Health Insurance in the United States: Understand How It Works

Discussing health insurance in the United States often involves complexity and many questions. Even Americans themselves struggle to fully understand how the system works.

To help, we’ve gathered information to assist you in understanding how it impacts your life.

Are there public health systems in the United States?

There is no public health system like Brazil’s SUS.

There are basically two federal systems:

• Medicare: Available to those over 65 years old. Only permanent residents for at least 5 years can access Medicare. There are minimum credit requirements based on employment history.
• Medicaid: Designed for low-income individuals or those with chronic diseases; coverage varies by state. It can be limited, as in Florida, or expanded, as in New York. This plan primarily serves children, pregnant women, and individuals with physical or mental disabilities.

How can most people acquire health insurance?

Each U.S. state manages its health systems differently. Insurance companies offer plans according to state requirements, but most states follow the Obamacare standard.

What is Obamacare?

The U.S. healthcare system entered a new era with the passage of the Affordable Care Act (ACA), known as Obamacare, in 2014. It is not a health insurance plan but a government program that requires insurance providers to include 10 essential benefits:

• Preventive
• Ambulatory
• Emergency
• Pediatric
• Hospitalization
• Mental health treatment
• Prescription drugs
• Rehabilitation
• Laboratory services
• Maternity

Insurance companies began offering coverage for all types of illnesses without limits, including terminal conditions, chronic conditions, or pre-existing conditions, as well as maternity coverage at any stage of pregnancy.

Given the benefits offered by insurers, it was expected that their cost would be prohibitive for a large part of the population.

The strength of Obamacare is that, alongside these requirements, the government also started offering subsidies to help those who are less financially able. Eligibility for these subsidies is based on income reported on tax returns.

Between 2015 and 2018, health insurance became mandatory for all residents of the country.

Those without health insurance would be subject to a penalty of $645 per person, or up to 2.5% of their income. This was verified during tax filing.

In 2018, President Donald Trump removed the mandate, causing significant controversy as it was argued that only those in need should not bear the cost of health insurance.

A lawsuit by governors from 27 U.S. states against Trump’s decision is ongoing.

Who can receive subsidies?

Subsidies are available to those with valid immigration status that allows them to reside in the country.

What are the plan prices?

Prices vary according to your declared annual household income. Below is a table of the minimum income required to obtain Obamacare coverage. The higher the income, the lower the subsidy.

Minimum Household Income:

• $13,000 for 1 person
• $17,000 for 2 people
• $22,000 for 3 people
• $26,000 for 4 people
• $31,000 for 5 people

What changed with the new President Joe Biden?

In January 2021, President Joe Biden approved an amendment to the American healthcare system due to COVID-19. With high unemployment and illness rates, the American Rescue Plan (ARP) was enacted, providing financial assistance to residents, increasing health insurance subsidies, extending the application period for insurance, and eliminating the Public Charge rule.

Does Obamacare affect my immigration process for a Green Card?

President Biden’s American Rescue Plan also abolished the Public Charge rule and stated that health insurance information will no longer be required in the immigration process. Learn more here and here.

Is the American healthcare system good?

U.S. medicine is generally more curative than preventive.

With the introduction of Obamacare plans, preventive care was implemented free of charge once a year, including mammograms and laboratory tests.

How is coverage under Obamacare insurance providers?

Major health insurers in the U.S. offer very similar basic services. In addition to networks of specialist doctors, laboratories, and diagnostics, they all provide hospital services including outpatient care, admissions, surgeries, ICU, and more. All are regulated by the government, so differences among them lie in the networks of hospitals and doctors and the types of plans offered, with monthly premiums varying according to covered services.

In most cases, there is an agreement that in the event of accidents, urgencies, and emergencies, you will receive care even if your insurer is not present in the state where you are. There will be internal account adjustments backed by American law, and you will only pay what was agreed with your insurer.

What is the difference between emergency care in hospitals and urgent care clinics?

Hospital In American culture, emergencies are understood as life-threatening situations, usually transported by ambulance to the hospital.

For any other type of emergency, you need to go to an urgent care clinic.

Urgent Care Clinics – Urgent Care/ Walk-In Clinic Urgent care clinics are walk-in facilities that handle non-life-threatening issues such as flu, fever, sore throat, infections, burns, cuts, and general aches. Life-threatening emergencies are handled by calling an ambulance to transport the patient to the nearest hospital.

Most urgent care clinics operate only during business hours. It’s financially more advantageous to wait until morning and go to an urgent care clinic rather than going to a hospital for minor issues. Some clinics may be part of a hospital network and located within the hospital.

Are there categories of plans with insurers?

Health insurance plans are divided into HMO vs. EPO vs. PPO:

HMO (Health Maintenance Organization) HMO plans are more economical as they are managed by general practitioners who help monitor costs and refer to specialists only when necessary. Without a referral from your general practitioner, you won’t have benefits for specialists.

EPO (Exclusive Provider Organization) As an EPO member, you can use specialists and hospitals within the EPO network, but you cannot go outside the network for care. There are no benefits outside the network.

PPO (Preferred Provider Organization) As a PPO member, you can use any doctor of your choice, even those not in the insurer’s network. Monthly premiums are generally higher compared to EPO plans.

Even if paying the plan premiums, do I still have to pay for services?

Yes, all plans require you to share the cost of services used.

Here are the terms used by insurers:

• Copay: A fixed amount paid for a specific medical service. The amounts vary significantly depending on the chosen plan. Copay is paid when you arrive at the location for care, before any medical or laboratory procedures are performed.

• Deductible: This is the amount you must pay out-of-pocket before your insurance begins to cover costs. Deductibles can range from $0.00 to $12,500 for plans without subsidies. For example, if your deductible is $2,500, you pay for the first $2,500 of medical and hospital services. After reaching this amount, your insurer will cover all costs for the rest of the contract period.

• Out-of-Pocket: The maximum amount you will spend during your health insurance contract, including deductible and copay.

• Co-Insurance: A percentage used by insurers to define your share of the costs of care, always respecting the limit set by your Out-of-Pocket. Co-insurance usually comes in forms like 60/40 (60% paid by the insurer, 40% by you), 70/30, 80/20, and 90/10.

How to calculate the final amount to be paid?

It's simple! From the total expense, subtract the amount of your Deductible. From the result, you will pay 20%, up to the maximum of your Out-of-Pocket. After reaching the Out-of-Pocket limit, all remaining costs will be covered by the insurer.

Authored by 2easy from WMB Digital Marketing.

At 2easy Insurance, we are committed to helping you understand your health choices. Learn more about our healthcare services and how we can protect you during critical times. Your health is our priority.