How does the state health insurance system work?
The USA does not have a national health insurance system, unlike many European nations, thus its citizens must take out private health insurance. A few categories of people are covered by Medicare and Medicaid – the closest to a national system that the USA possesses. Expats are usually not eligible for registering with this system, but can sign up with private providers. Healthcare in the USA has undergone a substantial overhaul in the last decade, with the introduction of the Affordable Care Act, also known as Obamacare.
For American citizens who are 65 or older, and those who have severe disabilities, Medicare will provide cover. Medicaid covers those on low incomes. The ACA was designed to:
- provide universal medical coverage, though still with an obligation to take out insurance (individually or through an employer)
- create online health insurance websites which sell only ACA-compliant insurance plans
- extend Medicaid to people with incomes commensurate with the US federal poverty line (FPL)
- guarantee minimum essential health coverage
More widely, insurance plans take one of the following forms:
- government-sponsored plans (such as Medicare and Medicaid)
- employer-sponsored insurance (e.g. group-based retiree coverage)
- individual plans (e.g. state marketplace coverage, student plans)
- plans approved by the Department of Health and Social Services (e.g. Medicare Part C).
If you are coming to the US to work, and become a resident, you will need a plan which provides “minimum essential coverage” or MEC, unless you qualify for an exemption. The legislation has been rapidly changing, so check if any insurance plans from your home country count as MEC: they may do.
You will be classed as a tax payer as soon as you receive your Green Card. However, your visa does not depend on compliance with MEC: you do not need to show that you have MEC coverage in order to qualify for a Green Card.
The US Embassy in London states:
“Medical insurance is strongly advised [before moving to the USA]. Only emergency cases are treated without prior payment and treatment may be refused without evidence of insurance or a deposit. All receipts must be kept in order to make a claim.”
Who is eligible for state healthcare?
If you are an expat, and you have recently arrived in the USA, whether or not you must sign up to an ACA-compliant policy will depend on your location: it varies from state to state. Up to January 2019, expats had to take out ACA-compliant policies or risk being fined, but the system has now changed.
If you are working in a state where the ACA mandate is not in place, you can choose your own policy.
Some states, such as Massachusetts, Vermont and New Jersey, have returned to the previous system. If you work in a state such as these, in which the mandate has been restored, you have two choices:
- signing up with an ACA-compliant policy
- signing up with a different policy and paying the penalty (which can be cheaper overall than taking out ACA insurance)
If you are a seconded employee (working in the USA for a company that has been established elsewhere) you will not be registered with the US healthcare system and you will need to take out private medical insurance. If you have an existing policy, check with your provider to see if you are still covered while working in the USA.
If you are an expat, as long as you have cover for one day of each month, then you are held to be abiding by the terms of MEC.
How do you apply to join the state health insurance system?
If you are working for a US company, they will arrange health insurance for you.
If you are self-employed, you will need to take out cover through either the Health Insurance Marketplace, or a private provider.
What is covered by the state health insurance system?
If you opt for an ACA-compliant scheme, you will be able to choose between:
- Preferred Provider Organizations (PPO): doctors’ visits inside and outside the ACA network and a choice of specialists without referrals
- Point of Service Plan (POS): doctors’ visits inside and outside the network, with referrals needed for specialists
- Health Maintenance Organizations (HMO): healthcare within the network and emergency services outside it
- Exclusive Provider Organizations (EPO): specific specialists and hospitals within the network
Within this system, there are also a range of ACA-approved plans which provide different levels of coverage, ranging from basic cover and emergency cover, to more comprehensive cover for those people who may need regular treatment.
Vision care is usually not covered by basic insurance plans, and prescription drugs may not be covered either, in which case you must make out-of-pocket expenses.
Are retirees covered by state medical insurance?
Retiree expats may not be eligible for Medicare and should take out private cover, either via the Health Insurance Marketplace or through another private provider.
Are students covered by state medical insurance?
Many US universities offer subsidized health insurance, so check with your educational establishment to see if it is possible to register under one of their schemes. For example, New York University offers a sponsored student health plan for F-1 and J-1 visa holders, which will also cover your dependants (spouse/partner, and children up to the age of 26).
Will your family be covered by your insurance?
If you are a student and eligible for a university-sponsored health insurance programme, your dependants will be covered.
If you are applying for either ACA-approved coverage or full private cover, you can opt for a plan which covers family members as well as yourself. If you are paying American taxes, and your dependants appear on your income tax form, then you must take out cover which satisfies the conditions of MEC.
If you have a fiancé(e), they are unlikely to be covered under your medical plan and you should look at taking out separate cover.
Is dental treatment covered by state health insurance?
Most basic insurance packages do not include dental care, although you can opt for a plan which does include dental treatment: check this with your provider.
Currently, around two out of three Medicare recipients do not have dental coverage, and out-of-pocket treatment is very expensive.
What are the contribution rates for state health insurance?
For a monthly basic package on an ACA-compliant scheme, a man in his 30s would expect to pay around $250-400. A couple of a similar age would expect to pay $550-800, and a family package will cost over $1,500.
For ‘gold’ coverage (the most expensive), a package for a man in his 30s would typically start at $500 and for a family, this would be over $2K per month.
According to a survey conducted by Kaiser, for group insurance, on average employers paid 82% of the premium ($5,711 per annum). Employees paid the remaining 18%, or $1,186 per annum.
Why buy private health insurance?
The USA effectively does not have a comprehensive state medical insurance scheme, so private cover of some kind is essential.
What is covered by private health insurance?
Coverage depends on how comprehensive your plan is, but any basic plan must be MEC compliant. The higher the premium, the more expensive your plan will be.
How much does private health insurance cost?
Private health insurance in the USA is expensive, particularly relative to Europe. With Bupa Global, an expat couple in their 40s and 50s could pay over $20K per annum.
For an individual applicant in their 40s, Bupa plans start at around $5K per annum. With Kaiser, single annual coverage is around $5K per annum.
Note that budget plans may see a sudden sharp increase in premiums after you have had them for a year or so. Health insurance premiums are also rising.
Which companies offer private health insurance?
The big international providers operate in the USA, including:
- Bupa Global
- Cigna Global
Glossary of health insurance terms
Affordable Care Act/Obamacare – legislation designed to provide universal but insured medical coverage
MEC – minimum essential coverage
Medicaid – cover for those on low incomes
Medicare – American citizens who are 65 or older, and who have a severe disability