Before we talk about Health Insurance in the United States, let’s understand what exactly health insurance is. It is a type of insurance that covers the medical, surgical and prescription bills that are incurred by the insured (the person who is benefitted by the insurance plan)
In America, healthcare is a very expensive affair. A regular visit to the doctor can cost a few hundred dollars, and if you are admitted to a hospital it could end up costing you several thousands of dollars. People from the middle class or lower cannot afford to pay such large sums when they get sick. That is why health insurance plays such a huge role in America’s healthcare today.
Health Insurance Plans cover a network of providers in the healthcare field. Providers are doctors, hospitals, laboratories, and other groups. If your provider is in the network covered by your health insurance plan, you can receive medical care or healthcare from them and your insurance agency will be billed for the services. If your provider is not in the network, your insurance agency might not pay your bill or might pay a small percentage of it.
What does Health Insurance cover?
Before there was standardization, the US insurance agencies had varying plans with varying benefits. Some health insurances used to pay for prescription drugs while others required you to pay for your own medicine. Health care reform (under the Affordable Care Act) has changed the scene for health insurance plans, by requiring them to pay for “essential health benefits”.
Some of the things that come under “Essential Health Benefits” are:
Mental health and substance abuse treatment
Maternity and newborn care
Even though these services are covered in your health insurance plan, there are certain charges you will be paying known as access charges, which will be less than the actual charges. The amount of access charges you pay when you avail a medical service will be decided by the premium you have paid for your insurance plan. Ideally, the more premium you have paid, the less access charge you will have to pay, and vice-versa.
Benefits of American Health Insurance
Obviously, the biggest advantage of health insurance is being able to pay your medical bills even when you are in a tight spot. Ailments and accidents cannot be predicted, and that is the core principle of how insurance works. Private Health Insurance gives you more options and better coverage than public plans, depending on your health insurance plan. Since private health insurance costs larger sums of money, they are less crowded and the quality of service is better.
The Downside of American Health Insurance
The downside is also very glaring. The major reason people need insurance is that they cannot afford American healthcare. But private health insurance is counter-intuitive in this aspect as it costs a lot of money itself. So private health insurance is only for people who can afford it (and for people whose employers provide them private health insurance, the quality of which again depends on how much money the employer has).
Health Insurance costs even more if you have a pre-existing medical condition, even though they are the people who need insurance the most. And since health insurance plans have a preset list of diseases and conditions they cover, if you are a patient with a rare disease or a condition that is not covered by your health insurance, you end up paying for your medical bills apart from paying for health insurance.
How it compares with other countries
According to the Peter G Peterson Foundation, the United States spends more on healthcare than any other developed country. In 2019, the United States spent 11,100 dollars per person on healthcare, which is the highest health care cost per capita of the countries in the Organization for Economic Co-operation and Development (OECD). In comparison, the second-highest healthcare cost per capita is that of Switzerland, which is around 7700 dollars. The average healthcare expenses per capita without taking the United States into account is 5500 dollars per person in the OECD.
The two main reasons why the United States of America spends disproportionate amounts of money on healthcare is the price of the medical services provided and the utilization or the need for the number of services.