Policy

How American Health Insurance system works

When thinking of the American health insurance system, the first thing that comes to mind for many is its negative connotations. The constant debates, dread, and frustration are at the forefront of the public’s perception of the system. For many, it is a fear that plagues their minds and wallets. This fear has caused several movements for reform in the system. With new bills and acts being proposed and passed to have some aid for those struggling- such as the no surprise act of 2021, which forbids patients from receiving surprise medical bills when seeking emergency services or certain services from out-of-network providers at in-network facilities.

The American health insurance system has many coverage plans that range from different price points and coverage plans- as of now there are approximately 5,954 insurance companies in business. With so many plans to choose from many are left confused with which plan will be best suited for their needs.

As of March 2022, about 8% of the United States population doesn’t have health insurance, meaning that about 26 million people are uninsured and may be struggling if they need medical attention. Medicine in its own right is one of the more important factors to keep a country thriving, without access: the population begins to die and the economy will deplete.

Health insurance eligibility:

  • Must be a US citizen or national
  • Must live in the us
  • Can’t be incarcerated
  • You work in a workplace that offers health insurance benefits

Coverage plans set by the government:

  • 65+ can be covered by medicare, however, if they are they are not eligible to use the Marketplace to buy a health or dental plan
  • Those below the poverty threshold may apply for medicaid
  • Those who are not able to meet the medicaid standards may apply to State Children’s Health Insurance Program (SCHIP), which will help cover their children’s medical costs

The average monthly cost of health insurance coverage nationally is $541, which translates to $6,487 a year- however, this number is just an average of all 50 states. Many states have higher averages, such as West Virginia and South Dakota having monthly averages of over $800.

Along with this there are tiers that are offered to individuals based on the proportion of health care costs the insurance plan is expected to cover. With the price increasing not only as the tier you choose increases, but all of the tiers also increase in price as you age. As older consumers would see their rates increase according to the age scale set by the federal guidelines.

Another distinction between plans that can change the rates you pay is the type of network the plan uses. Depending on whether the plan is a preferred provider organization (PPO), health maintenance organization (HMO), exclusive provider organization (EPO) or point of service (POS), access to health care providers will be managed in different ways. HMOs tend to be the most restrictive about which doctors you can see and what you need to do in order to see them. Meaning that insurers save on the total cost of care and thereby have lower premiums.

Factors that influence how much your health insurance plan covers:

  • Location
  • Age
  • Credit score
  • Drug/alcohol/tobacco history
  • Health history

The coverage that is included in most insurance plans:

  • typically covers most doctor and hospital visits, prescription drugs, wellness care, and medical devices.
  • If denied coverage, the policyholder may appeal for exceptions or allowances based on the situation
  • Pregnancy, maternity, and newborn care
  • Oral and Vision care
  • Rehabilitative and habilitative services and devices
  • Prescription drugs
  • Mental health and substance use disorder services, including behavioral health treatment
  • Hospitalization (including surgery and overnight care)
  • Ambulatory patient services

The coverage that is seen may vary depending on certain factors such as your location, age, tobacco use, plan category, and whether the plan covers dependents. With many insurance companies giving out coverage depending on their understanding of the kinds of medical care that most patients need. As well as the cost for procedures/treatments being high many seek to marry fast so that they can be covered by their partner’s plan or wait until they are 26 and their parents health insurance cannot cover them anymore.

What is not included in most insurance plans:

  • Elective or cosmetic procedures, beauty treatments, off-label drug use, or brand-new technologies
  • Health Supplements
  • Diseases related to Overconsumption of Alcohol
  • Diagnostics Charges
  • Infertility/Pregnancy-related complications
  • Maternity

The lack of coverage on trial drugs/procedures ultimately leads many to seek desperate measures. They may seek out illegal ways to obtain said drug or join drug trials where they are test subjects for a possibly lethal drug. As well as the lack of maternity care and leave, many parents have to suffer paying a lot of money during and after pregnancy.

The overall conversation about the issues in the American health insurance system is a problem that will not die down soon. The debates rely with a lot of stigma against the idea of universal healthcare- with that many argue that the economic perspective if the United States government were to ensure universal healthcare guidelines would be too great on the American population, in terms of increasing taxes and decreasing the quality of the American healthcare industry. However, a solution is needed soon as health care is projected to be a booming industry and likely to grow many folds in the near future.

Author: Alexandra Stepien

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