Last Updated on 2023-06-24
Without health insurance, healthcare costs in the United States can be extremely expensive. Taking the example of an elderly person who contracted COVID-19 in 2020, after approximately two months of treatment, they received a medical bill spanning 181 pages, listing nearly 3,000 itemized charges, totaling over $1.1 million. However, in the United States, with appropriate health insurance coverage and seeking care from the right medical facilities and doctors, healthcare services can be obtained at relatively reasonable prices.
How Can I Get Health Insurance
Health insurance in the United States can be obtained through the following channels:
- Employer Group Insurance: This includes insurance provided by schools for students or faculty, as well as insurance offered by companies. These plans are typically managed by the organization’s Office of Human Resources. Employer group insurance is often more cost-effective than purchasing individual insurance outside and often allows for the inclusion of spouses and children.
- Individual Market Insurance:
- Marketplace Insurance: Commonly known as Obamacare, this refers to health insurance plans sold on the HealthCare.gov platform operated by the federal government in accordance with the Affordable Care Act (ACA). These plans must adhere to the basic medical coverage requirements set by the law. Insurance companies can only adjust premiums based on age, location, and tobacco use. Additionally, individuals may be eligible for premium subsidies through the Premium Tax Credit based on their income.
- Non-Marketplace Insurance: This refers to insurance plans that do not need to comply with ACA regulations. It includes plans offered by private insurance companies, insurance brokers’ websites, or health insurance plans specifically designed for international students. Insurance companies can adjust premiums or deny coverage based on factors such as pre-existing conditions. Coverage details vary based on the specific policy terms.
- Public Insurance:
- Medicaid: Also known as “Medi-Cal” or the “White Card,” Medicaid is primarily provided to low-income individuals and families.
- Medicare: Often referred to as the “Red-Blue Card,” Medicare primarily serves individuals aged 65 and older, as well as those with disabilities or end-stage renal disease.
- Children’s Health Insurance Program (CHIP): CHIP offers health insurance to children in low-income families.
Cost
Major Terminologies
Before reading about insurance in the United States, it is important to understand four key cost-sharing terms:
- Deductible: The amount that policyholders are responsible for paying out of pocket before the insurance company begins to provide coverage. It is typically accumulated within a specified period, usually within one year. Deductibles do not usually apply to copayments.
- Copayment (Copay): A fixed amount that policyholders are required to pay for each visit or treatment. Copayments may not always require meeting the deductible, depending on the terms of the insurance contract. They are similar to registration fees in Taiwan.
- Coinsurance: The percentage of costs that policyholders are responsible for paying after meeting the deductible. It is similar to the co-payment system of National Health Insurance in Taiwan.
- Out-of-pocket Maximum: The maximum amount policyholders have to pay for covered medical expenses during the policy period. It does not include expenses that are not covered by insurance or are denied. Once this maximum amount is reached, the insurance company will reimburse 100% of all covered medical expenses.
Examples
Assuming that Bob has the following health insurance plan:
- Deductible: $1,000
- Coinsurance: 20%
- Out-of-pocket Maximum: $4,000
If Bob, who has never been sick before, suddenly experiences abdominal pain and goes to an Urgent Care facility, where the copayment (with no deductible) is $50, the costs Bob would be responsible for are as follows:
- Bob would need to pay the copayment of $50.
- After paying the copayment, Bob’s out-of-pocket maximum would be adjusted to $4,000 – $50 = $3,950.
Assuming that Bob has the following health insurance plan:
Deductible: $1,000 Coinsurance: 20% Out-of-pocket Maximum: $4,000
If Bob, who has never been sick before, suddenly experiences chest pain and goes to the emergency room for an X-ray. The copayment for emergency services (with no deductible) is $250, and the allowed amount for the X-ray agreed upon by the insurance company and the hospital is $1,500. The costs Bob would be responsible for are as follows:
- Bob would need to pay the copayment of $250 (without deductible).
- Bob would need to pay the deductible of $1,000.
- Based on the coinsurance, Bob would need to pay 20% of the remaining amount, which is $1,500 – $1,000 = $500. This amounts to $100.
- In total, Bob would need to pay $250 + $1,000 + $100 = $1,350.
- After these payments, Bob’s out-of-pocket maximum would be adjusted to $4,000 – $1,350 = $2,650.
Assuming that Bob has the following health insurance plan:
- Deductible: $1,000
- Coinsurance: 20%
- Out-of-pocket Maximum: $4,000
If Bob, who has never been sick before, suddenly experiences a severe accident and requires surgical treatment with a total medical cost of $21,000. The costs Xiao Ming would be responsible for are as follows:
- Bob would need to pay the deductible of $1,000.
- Based on the coinsurance, Bob would need to pay 20% of the remaining amount, which is $20,000. This amounts to $4,000.
- Since $1,000 + $4,000 exceeds Bob’s out-of-pocket maximum of $4,000, Bob would only need to pay $4,000 in total.
- As Bob has already reached the out-of-pocket maximum, for the remainder of the insurance period, Bob would not need to pay any additional costs for any covered services.
Claim Process
Most health insurance plans have separate claim processes for in-network and out-of-network services. In-network refers to healthcare providers who have a contractual agreement with the insurance company, resulting in higher reimbursement rates. Out-of-network providers may have lower or no reimbursement rates.
In-network
The claim process for in-network services in the United States is similar to the reimbursement process under Taiwan’s National Health Insurance.
- After receiving medical treatment, the healthcare provider submits a claim form to the insurance company.
- Once the insurance company processes the claim, they issue an Explanation of Benefits (EOB) to the insured individual.
- After receiving the allocated payment from the insurance company, the healthcare provider sends a medical bill to the patient. In the case of in-network services, the healthcare provider cannot bill the patient for any amounts that the insurance company has denied based on medical necessity or appropriateness, unless it is explicitly stated as a non-covered item in the insurance policy or the insurance company has provided prior notice.
- Upon receiving the medical bill, if there are no discrepancies with the information provided in the EOB, the patient should pay the remaining balance (including deductible, copayment, coinsurance, and any non-covered medical expenses). If there are any concerns or questionable charges, it is advised not to make payment right away, but rather proactively communicate with the insurance company or healthcare provider. Sometimes, medical bills are sent before the insurance and provider have reconciled or processed the reimbursement.
Out-of-network
The reimbursement process for out-of-network services in the United States primarily follows a pay-and-claim model.
- After receiving medical treatment, the healthcare provider will issue a medical bill to the patient.
- The patient is responsible for paying the bill and then submitting a claim form to the insurance company. The insurance company reimburses the eligible expenses and sends an Explanation of Benefits (EOB) to the insured individual.
- The insurance company may deny reimbursement based on factors such as non-covered items, lack of medical necessity, or exceeding the Allowed Amount.
Other Terminologies
Allowed Amount
The maximum amount that the insurance plan will pay for a covered medical service. It is also referred to as “Eligible Expense” or “Payment Allowance.” This amount is typically the negotiated rate between the insurance company and in-network healthcare providers, hence it is also known as “Negotiated Rate” or “Network Price.” When receiving services from out-of-network providers, if the charges exceed the Allowed Amount, the individual may be responsible for the balance billing.
Cost Sharing
The total amount of deductible, copayment, and coinsurance.
Maximum Benefit
The maximum amount that the insurance company will reimburse the insured individual for covered expenses. Depending on the insurance policy, it can be limited to a single occurrence, within a policy year, or for a lifetime. If there is no limit, it is considered unlimited. For example, coverage for orthodontic treatment for minors may be limited to a one-time reimbursement in a lifetime.
Premium
The cost of the insurance plan. Usually paid monthly, but there are also bi-weekly payment options. Insurance plans with low deductibles, low copayments, low coinsurance, and low out-of-pocket maximums typically have higher premiums.
Coverage
The specific medical items and services that are included and eligible for reimbursement under an insurance plan.
Waiting Period
A certain period of time must pass before certain illnesses or treatments are covered and eligible for reimbursement.
Under the Affordable Care Act (ACA), the waiting period for employees cannot exceed 90 days. However, for non-ACA-regulated health insurance, there may be longer waiting periods for certain healthcare services. For example, treatments for cancer and cardiovascular diseases typically require a waiting period of 1-2 years. Waiting periods for maternity care can be as long as 10-12 months.
Dental insurance, which is not bound by the ACA, often has long waiting periods. For example, basic treatments (Class II) typically require a waiting period of 6 months, while major treatments (Class III) may require a one-year waiting period.
Pre-existing Conditions
Some health insurance plans may deny coverage for pre-existing conditions, which refer to illnesses, injuries, or medical needs that existed prior to purchasing the insurance.
Group health insurance plans offered by employers or plans regulated under the Affordable Care Act (ACA) are prohibited from discriminating against individuals with pre-existing conditions.