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Understanding health insurance in the USA

Updated 7 Mar 2013

Healthcare in the USA is really a mixed bag. On one hand, the USA represents some of the best medical research facilities in the world and on the other, there are numerous underfunded practices and access is limited, especially for low-income earners.  

The standard of healthcare facilities in the USA is fairly comparable in quality to those found in Western Europe even though doctors’ offices can appear rather cluttered and old-fashioned at times.

The USA does not have public healthcare options like you would expect to find elsewhere. Instead there are insurance plans run by federal and state institutions in the USA. However, these insurance plans are generally only accessible to US citizens who are underemployed, unemployed or earn an income which is less than median wage.

Expats moving to the USA must ensure that they are properly insured and this means investing in a private health insurance plan. Private healthcare is provided by employers in the USA. Expats can also purchase health insurance cover for themselves individually.

Healthcare in the USA

In cosmopolitan parts of the USA such as New York, Boston and Los Angeles there are a large number of foreign communities. The healthcare systems in these places often have facilities and staff to cater for people who speak languages other than English. 

As there are large Spanish-speaking communities located throughout the USA, Spanish is the most common non-English language that is reflected in the healthcare infrastructure. The number of Chinese signs and staff have also increased, especially in certain metropolitan areas where there are large Asian populations, such as New York and San Francisco.

Waiting times can be rather intense, depending on facility type, day of week, and staff available. Patients are first seen by a nurse or PA (Physician’s Assistant), who determines the reason for the visit and takes notes on simple facts such as body weight, height, diet, previous illnesses, medication, and allergies. Based on these notes, the doctor performs the full examination and diagnosis.

As with many other services, expats need to know their Social Security Number (SSN) when scheduling a doctor’s appointment. The SSN is important as it has to be written down on the pre-registration forms, which are filled out in the waiting room before the initial exam. In addition, expats have to show a health insurance card. If they are not insured, the practice will either require a credit card to pay for the visit or will bill the patient after the visit.

Types of health insurance in the USA

Expats who work in the USA will typically have insurance provided by their company. Depending on size and type of company, it might take them up to three months from the time they start employment until they receive their insurance card.

For expats who do not yet work, it is a good idea to use a travel insurance policy issued by their home country. Travel insurance policies might require the patient to cover the bills first and send the receipts to the insurance company in order to be refunded the full amount once everything is reviewed. It is important to remember that travel insurance policies are typically limited to a certain period of time, usually from one to five years, in which they can insure expats living abroad.

Health insurance policies issued by a company generally require a co-payment, meaning whenever the patient sees a doctor, a deductible fee will need to be paid. Some insurance companies have lower co-payments than others.

In general, it is recommended that all expats have some form of health insurance because without a policy a simple visit to the doctor can turn out to be more expensive than initially thought. For example, patients who simply want to refill their prescriptions from back home but have not yet seen a doctor in the US will have to go through a new exam with a practitioner and pay the full price if they are uninsured.

If health insurance is provided by an expat's employing company, it is not necessary for them to obtain an individual healthcare plan. In most cases, employers provide a basic health insurance policy, which covers expats for everything except eye care and dental care. For this type of coverage, nothing is deducted from the expat's salary. In the case of more comprehensive health insurance policies, some employers may automatically deduct a small fee from an expat's salary each month.

What is covered by health insurance policies in the USA?

Perhaps the biggest difference between healthcare in the USA and other countries is the way insurance providers specialise on networks. Doctors who work with a certain insurance provider are called in-network providers while doctors who do not work with that particular insurance provider are known as out-of-network providers.

Financially, it is important to understand this difference as patients are fully covered for exams when they visit in-network providers but they are not fully covered when they see a doctor outside of their insurance network. This also means that the cost of treatment rises or that certain parts of the treatment are not covered at all by their health insurance policy, which means that they will have to cover the costs themselves.

Some insurance plans only cover patients for a certain amount of medical examinations per year. With some insurance policies, only a certain percentage of the cost of emergency room visits or overnight hospital stays are covered and sometimes these are not covered at all.

When it comes to medication, most will require a prescription, with the exception of over-the-counter medicines, such as cold and flu drugs. The insurance provider will cover a certain percentage of the price of prescription medicines.

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