existing insurance contract.

The rates for health insurance are very different from one person to another because they are calculated according to the family situation, sex, age, income or the network of providers that you can access as Clearer. In addition, in the case of US insurance, prices may also vary depending on the state where you reside, the medical cost in Arizona is not the same as in New York.

Health insurance in the United States
Health insurance in the United States

Or take out health insurance?

Given the complexity of health insurance, it is essential to use a specialist to find the contract best suited to your profile and your budget. Like most insurance, it can be purchased from a broker or directly from an insurance company. Contrary to what one might think, going through a broker does not cost more than directly by a company, because the broker is not paid by the client, but by the insurer. In any case, the best is to call a specialist francophone who can explain in your language all the products at your disposal.

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