Health insurance is one of the first subjects people run into after moving to the United States. Unlike many countries where the state takes on a large share of healthcare costs, in America most medical services are paid for through insurance companies. That is exactly why choosing the right plan can have a serious effect not only on your access to medical care but on the family budget.
For many people the American insurance system looks complicated. A great many terms, dozens of different plans, deductibles, limits and clinic networks can confuse even those with good English. But once you understand the basic principles of how health insurance works, finding a suitable option becomes much easier.
Why health insurance matters so much
Medical services in the United States cost considerably more than in many other countries. Even an ordinary appointment with a doctor can cost several hundred dollars, and treatment in hospital thousands or tens of thousands.
So having health insurance is not simply an extra service but important financial protection.
An insurance policy helps reduce the cost of:
- visits to doctors;
- laboratory tests;
- diagnostics;
- hospital admission;
- operations;
- prescription medicines;
- preventive check-ups.
Without insurance, even relatively straightforward treatment can become a serious financial burden.
How health insurance works
Most insurance companies have contracts with particular clinics, hospitals and doctors. That is why the cost of treatment depends directly on whether the patient goes to a doctor inside the insurance network (In-Network) or outside it (Out-of-Network).
Once insurance is arranged, the insurance company takes on part of the cost and the patient pays part of it, in line with the terms of the plan chosen.
How much you pay yourself depends on several things:
- the monthly insurance payment;
- the deductible;
- the copay for an appointment;
- the coinsurance percentage;
- the maximum annual limit on your own costs.
It is the combination of these that decides how good value the insurance turns out to be over the long term.
What kinds of insurance plan there are
There are several common types of health insurance in the United States. Despite the different names, what mainly separates them is freedom to choose your doctors and the cost of the service.
HMO
HMO plans are usually considered the most affordable. They require you to choose a family doctor (Primary Care Physician), through whom practically all referrals to specialists go.
That model gives better control over costs but less freedom to choose medical facilities.
PPO
PPO plans are more flexible. Patients can go to most specialists themselves without a prior referral and have a wider choice of clinics.
As a rule these policies cost more, but they let you get the medical care you need faster.
EPO
EPO plans sit somewhere in between. They let you see specialists without a referral, but they only pay for treatment inside their own network of medical facilities.
POS
A POS combines elements of the HMO and the PPO. Patients can have the benefits of a family doctor and at the same time get access to a wider choice of specialists.
What the main insurance terms mean
One of the main difficulties for new residents of the United States is the specialist insurance vocabulary.
The most important terms are:
- Premium — the monthly cost of the insurance;
- Deductible — the amount you have to pay yourself before the insurance company starts covering costs;
- Copayment (Copay) — a fixed charge for a visit to a doctor or for a service;
- Coinsurance — the percentage of costs the patient pays once the deductible has been met;
- Out-of-Pocket Maximum — the maximum you will pay yourself in a year.
Understanding these terms helps you compare different insurance offers properly.
How to choose the right insurance
When choosing health insurance it is important to look at more than the monthly payment. You have to weigh up the total cost to come. If a family rarely sees a doctor, it is sometimes better value to choose insurance with a lower monthly payment and a higher deductible.
If medical care is needed regularly, it is more sensible to look at plans with a higher monthly payment but lower costs when seeing specialists.
It is also important to check in advance:
- whether the doctors you need are in the insurance network;
- whether prescription medicines are covered;
- which clinics are available near where you live;
- whether emergency care is included;
- whether the insurance covers the whole family.
Family insurance
Most insurance companies offer family plans. In such cases a husband or wife and children can be included on one policy. When comparing family programmes it is worth looking not only at the total cost of the insurance but at the deductible for each family member and the overall family limit on your own costs.
Sometimes taking out a single family policy works out better value than buying several separate ones.
Insurance through an employer
For many US residents the most convenient option is health insurance provided by an employer. Companies often pay a large share of the cost of the policy, so the employee gets good cover at a lower price.
The set of insurance programmes available depends on the particular employer, though. Before signing anything it is advisable to study the terms of the plans offered carefully and compare them with one another.
State programmes
Some groups of the population can make use of state health insurance programmes.
The best known are:
- Medicaid;
- Medicare;
- the Children's Health Insurance Program (CHIP).
Eligibility depends on age, level of income, marital status and other factors.
When it is best to arrange insurance
Do not put off arranging health insurance after moving. Even if it seems you will not need medical care yet, unforeseen situations can arise at any moment.
In addition, many insurance plans do not take effect straight after purchase but only after a certain period. So it is better to see to your cover in advance.
Typical mistakes when choosing
Many people make the same mistakes when taking out insurance for the first time.
The commonest are:
- going only by the monthly payment;
- paying no attention to the size of the deductible;
- not checking the list of clinics and doctors;
- ignoring the cover for prescription medicines;
- not reading the terms for seeking emergency care.
As a result the policy can turn out to be much worse value than expected.
What to pay particular attention to
Before taking out insurance it is advisable to study the whole plan carefully.
It is especially important to check:
- the size of the monthly payment;
- the amount of the deductible;
- the cost of seeing specialists;
- the list of clinics;
- the cover for medicines;
- the maximum you will pay yourself in a year.
It is these figures that let you compare the offers of different insurance companies objectively.
Choosing health insurance in the United States is not simply a matter of filling in one more document but an important financial decision. A good plan helps you avoid large costs, gives you access to good medical care and gives you confidence that if illness comes, the family will not be left alone with an expensive course of treatment.
Before choosing, it is worth comparing several options carefully, studying the terms of the cover and weighing up your own needs. That approach will let you find health insurance that really does work in the interests of the whole family and gives you reliable protection in any situation life brings.
End of the article.
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