Health insurance in the USA: understanding how it works

The health insurance system in the USA is entirely private. It is sometimes complicated to understand the operation and the terms used by insurers when you are a foreigner.

We give you some definitions to help you better understand the terms used by insurers.

The American healthcare system

In the United States, either health insurance is provided by the employer within the framework of a group contract (Obligation for companies with more than 50 employees), or it is up to each individual to take out health coverage with companies private insurance.

Among the health insurance contracts available in the USA, we find:

  • ACA compliant contracts (Afordable Care Act) better known as Obamacare : They are available for Americans and foreigners on proof of visa. They offer a minimum of compulsory guarantees without ceilings, and accept medical history. They are, however, quite expensive.
  • Non-ACA compliant contracts: They are available for Americans and for foreigners on proof of visa. There is a medical selection for membership.
  • IPMI contracts (International Private Medical Insurance) : They are reserved for people of other nationalities living in the USA. They offer coverage adapted to each need and a medical selection is made. They are more affordable.

ACA compliant and NON ACA compliant contracts generally include a deductible, a copay, a coinsurance , all within the limit of the Maximum out of pocket (see definitions below). Where IPMI contracts are much more flexible and understandable.

Each of these contracts can also be PPO, POS, HMO or EPO.

Understanding US Health Insurance Terms

Let’s see together what all these terms mean

Deductible:

Amount you must pay before your insurance starts paying. (Franchise).

Example: if your  deductible  is $1,000, you must pay the first $1,000 of health expenses. Your insurance only intervenes once this amount has been reached.

Copay:

Fixed contribution which applies to generalist and specialist care

It is an amount fixed in advance in your insurance contract for a type of service or medication, which you must pay out of pocket.

Example: a  copay  of $30 for a consultation with the doctor. If your insurance contract includes a  deductible , the copay  only applies once the  deductible has been reached. 

Coinsurance:

This is the part of the price of a service or a drug that you have to pay. In the sharing of costs between insured and insurance, coinsurance only applies after you have reached the deductible (deductible) and before you have reached your maximum out-of-pocket. 

Maximum out of pocket:

This is the maximum annual amount that you may be required to pay for services and drugs covered by your health insurance. Your insurance only intervenes once this amount has been reached by the deductible, copays and coinsurance disbursed.

HMO: Health Maintenance Organization

With an HMO-type contract, your coverage is limited to care provided by doctors who are part of your insurance company’s network. If you consult outside this network, you will not be covered, with the exception of emergency care. You will also need to choose a primary care physician and go through that physician before seeing a specialist.

POS: Point Of Service:

In the same way as HMO contracts, you will have to go through a general practitioner before consulting a specialist. The difference is that out-of-network care is covered.

EPO: Exclusive provider organization:

This type of contract covers care provided by healthcare professionals who are members of your insurance company’s network, but generally the network is more extensive than that of HMO contracts. Some companies may ask you for a doctor, but this is not an obligation on all contracts of this type.

PPO: Preferred Provider Organization:

PPOs are health contracts that cover all health care. However, care provided within the network will be better covered than that provided outside of this network. Hence the term “preferred provider”.

PPOs therefore represent the most flexible option, since you can consult any health professional while being reimbursed, even partially. They are the most widespread, have vast health networks and are often offered by large companies to their employees.

Several types of health insurance in the United States

As a French or foreigner living in or leaving for the United States, you therefore have the choice between several types of contracts, depending on whether you have a medical history or not.  

Take stock with a specialist to better determine your needs and to help you choose the solution that best suits you.

Advice from health insurance specialists in the USA

As a specialist in the health insurance market in the USA,  AgoraExpat offers you health insurance solutions adapted to each of your needs.

All of the contracts that we have selected for you allow you access to a third-party payment system, which saves you from having to advance the costs.

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