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Health insurance in the USA
Health insurance in the USA is a colorful patchwork of private providers and government programs. This guide will lead you through the complex system of American health insurance and give you important tips on finding the right offer.
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The health system in the USA
The American healthcare system is unique in the world. There is little government regulation but a wide range of private providers. US citizens who are not covered by government programs are responsible for their own health care. Unlike most other industrialized countries, however, the USA does not have mandatory health insurance.
Public health care in the USA
The public health insurance system in the USA has its roots in the Social Security Act, which was passed in the 1930s in response to the Great Depression and was designed to protect Americans from poverty in old age.
With the creation of Medicare and Medicaid in 1965, social security systems were expanded to include health care. However, only certain groups of people benefit from the public health care insurance programs in the USA.
Medicare
Medicare provides medical care for seniors and those with serious pre-existing conditions. Every US citizen 65 years of age or older is eligible for benefits under the government health insurance program. Furthermore, persons with a recognized disability or acute kidney failure are protected by the Medicare program.
Medicaid
The US public health insurance system also includes the Medicaid welfare program. This is a welfare-type benefit that primarily supports children and people with low incomes. To receive Medicaid benefits, Americans must prove their financial need.
Tricare
Tricare, the US Department of Defense's health care program, is the third pillar of government health insurance in the United States. It also originated in the 1960s and provides civilian health benefits for active and former members of the US military and their dependents.
Private health care in the USA
Most Americans have private health insurance through their employer. Usually, these are group health insurance plans that are paid for in part by the employee and in part by the employer. In some cases, however, employers only provide health insurance, and the premiums are paid entirely by the employees.
A major disadvantage of this form of insurance coverage is that it is tied to the employer and is often terminated if the employee loses their job. Those who do not have the option of insuring themselves through their employer must take out their own private health insurance.
Problems of the US healthcare system
In health care, there is generally little government interference in the United States. The market tends to be driven by economic interests. Of course, this also creates many problems.
On the one hand, the United States is known for very good and modern equipment in clinics and hospitals, but it is also notorious for its extremely high healthcare costs. Medical treatments and drugs cost significantly more in America than in other industrialized nations. And that, in turn, leads to high costs for health insurance in the USA.
Different insurance companies offer very different ranges of benefits. Cheaper policies often do not cover all treatments, so many Americans are not adequately insured. Some 29 million citizens even choose not to take out health insurance at all.
Doctors and hospitals are required by law to treat uninsured patients in emergencies. In such cases, patients have to pay the costs out of their own pockets, which often leads to horrendous debts. Medical treatment or hospital stays that cannot be paid for are the most frequent cause of private insolvencies in the USA.
High healthcare costs in the USA
The high cost of health insurance in the USA is caused by a number of factors:
Rising drug prices
Since the 1950s, drug prices in the United States have continued to rise. Today, prescription drugs in the USA cost more than 2.5 times as much as in other industrialized nations. American pharmaceutical companies attribute the rising prices to the high cost of medical research and the development of new drugs.
Potential lawsuits
Hospitals and medical practices in the USA are free to determine their own prices. Losses due to potential future lawsuits seeking compensation payments are already factored into the equation. As a result, medical treatment in the USA is very expensive. Even simple products such as handkerchiefs or plastic cups come with a hefty price tag in American clinics.
Delayed treatment
Because many Americans have insufficient or no health insurance, medical checkups and treatments are often avoided or put on the back burner to save money. However, this can lead to diseases remaining undetected and getting worse. In the long term, this means even higher treatment costs in many cases.
Unhealthy lifestyle
Many Americans eat an unhealthy diet and exercise too little. According to the U.S. Centers for Disease Control and Prevention (CDC), about 42 % of adults in the United States are obese. Being overweight leads to an increased risk for chronic diseases such as arthritis or so-called civilization diseases such as type 2 diabetes. The resulting medical costs are another burden for the American health care system.
Health insurance for USA immigrants
If you plan to immigrate to the USA, taking out health insurance is an important item on your to-do list. Since the US health insurance market is very diverse and opaque, it is advisable to take out travel health insurance for the first few months and then look for the right offer carefully.
One useful source of information is the US government's Marketplace. It was launched when the healthcare reform of 2010, better known as "Obamacare," came into effect. On the platform, US citizens and Permanent Residents, as well as holders of other visas and residence permits, can find suitable insurance coverage.
Many health insurance policies in the USA do not cover all services. For example, additional dental insurance is often required for dental treatment. This is why it is important to check each offer carefully before signing a health insurance policy to see if it covers your needs.
Ask yourself the following questions before purchasing private health insurance in the United States:
- Can doctors, hospitals, and pharmacies be chosen freely, or is the offer tied to specific facilities?
- Does the offer include all prescription drugs, or are there restrictions?
- Does the offer include medical treatment by specialists (e.g., dentist, ophthalmologist)?
- Does the offer cover home health care or nursing home costs?
- Does the offer include special treatments such as physical therapy or psychiatric care?
- Are there any deductibles or co-payments, and how high are they?
Your question about health insurance in the USA has not been addressed yet? Then you may find the answer in our FAQ:
Green Card holders age 65 and older are also eligible for Medicare benefits. However, they must have been a Permanent Resident for at least five years and have registered their residence in the United States for five consecutive years. Furthermore, they should have worked in the United States for at least ten years. Green Card holders with less than ten years of work in the USA can still apply for Medicare but must pay an additional contribution, with the amount depending on the number of years worked.
No, EU citizens automatically lose health insurance coverage when they leave the European social security system. When traveling to the USA, it is advisable to take out an international health insurance policy first and look for a suitable health insurance policy in the United States later.
If you want to spend your retirement in the USA, you should inform yourself well about the topic of health insurance beforehand, so that you can avoid high treatment costs in case of illness. We recommend taking out a long-term health insurance policy for seniors in one's home country. Usually, they are valid for a certain period of time (in most cases, one year, a maximum of five years).
To study in the USA or for any other extended stay (e.g. internship, au pair), young people need sufficient health coverage to be protected in case of emergency. Here, too, there are special travel insurance policies that can be taken out for a period of up to five years.
More guides for USA immigrants
Taking the step into a new life in the USA means mastering a few challenges at the beginning. Our guides will provide you with valuable information: learn everything you need to know about credit history, bank accounts, retirement, and the driver's license in the USA.
