How Does the US Health System Work?
Healthcare in the United States is organized in a complex bureaucracy. While in the rest of the world healthcare facilities are owned mostly by governments or by private sector businesses, in the US a large share of hospitals and clinics are owned by private non-profit organizations.
Yet, the United States is the country that has the highest healthcare expenditures in the world. While these expenditures are covered in a large share by public payers as by Federal institutions, or State and local governments, they can also be covered by private insurance and individual payments.
At the same time, unlike most developed nations, the US health system does not provide health care to its entire population. As there is no single nationwide system of health insurance, the United States primarily relies on employers who voluntarily provide health insurance coverage to their employees and dependents.
In addition, the government has programs that tend to cover healthcare expenses for the fragile parts of the society as the elderly, disabled and the poor. These programs differ from one another, and all have a specific kind of people that are subject to.
Getting health insurance in the US is not an easy thing. Someone may think that once you have money everything is easy peasy, but in fact things are a bit more complicated. One must be very careful and look out to pick the right insurance.
Understanding health insurance
Table of Content
- How does Health Insurance work in United State?
- Understanding Of Health And Medical Insurance?
- Types of Health and Medical Insurance?
- Why do one need health insurance?
- How much does health insurance cost?
- Understanding health insurance costs
- What are HSA, HRA and FSA accounts?
- How does prescription drug coverage work?
What is health insurance?
What is health insurance exactly? It’s talked about a lot but how does it really work and why do we need it? Here’s a simple way to look at it: Health insurance is a plan, or policy, that covers a percentage of doctors’ visits and hospital bills. It exists to help offset the costs of medical events, whether they’re planned or happen unexpectedly. Health insurance may also protect us when we’re feeling good and may help keep us feeling that way through wellness programs and preventive care.
Even if you’re the picture of good health right now, you never know when you’re going to need health insurance. A car accident, an injury, a cancer diagnosis those don’t come with warnings. Not having health insurance is a risk, not only for the preservation of your health, but also your financial security.
Why do one need health insurance?
It’s a question you naturally might ask, especially if you’re generally healthy. But there are many reasons for having health insurance. First, your health matters and health insurance is a way of helping protect your health. You may wonder how it may protect you. Here are a few ways to think about it.
- Health insurance is designed to help prepare for unexpected moments in life, like accidents or illnesses.
- Without health insurance, you could be faced with paying medical bills yourself, and health care can be expensive.
- Health insurance can keep you on track with preventive care which may be covered by insurance at 100%, in many cases. Regular doctor visits may help you stay healthier over time.
- Taking care of your health needs in a timely way is important to your overall health. That’s why getting health insurance may be one of the most important choices you make.
Learn about the types of health insurance
- How do I get health insurance?
No matter what your age, finding the right health insurance plan for you is incredibly important. There are many options to consider, depending on your situation. There are federal and state programs like Medicaid (if you have a lower income) or Medicare (if you’re over 65 or if you may qualify due to a disability or special situation). There’s also short term coverage, to help fill coverage gaps for a period of time. You may be able to purchase a health insurance plan from your employer. Or you may also look into buying an individual plan, like Affordable Care Act (ACA) plans.
Most health insurance plans have a special period of time, called open enrollment, when you get to start, stop or change your health plan. This period usually happens once a year and the timing will depend on the type of plan.
- Qualifying life events
If you experience a life-changing event at any point throughout the year, it may be considered a qualifying life event. It may mean you qualify for a special enrollment period. Examples include getting married or divorced, having a baby, gaining a dependent, moving, losing a job or landing a new job and turning 65 years old.
- How much does health insurance cost?
There are many variables that impact the cost of health insurance. These can include your age, where you live, whether or not you use tobacco, how many people are covered by the plan and the type of plan you have. Choosing the best health plan for your budget will depend on your unique circumstances.
- What does health insurance cover?
Every health plan is different, so check your coverage before receiving care. Call the number on your member ID Card or sign in to your health plan account and go to Benefits & Coverage to review what’s covered under your plan.
- With a focus on health and wellness, plans may cover:
Preventive services (when delivered by a doctor or provider in-network)
Pre-existing conditions
Mental and behavioral health services
Prescription drugs
Some medical devices (like breast pumps)
Maternity care
Some costs of cancer treatment
Your health insurance coverage may range from big, unexpected events (hospital stays, emergencies) to smaller events, like routine checkups. You can look at your health plan documents to learn your exact coverage.
- How does prescription drug coverage work?
It’s important to know how prescription medications are covered under your health insurance plan, especially if you have medications you take regularly. The best way to learn about your pharmacy benefits is to understand your health insurance plan’s Prescription Drug List (PDL), or formulary. You’ll also want to take a look at drug tiers, which group prescription drugs into price categories, as well as how brand, generic and biosimilar drugs are covered.
- What are the different types of health insurance?
There are different types of health insurance plans to fit different needs. Some types of health insurance include government plans like Affordable Care Act (ACA) plans which can also be called Marketplace or Exchange plans Medicare plans and Medicaid plans. Before you choose a plan during open enrollment, it may help to review the various types of plans to get a better understanding of which type of health insurance may work best for you.
- Understanding health insurance costs
Health insurance exists to help offset the costs of medical events, whether they’re planned or happen unexpectedly. A number of factors may play a role in how much you pay for your health insurance. Some costs will vary based on your situation, like your age, where you live even some of your habits might be considered. In the United States, here are some of the ways your costs may go up or down:
- What are the types of health insurance costs?
Within the health insurance arena, there are a number of costs not paid by insurance, also known as out-of-pocket costs. Those costs include premiums, deductibles, coinsurance and copayments.
But what exactly is a premium? How about a deductible? And what’s the difference between a high deductible plan and a low deductible plan? It’s important to understand the ins and outs of how these costs work before you choose a plan.
- What are HSA, HRA and FSA accounts?
A health savings account (HSA) is a bank account you own to pay for eligible health care expenseseligible health care expenses or you can use it to save toward retirement. An HSA is offered with a qualified high-deductible health plan (HDHP) which typically has lower premiums/plan contributions and higher deductibles than a traditional health plan. If you have a health plan through your employer, the account is opened through the HSA provider chosen by your employer. You, your employer, and others can put money into your HSA up to a certain yearly limit set by the IRS guidelinesIRS guidelines.
- A health reimbursement account (HRA) is a fund of money in an account that your employer owns and contributes to. HRAs are only available to employees who receive health care coverage from an employer.
- A flexible spending account (FSA) is a spending account for different kinds of eligible expenses. There are three kinds of FSAs that may be available if you choose your own individual and family plan, or one through your employer.
- Health Care FSAs are for eligible medical expenses not covered by your health plan.
- Dependent Care FSAs cover eligible dependent care services for dependents (age 12 and under or disabled of any age).
- Limited-Purpose FSAs cover eligible dental and vision expenses if you are enrolled in a high-deductible health plan and have an HSA.
- Coverage for preventive care and diagnostic care
Why do you need to know the difference between preventive and diagnostic care? Here’s why insurance coverage is usually different based on the type of care. Preventive care, like well exams and screenings, is often covered at 100% with $0 out-of-pocket costs when you see a network provider. Coverage for diagnostic care, when you have symptoms your doctor needs to diagnose, could have additional costs and will vary depending on your plan.