Health Insurance in the USA

The United States stands for unlimited freedom like no other country. And that’s why there are a few surprises waiting for you here – especially with the mostly expensive health insurance. Our guide explains the complex system of health insurance in the USA and informs you about your options

Health insurance USA: our recommendations

To give you a better overview of the tariff jungle of international health insurance for the USA, we have compared our three favorites among the various offers for you:

For emigrants in particular, it is advisable to take out health insurance for long-term stays for the first time in the USA. However, before you decide on insurance, it is important to clarify in advance whether you want to move abroad permanently or only for a limited period of time.

International health insurance is best suited for a permanent change of residence abroad. The unlimited term and the flexible design options are perfect for emigrants who want to receive the best possible health care abroad.

If the stay is only for a limited time, the place of residence is not to be changed permanently or the insurance is only an interim solution, then long-term international health insurance is the best solution. It is mainly designed for emergency treatment abroad and can only be taken out for a limited period of time.

History of US Health Insurance

When it comes to health insurance, the United States is unique because it is the only industrialized nation without a unified, national health care system. Rather, you will find a patchwork of various state programs and private providers in America.

A look at history reveals how this special structure came about:

The Social Security Act

In the early 20th century, the Great Depression caused poverty in the United States to soar, leaving many Americans unable to afford even simple treatments. To counteract this, the Social Security Act was passed in the 1930s, which was intended to guarantee more security in old age.

The law was extended to health care in 1965 under President Lyndon B. Johnson : From then on, seniors over the age of 65 and disabled people were covered by Medicare and particularly low-income people by Medicaid.

All citizens who did not qualify for the state programs had to ensure their own health protection through private health insurance.

Healthcare reform through Obamacare

In 2008, nearly 46 million Americans (about 15% of the total population) did not have health insurance. The healthcare reform known as “Obamacare”, which completely reorganized access to health insurance, was a milestone for the American healthcare system .

In particular, Obamacare included the following changes:

• Insurance is compulsory for all US citizens
• no exclusion of persons with previous illnesses by the health insurance companies
• Parents can also insure their children up to the age of 26
• Penalty of 2% of household income for non-insurance
• Launch of the state-regulated Obamacare marketplaces (“Health Insurance Marketplace”)

Compulsory insurance introduced in 2014 significantly reduced the proportion of uninsured people.

Partial withdrawal by Trump

Although the increasing insurance coverage through the Affordable Care Act was clearly demonstrable, the Trump administration was working on an alternative to Obamacare and would have preferred to reverse the reform. However, this would have required the approval of Congress.

Biden’s return to the Affordable Care Act

The administration of incumbent US President Joe Biden is again naming health as one of its top priorities. Under Biden, the Affordable Care Act has come back into focus and there are even plans to expand it. This is intended to reduce healthcare costs, meet healthcare needs and simplify the US healthcare system.

According to the United States Census Bureau , the proportion of Americans without health insurance fell from 8.6% in 2020 to just around 8.3% in 2021.

The US insurance market at a glance

Americans’ medical care is provided by several separate insurance systems and is divided into private providers and government programs.

State health insurance

Only some demographics have the opportunity to benefit from federal health insurance in the United States. At the state level, there are these three programs:

Medicare

Created as part of the Social Security Act, Medicare is intended to provide medical care to elderly and seriously ill citizens. Any American over the age of 65 can receive Medicare benefits. Medicare also protects citizens with a recognized disability or acute kidney failure.

Green card holders over the age of 65 can also benefit from Medicare benefits. The requirements are that they have been a permanent resident of the United States for at least five years and have lived in the United States for five consecutive years. Green card holders should also be able to prove at least ten years of working time in the USA. In the case of shorter working hours, an additional payment is due, the amount of which is determined by the number of years worked.

Medicaid

Medicaid stands for “Medical Assistance” and is a care program that is primarily intended to support children and people on low incomes. Because it is a welfare-type benefit, there is a means test before Medicaid can be received.

Tricare & Veterans Administration

Tricare is a medical insurance program for members of the US military. Established in the 1960s, it provides civilian healthcare services to current and former military personnel and their families, National Guard members and their families, survivors, ex-spouses, and Medal of Honor recipients and their families.

Private health insurance

The majority of the American population does not qualify for state benefits and must therefore take care of their own insurance cover through a private provider.

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Private insurance through the employer

Most US citizens have private health insurance through their employer. Group health insurance policies are often taken out for the entire company, with the employer and employee sharing the costs.

However, employees often have to pay for the services they use or take out additional private insurance. Since the employer is the contractual partner of the insurance cover, the health insurance usually also ends if you lose your job.

Depending on where you live, there are different types of insurance that are tailored to different needs. When buying health insurance, you can usually choose between the following three types:

• Traditional “fee-for-service” health insurance: usually the most expensive variant, but offers the greatest flexibility in the choice of service providers (free choice of doctor)
• Health Maintenance Organizations (HMO): network that employs its own doctors as contractors; Members pay a fixed monthly fee and can only visit doctors in the networPreferred Provider Organizations (PPO): network of doctors and hospitals; Members can also go to doctors outside the network if they share the costs themselves

Cost of health insurance in the US

In general, medical care in the US is of a high standard. There are a large number of private clinics that are modern and technically up to date. But healthcare costs in the US are among the highest in the world.

Why are the costs so high?

Various factors ensure that healthcare costs in the USA continue to rise:

Unhealthy diet

Burgers, soft drinks, sweets: Many Americans eat unhealthily. The American health authority Centers for Disease Control and Prevention (CDC) states that over 42% of adult Americans are obese. The associated health risks increase the costs for the healthcare system.

Postponed Treatments

Many uninsured or underinsured Americans avoid non-essential doctor visits. Diseases often go undetected or are not treated in time, which in turn leads to high treatment costs in the long term.

Possible lawsuits

American hospitals and clinics factor in future claims for compensation in their pricing. Since each institution can set its own prices, it can happen that simple items such as handkerchiefs or plastic cups become “luxury items” and end up with hefty prices on the bill.

High drug prices

Drug prices in the United States have been rising since the 1950s and are now at their highest levels. Americans pay more than 2.5 times more for prescription drugs than residents of other developed nations. US pharmaceutical companies state that the extremely expensive drugs are caused by the high costs of medical research and the development of new drugs.

consequences of the high costs

Due to the high healthcare costs, insurance premiums in the USA are also very expensive. As a result, part of the population cannot afford health insurance, or only with difficulty.

Many US citizens opt for insurance that often does not cover all costs, so that they have to pay or co-pay for some medical services themselves. In fact, around 8.3% of Americans have no health insurance at all.

American law guarantees that in medical emergencies, hospitals must attend to everyone. However, uninsured Americans are generally expected to pay for their own medical care in the event of illness. It is therefore not surprising that the most common reason for personal insolvency is medical bills after hospital stays.

An example

The care of a US emigrant with a 42-day stay in the intensive care unit with artificial ventilation costs the equivalent of around €478,000 in New York. At the rates applicable in Germany, a hospital receives around €29,000 for the same treatment.

Differences to German health insurance

While in most western industrial nations the state regulates and ensures the health care of its citizens, in the United States personal initiative is required!

Health insurance in the USA, for example, differs greatly from that in Germany. Let’s take a look at the main contrasts of both countries:

Health insurance for emigrants

Choosing the right health insurance plan is a key item on any US expat’s to-do list. In order not to be surprised by high health costs in an emergency, you should make sure you have adequate protection before you move to the United States.

Take out international health insurance

It is advisable to take out travel health insurance for the first time in your new home country, which will cover you for several months. You can take care of such international health insurance before you emigrate to the USA. International health insurance should cover the following costs:

• outpatient and inpatient treatment measures
• operations
• Medicines and aids
• pain-relieving dental treatments
• Repair of dentures
• Medically necessary transports to a hospital/clinic
• rescue and recovery
• Medical repatriation to the home country

Secured by a suitable foreign health insurance, you can then take the time to inform yourself about the American insurance market on site.

The American Dream recommends:

With international health insurance, the insurance benefits remain as uncomplicated as you are used to at home. Our partner Foyer Global Health also offers the perfect solution for emigrants.

With international health insurance from Foyer Global Health, you benefit from the following advantages, among others:

• particularly suitable for expats, digital nomads and globally mobile people
• Reimbursement of expenses for medication, doctor visits or hospital stays with no total annual limit
• Unlimited insurance period
• No age limit
• 24/7 customer support

Do you have any questions? The Foyer Global Health team will be happy to advise you:  Calculate and book now!

Who is The American Dream?

Purchasing health insurance in the USA

The US health insurance market is very complex and diverse. You should compare the offered policies very thoroughly, as they consist of different packages and often e.g. B. no dental services included.

When comparing insurance policies, ask yourself the following questions:

• Do I have the right to freely choose my doctor, hospital or pharmacy?
• Is treatment by specialists (such as ophthalmologists and dentists) also insured?
• Does the insurance cover special treatments such as prenatal care, physical therapy or psychiatric care?
• Are home health care or nursing home expenses part of the coverage?
• Does insurance cover any medication that doctors may prescribe for me?
• What are the deductibles and co-payments?
• What is the maximum amount I have to pay myself to cover the costs?
• Am I also insured for a temporary or long-term stay in my home country?

Retaining the German statutory health insurance

If you were registered with a state health insurance company in Germany, you cannot keep it. When you leave the European social security system, you automatically lose insurance coverage.

However, you can continue to have an expectancy insurance with the German health insurance company, so that your membership is temporarily suspended and can be resumed under the old conditions when you return to Germany.

Retention of a German private health insurance

There are also many reasons for taking out private German health insurance, since German insurance law offers some significantly better conditions than those in the USA.

Insured persons of German private health insurance in the USA are still subject to the German Insurance Contract Act, which applies to all providers and insurance companies in Germany.

Health insurance for travelers

Travelers to the USA can also visit a doctor at short notice in the event of illness or, in emergencies, the emergency room. It is highly advisable to take out private international travel insurance before travelling, as treatment in the USA can be very expensive.

If you take out travel insurance for the USA, make sure it includes the following benefits:

• outpatient and inpatient treatments
• operations
• Medicines and aids
• dental treatments
• if necessary, repair of dentures
• transport to a hospital
• rescue and recovery
• Medical repatriation to the home country

Health insurance for students

The land of opportunity is known for its excellent educational opportunities. If you are planning a temporary but long-term stay in the USA (e.g. study, internship, au pair stay), you should also make sure you have adequate health insurance abroad.

Special travel insurance for a period of up to 5 years can be taken out for studies or another longer stay in the USA. Also make sure that important benefits such as costs for medical treatment, medication, a hospital stay, transport costs, etc. are also covered.

Health insurance for pensioners

If you want to move to the USA as a retiree , you should find out about health insurance in good time before you leave in order to avoid potentially high treatment costs. Citizens of European countries who are outside the EU, for example, lose the protection provided by statutory health insurance and should therefore take out international health insurance.

There are two ways to do this: either you fight your way through the jungle of offers from the many American providers of private health insurance, or you take out long-term international health insurance for seniors in your home country. The latter are usually valid for a certain period of time (usually one year, maximum five years) and must be taken out again for a longer stay or for the next stay in the USA.

More USA tips

Everyday life in the USA can hold some surprises and challenges. However, with our guides you are well prepared for your new life in the States! You can also find out more about the school system , tax system , driving a car or naturalization in the USA.