One of the biggest concerns for expats relocating to the US is the cost of healthcare.
After growing up with a free National Health Service, it is daunting to move to a country where we hear regular horror stories about emergency care resulting in eye-watering bills.
Let’s work through how US healthcare works, what insurance options are available, and the best precautions to take as a non-American national moving to the country.
How The US Healthcare System Works
In America, there is no state healthcare system – everyone should hold insurance to protect them against high costs of care, including emergency treatment and calling an ambulance.
There are systems in place to support low-income residents:
- Medicare – federal health cover for retirees and disabled people.
- Medicaid – health cover for people on low-incomes.
Larger employers are required to provide health insurance for their staff, although these might not necessarily cover all types of treatment. Policies also usually have a ‘deductible’ element.
In the US, a deductible is equivalent to an insurance excess in the UK and is the value you have to pay for before your insurance coverage takes over.
The terminology you need to know to understand US healthcare includes:
- Your premium – the monthly cost of your policy.
- Deductible – like an excess that you have to pay before coverage takes effect.
- Co-insurance – how much you must pay after your insurance pays out for a share of the bill
- Co-pay – the payment you need to make at a GP visit.
Most expats moving to the US for work will receive a health cover plan from their employer, but it is essential to understand the terms before you pack your bags. Some employers pay for all of the premium, whereas others pay only part, and you will still have a contribution to make.
Health cover paid for by an employer is called Employer-Sponsored Insurance (ESI).
If you are self-employed or employed by a smaller employer who doesn’t offer health insurance, you will need to take out a plan yourself.
The Affordable Care Act (ACA) used to dictate that you must select a plan from the ACA Health Insurance Marketplace each year, although this is no longer required in all states.
That means that, even if you hold a comprehensive international health insurance policy that will cover you in the US, you might need to take out another policy or pay a state fine if that policy is not considered ACA-compliant.
Average Costs Of Medical Treatment In America
US medical treatments tend to be more expensive than most places in the world and are anticipated to continue to rise at 5.8% per annum and make up 20.1% of GDP by 2025.
Some approximate average costs, in comparison with those in other countries (all shown in USD), are:
|Treatment||Cost in the US||Cost in Australia||Cost in Spain|
Standards of healthcare in America are reasonably high, although not generally expected to be of any higher quality than in any other country, so it is notoriously expensive if you don’t have adequate insurance, even for standard procedures and prescriptions.
The average American spends $1,200 a year on prescription medications, which all depend on which medication is prescribed, and which drugs are covered by their health insurance.
Some costs can be extremely high; for example, cancer treatment drugs cost an average of $10,000 per month (around £7,688) which, if not covered by insurance, might be impossible to afford.
It is, therefore, essential to have sufficient insurance. You should consider several factors when deciding what level of cover to buy, such as what conditions or circumstances are covered by your employer’s healthcare policy, other treatments such as dental and glasses, and emergency cover should you have an accident or become suddenly unwell.
The below table shows some of the most common medical costs and the average charge for uninsured patients.
Note that these are averages, and the actual value payable can vary significantly depending on the hospital, doctor or state.
|Hospital Treatments||Average Cost $||Average Cost £|
|A&E Tests||$100 – $500||£77 – £384|
|Overnight A&E Stay||$5,000||£3,840|
|Breast Cancer Treatment||$15,000 – $300,000||£11,530 – £230,600|
|Pancreatic Cancer Treatment||$50,000 – $200,000||£38,400 – £153,700|
|Childbirth||$9,000 – $17,000||£6,920 – £13,100|
|Cesarean Section||$14,000 – $25,000||£10,800 – £19,200|
|Minor Broken Wrist||$500||£384|
|Hip Fracture||$13,000 – $40,000||£9,990 – £30,750|
|Broken Ankle||$17,000 – $35,000||£13,100 – £26,900|
|Hernia Repair||$3,900 – $12,500||£3,000 – £9,600|
|Tonsillectomy||$4,100 – $6,400||£3,150 – £4,920|
|Doctors Treatments||Average Cost $||Average Cost £|
|Physiotherapy||$50 – $350 per appointment||£38 – £270|
|Prenatal Care||$100 – $200||£77 – £154|
|Doctors Appointment||$100 – $200||£77 – £154|
|Blood Tests||$100 – $3,000||£77 – £2,300|
|Cholesterol Test||$50 – $100||£38 – £77|
|Medications||Average Cost $||Average Cost £|
|Diabetes||$200 – $500||£154 – £384|
|Cholesterol||$30 – $350||£23 – £270|
|Allergies||$20 – $100||£15 – £77|
Comparison Of US Health Insurance
The more comprehensive a health insurance policy, the higher the premiums. Insurers will also evaluate your application based on factors such as:
- Country of origin
- Your age
- Medical history
While it might be tempting to choose a lower-cost option, this can be expensive if you do become ill and require treatment or testing that is not covered by your plan.
As we have seen, the costs of even standard medications can be very high, and much more costly than a health insurance plan. Average costs vary between states, but as an indication:
|Applicant||Average Monthly Cost $||Average Monthly Cost £|
|30 Year Old Man||$563||£433|
These prices are monthly indicative premiums and do not include deductibles or co-payments.
As a rough example, these average costs might consist of a $750 deductible payable on every treatment (around £577) and exclude dental treatment, optician treatments or glasses.
The Affordable Care Act And Expats
This act brought about significant changes to the US healthcare system, designed to equalise accessible care for people less able to afford high-cost insurance policies, and those not in employment.
Changes that impact expats include:
- The requirement for an employer with over 50 staff to provide an ACA-compliant healthcare policy, provided you work over 30 hours per week.
- Some states require expats to hold an ACA-compliant health plan, although others do not.
- If no mandate exists, you can choose any health insurance provider, whether or not they are ACA-compliant.
- In some cases, it may be more cost-effective to choose a non-compliant policy and pay the penalty, rather than purchasing a more expensive ACA policy.
If you are travelling to the US on a short-term basis, you should ensure you take out sufficient travel insurance and healthcare cover before visiting the states.
Should you be working in America on a secondment basis, you may still be covered by the government in your home country, although it is still very wise to take out an insurance policy.
ACA Expat Penalties
If you travel to the US as a non-resident – for example, to study, or on a temporary work placement, the ACA Penalty does not apply to you.
However, once you become a resident, you will need to check whether ACA Penalties apply in your state – and if so, decide whether to take out ACA-compliant health insurance, or pay the fine.
A good rule of thumb is that if you are considered a tax resident, and file tax returns in the US, you should also have the requisite health insurance.
Expats who are exempt from the ACA requirement – where it is enforced in their state – include:
- Dual-status immigrants in year one of residency.
- Non-resident immigrants who file a joint return with an American spouse.
- Those who file a 1040NR or 1040NR-EZ (Nonresident Alien Income Tax or Income Tax For Certain Nonresident Aliens With No Dependents).
States which currently issue fines for residents who do not hold compliant health insurance include:
- New Jersey
- Rhode Island
- Washington DC
This may change, so it is wise to check up on the state you plan to move to, before relocating.
Penalties are payable if you have been without compliant healthcare for two months or longer, and this can be high – an indicative fine might be charged at $695 an adult (around £534) or 2.5% of your income, whichever is higher.
States also have individual mandates that dictate the fines they can impose for residents without healthcare – for example, in Massachusetts, this is based on a percentage of the Federal Poverty Line (FPL).
A one person household without insurance might be charged up to $48,560, for those earning 400% of the FPL. A five person uninsured household earning 200% of the FPL would be fined $58,840 – or $11,768 per family member.
US health insurance approved by the ACA renews between November 1 and December 15 each year. These dates are when the ACA Marketplace is open.
If you miss those dates or move to the US outside of the enrolment window, you can:
- Apply for a special enrolment period – these are usually granted for life events, such as having gotten married or losing another insurance policy
- Apply for Medicaid at any time if you fit the eligibility criteria
The marketplace doesn’t always offer the cheapest healthcare policies, although the cover is likely to be more comprehensive, and ensures that you comply with all state laws around health insurance.
To apply, you’ll need to provide information about your family members, health and total income, and during this process will be advised whether you can apply for:
- Premium tax credits to reduce the cost of your healthcare.
- Cover through Medicard or the Children’s Health Insurance Program (CHIP).
Dental Care In The US
Many basic healthcare plans do not include dental care. Dentistry is private, as with all other healthcare services, and must either be paid for by the patient or be covered by an appropriate insurance policy.
The US Centers for Disease Control and Prevention (CDC) reports that around 25% of Americans over 65 have lost their teeth, and approximately 30% suffer from untreated tooth decay. In most cases, this is because of inadequate insurance and the inability to afford private dental care.
It is therefore essential to make sure your insurance policy covers dental treatment, including emergency care, or that you take out an additional insurance policy.
Children’s Healthcare In America
Another concern for many expats is about healthcare for children. Many young people need minor healthcare – including braces, asthma inhalers and glasses, for example. Some US schools do offer routine healthcare screening, which depends on state mandates.
Screening varies significantly in different states; some may check for hearing health, asthma, mental health, and provide dental screening, whereas some may provide none at all.
There are several possible routes to obtaining children’s health insurance:
- Insurers will offer premiums on families, as well as on individuals, so you can take out health insurance to cover your children, a partner or spouse, as well as yourself.
- Employers may offer protection for children, and in some states, Employer-Sponsored Insurance (ESI) is required to provide certain benefits.
- Children in working families may be eligible for Medicaid or CHIP if your employer does not provide cover, and/or deductibles are considered prohibitive.
Medicaid is a jointly-funded state and federal health cover program which supports many children from low-income families, as well as children with specific healthcare needs.
CHIP is also jointly funded and offers affordable health insurance for children and pregnant women who do not qualify for Medicaid, but who do not have access to viable private insurance.
How Do I Claim On My Us Healthcare Policy?
Most insurers will require pre-approval before you seek treatment; which of course is not possible in an emergency.
If you need to visit the doctor or seek any other healthcare services, you should contact your insurer in advance – obtaining treatment without approval may mean that a claim is rejected.
Prescriptions vary significantly in cost, and doctors can often offer tiered substitute medications. In most cases, your insurer will also have to have given pre-approval to cover the cost before you collect a prescription.
You will usually be asked to complete some paperwork or answer questions to evidence the need for treatment, and then provide documentation to your healthcare provider to prove you have insurance approval in place before the treatment is provided.
Co-Pay Rates For Healthcare Treatments
Co-pay costs will vary significantly between states, healthcare providers and insurers – but remain considerably cheaper than the total cost of healthcare without insurance.
Here are a few average costs you might expect to pay for standard treatments.
|Treatment||Average Co-pay Cost|
|Ambulance Journey||$15 – $100|
|A&E Visit||$50 – $150|
|Pharmacy Test||$5 – $25|
|Blood Test||$0 – $30|
|X-Ray||$10 – $50|
|Diabetes Medication||$10 – $200 per month|
|Sprained Wrist||Up to Out-of-Pocket Maximum|
|Childbirth||$500 – $3,000+|
Choosing A US Health Insurance Package
If an ESI scheme covers you, make sure to ready the small print very carefully. Anything that isn’t covered that you might need should be protected against by an additional, smaller policy.
Some of the most important questions to ask of a healthcare insurance provider include:
- How much are the premiums?
- What deductibles and co-pays apply to treatments?
- Do I need pre-authorisation for treatments and hospital visits?
- Are my pre-existing conditions covered?
- What is the maximum out-of-pocket charge payable?
You will find several insurers who offer expat specific insurance, and it is vital to take out either international health insurance that covers you for a long-term stay or insurance as a resident.
Note that most travel policies have a maximum period covered, so won’t be sufficient if you plan to live in the US longer-term.
The following insurers provide expat support, although there are many providers to choose from:
- Cigna – offer monthly, quarterly and annual premiums, with negotiable deductibles and options to adjust plans to account for travel plans.
- IMG – offer an Expat Insurance product with a cashback system, 24/7 emergency care services and insurance through a network of 17,000 facilities.
- Aetna – provide long-term health cover, including pre-existing conditions, through a network of 1.4 million physicians and healthcare facilities.
Most insurers will offer you the option to choose budget plans or premium plans. Remember that the cheaper the plan, the higher the deductibles and co-pays, and the fewer conditions that will be covered, so it is essential to verify what is and isn’t covered.
USA Healthcare Guide For Expats FAQ
Scare stories about the cost of healthcare in America can be frightening for expats – but the truth is although healthcare is in private hands, taking out insurance deals with most of the bills.
To allay expat fears, here are answers to some of the most-asked questions about healthcare in America.
If you don’t have any health cover or insurance and have a baby in a US hospital, you will be billed for the medical care, the length of your stay, and any treatments or medication received.
Although this will vary between states and hospitals, the average cost of labour and delivery in an American hospital is between $9,000 and $17,000 (around £6,900 – £13,100).
You can’t, but health insurance companies are not allowed to refuse you cover, or charge you more than anyone else if you have a pre-existing condition.
This is a relatively new rule that came into place in January 2014.
However, you must declare this to your insurer, as if you have already been diagnosed with a condition or illness and fail to tell your provider, it is likely that any insurance claim will be rejected.
No, not necessarily. Large employers with 50 or more full-time staff must provide health cover to 95% of their staff. If they choose not to, a fine is payable to the Internal Revenue Service (IRS).
For smaller businesses, health cover is a perk – as with getting use of a company car, or being given a mobile phone to use. It is not mandatory, and can often be a selling point when comparing employment options.
Insurance can be expensive, so a job with a slightly lower salary but with a robust health cover package is often seen as a more lucrative option.
No, it is not a condition of a visa that you have to take out health insurance, although some states will issue you with a fine if you do not hold an ACA-compliant policy.
Wherever you are moving, you should remember that there isn’t any state care. If you do need medicine or emergency care, there is a risk that you will face an exceptionally high bill, or be unable to obtain care if you cannot demonstrate that you can afford it.
Not necessarily – you need to read the small print carefully to understand what is, and is not, covered. Many employer insurance schemes, for example, may not cover dental care.
Most insurances will cover:
Hospital visits & treatments by a doctor.
Prescription medicines as prescribed.
They will usually not cover cosmetic treatments, off-label medicines, or newer technological treatments.
Most hospitals will set up a repayment plan. However, there is serious risk of damage to your credit rating, or even bankruptcy in the very worst case scenario.
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