Health Insurance in the USA for Dummies

(Partner Article) American health insurance looks like a labyrinth. To help you get a clear idea, Eric Thoby, President and Founder of Agora Expat, Expatriate Health Insurance Broker, answers five simple questions on this complex topic.

1. What are the differences between the health insurance system in the United States and France?

Health insurance in the USA is essentially a private system, except in the case of MEDICAID (sponsored health system or medical assistant for low-income and state-dependent) and MEDICARE (federal program accessible to retired persons 65 and older).

Until the establishment of the Affordable Care Act or "Obamacare" which requires, since 2014 any tax resident in the US to have health insurance, health insurance was not mandatory.

The main differences between a generous French health care system in terms of both guarantees and costs, and the health system in the US? The cost of health in the USA is seven to ten times higher than in France.

The medical coverage systems proposed in France allow in most cases to have a 100% coverage with a user fee (or "co-insurance" if we refer to US terms) very low.

In the US, under the health insurance contracts that are offered, you should generally focus on four important elements:

• The level of the deductible (or franchise)

This is usually the amount that will have to be taken care of by you even before the insurance starts to pay you back;

These are also deductibles that apply more for medical visits, the costs of certain laboratories or medical examinations and medical prescriptions;

• The co-insurance, or "cost sharing" corresponds to the level of reimbursement of the insurance

There are five main categories of plans: catastrophic coverage plans which often only cover unforeseen medical events such as hospitalization, Bronze, Silver, Gold and Platinum.

For a "Bronze plan", the level of co-insurance (or cost sharing) is 40%, it is respectively 30, 20 and 10% for plans SILVER, GOLD and PLATINUM

• The "Maximum Out Of Pocket" (this is the maximum amount you can incur per year)

It corresponds to the total medical expenses that you could pay (sum of deductible, co-insurance, co-payments …)

Beyond this amount, the insurance will pay your expenses at 100%.

Attention, depending on the type of insurance level, you can have "maximum out of pocket" per year up to $ 6,850 / year for an individual and $ 13,700 / year for a family.

2. What budget should I budget?

In the US, according to the study published by Kayser Foundation in 2015, the average cost of health insurance for a family of 4 is $ 17,545 / year with a deductible average of around $ 5,000. This cost was in 2015 on average $ 6,521 / year for a single person. The average health insurance premium has increased by 61% since 2005 and 27% since 2010.

Depending on the state where you live, the costs may vary, but you should average around $ 500 a month for a single person and about $ 1,500 / month for a family.

Of course, some insurance can be cheaper if you place the slider deductible, maximum out of pocket, co-insurance … to the maximum.

But beware, in case of hospitalization the final score can be high because the deductible and co-insurance will first apply even before your insurance takes over. example: For a hospitalization of $ 10,000 if your deductible is $ 5,000 / year and your co-insurance is 40%, you will only be reimbursed $ 3,000.

3. Is my employer obliged to provide me with health insurance?

Within the framework of the PPACA (Obamacare) there are two aspects to be distinguished, the one concerning the "individual mandate" which concerns each individual, and the "corporate mandate" which concerns the company.

If these two parts of the health reform have been modified many times with implementations that may have been deferred, the "corporate mandate" is expected to apply as of 1^st January 2017 for any company with more than 50 employees. This mandate, with the exception of changes that may occur by then, will require the employer to provide health insurance to its employees.

4. Which insurance to choose: local or international?

Many French people are attached to the "French" coverage system – no deductible, no co-insurance and 100% reimbursement of real expenses, free choice of doctors and hospitals, worldwide coverage … However, no French or international insurance is currently in compliance with Obamacare.

Contrary to what is often said, this does not mean that you can not select this type of insurance, but it is therefore necessary to take his calculator and make the necessary calculations. Indeed, if your insurance plan is not "Obamacare compliant" (compatible with Obamacare), you expose yourself, just like someone who does not have health insurance, to the payment of a penalty .

This depends on your income and is calculated as follows:

AGI (Adjusted Gross Income) – threshold of $ 10,150 per person ($ 20,300 if you are a couple and you make your tax return in common) X 2.5%.

Examples:

1 – You are single and your AGI is $ 50,000

In this case your penalty will be ($ 50,000 – $ 10,150) X 2.5% = $ 996.25 for the year 2016

2 – You are single and your AGI is $ 200,000

In this case your penalty will be ($ 200,000 – $ 10,150) X 2.5% = $ 2,699 which is the maximum amount of the penalty in 2016 regardless of your income

3 – You are married, you have 2 children and your AGI is $ 150,000

In this case, your penalty will be ($ 150,000 – $ 20,300) X 2.5% = $ 3,242.50 for the year 2016.

When the penalty applies, it will be deducted from your tax credit when you file your tax return. If you do not benefit from a tax credit, it will be carried forward to year N + 1.IRS can not charge directly to your bank account the payment of this penalty.

Important:a penalty does not apply to persons who reside less than 330 days in the US, nor to holders of a J, F, M or Q visa (if you are in this case, you should look to the insurance side international). In contrast, the penalty applies only to persons who are U.S. citizens, permanent residents and "resident aliens". A person with a J visa for example can benefit from health coverage in the USA for around $ 60 / month. More information here.

5. And Obamacare

Many actors were able to alert you to the importance of Obamacare insurance before a deadline of 31 January.

This deadline concerned only the marketplace or exchange market for which there are actually dates of entry. The "market place" can be interesting for anyone whose income is low allowing him to receive aid from the state where he resides ("subsidies").

To date, the "market place" is closed. Only a particular event would allow to return (birth, marriage, divorce …).

This does not mean that you can not have access to insurance products "Obamacare compliant", as the offer Wellaway.

Pay attention also to the choice of your insurance and the network of doctors that it allows you to use. Some insurances have a limited network which can limit you in the choice of your doctors.

Some insurances, especially HMO Plans (Health Maintenance Organization) may also require you to visit their network and do not provide for reimbursement or support when you visit outside.

This same type of insurance may also require you to go through a referring physician (PCP – Primary Care Physician) before being able to consult a specialist.

In general, when you can, focus more on PPO Plans (Preferred Provider Organization).

These are all aspects that must be considered before choosing the insurance that is right for you. It is also for this purpose that an insurance broker finds its usefulness because it will help you select the most appropriate insurance according to your budget and guarantees for which you want to be covered.

Contrary to popular belief, it will not cost you more to go through a broker than to go directly through the insurance company, lThe broker is paid directly by the latter and not by the customer.

AGORAEXPAT advisers know the questions you are facing. We transparently select the most appropriate services and health insurance for each of our clients and support them in their specific needs with a tailor-made service.

To learn more about Agora Expat:

Make an appointment or ask for a free estimate, it's here

AGORAEXPAT – Tel: 1-917-684-3599 – SKYPE: AGOR AEXPAT – (Email protected)

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