Unlike many other countries where most healthcare is free via national health services, in the United States, you need to cover the costs of healthcare by paying for it yourself or getting insurance. Healthcare can be very expensive in the US. A single visit to the doctor can cost hundreds of dollars and a three-day stay in hospital can cost thousands or tens of thousands of dollars. If you do not have health insurance in place, you could end up wiping out your entire savings when the need for healthcare arises, unless you are extraordinarily wealthy and can afford the cost of both basic healthcare and emergency or chronic medical care. On the other end of the scale, low-income families could qualify for Medicaid, and people over 65 years of age typically qualify for Medicare.
How Health Insurance Works
When you have health insurance in place, you can avoid hefty out-of-pocket costs. It works like this. You pay an upfront premium to a health insurance company. Seeing as most people are healthy for most of the time, the premiums you and others pay to the insurer are used to cover the expenses of the small number of enrollees who need healthcare when they become sick or injured. There are lots of different types of health insurance plans in the US, and each one comes with its own rules and arrangements.
Private and Public Health Insurance
The two most common types of health insurance in the US are private and public insurance. Both have different provisions. Which type is best for you depends on your situation. The main difference between private and public health insurance is the former is provided by individual companies like a private insurance firm or an employer while the latter is run by local, state, or federal governments.
There are two types of private health insurance plans. The first is an employer-sponsored health insurance plan, which is provided by employers to their employees. Under the Affordable Care Act, more commonly known as Obamacare, employers who have fifty or more full-time employees must provide insurance coverage. The second type of private health insurance is an individual plan, which you purchase yourself, independently of an employer or organization. However, for those seeking broader coverage beyond traditional private plans, consider a Medicaid supplemental benefit plan, which can offer tailored solutions to enhance healthcare coverage and address specific needs.
As for public healthcare insurance plans, they are typically available via the Medicare and Medicaid programs. However, if you do not qualify for either, you could still be eligible for specific group insurance policies in some states.
What Health Insurance Plans Cover
While the precise benefits that are covered in a policy will depend on whether you have public or private health insurance and which insurance provider you go with, many benefits of health insurance plans have now become standardized, thanks to the Affordable Care Act. For instance, some health insurance plans used to cover the cost of medication while others did not. Now, every health insurance plan in the US is legally required to provide essential benefits. They include:
- Maternity and newborn
- Emergency services.
- Mental health services.
- Outpatient care.
- Prescription medication.
- Substance abuse treatment.
- Rehabilitation services.
- Laboratory tests.
- Preventive services.
The Cost of Health Insurance
The exact amount you pay for your health insurance depends on the type of policy you take out, which state you live in, which benefits are included in the policy, and other factors. When you take out an insurance plan, the first cost you pay is the premium. That is your main upfront expense, but there are usually additional costs to pay when you access care. Things like deductibles, coinsurance, and copays all in some way represent your share of out-of-pocket costs when you receive healthcare. Generally, the higher the amount you pay in your premium, the less you will have to pay when you need to access care.
