If you’re moving to the United States, understanding how health insurance and healthcare works is really important. Here’s some key information …
It’s almost impossible to explain all the variable ways health insurance operates here, as every company or employer that offers it covers different things in different ways for different dollar amounts. So understanding what you need to have access to is vital before you take on any policy. There’s no point, for example, in signing up for coverage that does not provide the birth control method you need or cover anything related to a condition you have.
The best way I can help with unpicking how it all works is to break down some key terms that you will encounter when reading about health insurance:
Health Insurance Provider
This is where you get your health insurance from. It can be through your employer, a private company, or via the Affordable Care Act, Medicaid, or Medicare. To be able to sign up for insurance you will have to pay a premium to your provider.
A fee you have to pay every month whether you access any healthcare or not. It basically works like a monthly membership to your health insurance provider.
If you do access any healthcare services, how much you pay for it will depend on what is in your policy which may include one, or more of the following in your plan:
This is an amount of money you agree to pay before your insurance will kick in to manage the rest of the costs. How much that amount is will depend on what your policy offers but, for example, your deductible could be $1000 – which means you pay all costs up to that amount, and then your insurance covers the rest. It resets each year.
This is the maximum amount of cost you will have to pay for medical care in a year and is not the same as a deductible.
This a set fee that you pay when you access health care services. For example, you may have a copay of $20 for doctor visits, $15 for prescriptions, $40 for dental visits and $200 for ER treatment etc. Costs will differ depending on what care you’re accessing and what your provider offers – and, important to note, copays do not go towards your deductible costs.
This is a percentage cost of medical charges that is split between you and your insurance provider. It could be an 80/20 plan which means 80% is paid for by insurance and 20% is paid for by you.
Here is an Example of How It May Work
Every month, whether you use any healthcare services or not, you pay your premium. When you do use medical services, you pay the total amount up to your deductible for the year. After you’ve reached that amount your insurance will start to pay the costs you incurred as outlined in your coinsurance plan until you reach your out-of-pocket maximum for the year.
So, if you have a deductible of $1000, and a coinsurance of 80/20, and your medical bill is $3000, you pay the deductible (-$1000 leaving $2000) then your insurance will cover 80% of the $2000 that is left (so they pay $1600) and you pay $400 (your 20% coinsurance share). You then continue to pay your copays and coinsurance up to the amount of your out-of-pocket maximum, and if you reach that, the insurance will then cover 100% of your medical costs until the end of the policy year and it resets again.
This only applies if you receive medical care within your network (your insurance provider has a set group of doctors, hospitals, clinics etc that they work with). If you go out-of-network you could be liable for extra or all costs.
When I lived in the UK, the highest cost I ever incurred was £12 (about $16) for a one-off prescription. I went to my doctor to get a prescription for contraceptives (100% free) and also received some of the best hospital care, also for free, that would have gone into the tens of thousands of dollars in cost over here. So to get my head around how health insurance works it has taken a complete cultural reload. I’m still learning, so if I have made any mistakes in my article, or you can point me to further research, then feel free to contact me.
Don’t forget that healthcare is highly political and often changes when new administrations come into leadership so it’s important you keep up with the latest news about how this may affect your policy plan.
To see Zcypher’s original post, click here