US Health Insurance Explained: A Basic Guide for Expatriates in the US

When you move to the United States, healthcare coverage works differently than what you may be used to in your home country. Unlike many other countries around the world, where coverage is provided by the government and funded by the tax system, the US healthcare system is designed around private health insurance – purchased by you or your employer directly with the private insurance company. Most US visitors are required to have some form of health insurance in order to obtain a visa. The level of coverage required may vary, but you need to understand how to navigate the US health insurance system.   

While the U.S. healthcare system may seem daunting, here are some key concepts and basic information to help make it a little easier: 

How to Access Care 

Probably the most important thing someone new to the US needs to understand is how to get medical care if and when the need arises. Here is some general guidance based upon the severity of your need:

Urgent, but not life-threatening conditions: 

How to find doctors who provide routine and sickness care: Most insurance policies offer discounts to members who use doctors, hospitals and other medical providers affiliated with their company. These are high-quality, certified providers, who have agreed to accept lower rates in exchange for seeing a higher volume of patients through that insurance company’s policies. These affiliated medical providers are part of a “network” (so you may hear the terms “in network” or “out of network”). Some policies require that you can only get care within that network of providers, while other policies allow you to get care at any provider, but you will pay more if you receive care from providers that are not affiliated with the policy (“out of network”).  

Types of Medical Providers

Next, it’s important to understand the different types of medical providers. Some more common ones are listed below:

Primary Care Physician (PCP) – Primary care physicians tend to be generalists, often family care or general practitioners. These doctors focus on a member’s total well-being and help their patients coordinate health care. Under some medical policies, you must first get a referral from your PCP before getting further care from another physician or hospital. (More on that below under Types of Insurance Policies/Plans).  

Specialists – Specialists focus on the treatment of specific types of medical conditions such as dermatology (skin diseases), podiatry (foot ailments), and cardiology (heart conditions). Care from a medical specialist is generally more expensive than care received from a generalist or PCP because they have additional expertise in their field.  

Hospitals – Hospitals are institutions that provide medical and surgical treatment and nursing care for sick or injured people.    Hospitals are often the site of treatment for planned conditions (e.g., delivery of a baby, surgery) and are also effective settings for treatment of unplanned care, such as emergency conditions.

Urgent Care Centers –   As stated above, these facilities are designed to treat urgent, but non-emergency medical situations.

Types of Insurance Policies/Plans

There are many types of policies and products on the market today, but these two are commonly offered by insurance companies:  

PPO Plan – A PPO plan is a more flexible option for members where you can go to any licensed provider for care, with financial incentives for you to seek care from those providers who have contracts with the insurance company (these are called “in-network” providers). Members who use in-network providers pay less for their services than if they were to get the same care or treatment from an out-of-network provider. But, either way, services are covered – you’ll just pay less when you use in-network doctors. Plus in-network providers cannot charge you more than their agreed-upon rates with the insurance company (see below for an explanation of “balance billing” for out-of-network providers).

HMO Plan – An HMO is a more restrictive option where you can only get your health care services covered if you use a network provider (other than in the case of a medical emergency). Any care received from a non-network provider (other than in an emergency) will not be reimbursed and you will be fully responsible for the cost of your care. Additionally, in an HMO, you need to designate a Primary Care Physician (PCP) and must contact him or her first for all courses of care/treatment. If your treatment requires the care of a specialist, or other services not available through your PCP, your PCP must first provide you with a referral for those services to be covered. If you do not get a referral before getting care from a specialist or other medical provider – even if that provider is in the network – your expenses will not be covered for those services.  

Some Common Insurance Terms

Last but not least, once you know how to access care, where to find providers and types of insurance policies you can buy, there are also some key terms that are common across the industry that would be helpful to understand. 

Deductible – Many US health insurance plans include a deductible before the plan pays for care. A deductible is the amount you must pay for out of your pocket first, before the health plan’s benefits begin to cover the cost of your care. It is somewhat similar to the concept of an excess, although it is not applied per condition, but rather per person or per family each policy year. Once you have met your individual or family deductible for the policy year, the health plan will begin paying benefits at the prescribed levels. It is also important to note that the amount of the deductible will vary based on the type of plan in which you are enrolled, whether you cover just yourself or a family, and may even vary depending on whether you use network providers or not.  

Coinsurance – Once you have met your deductible limit for the policy year, most plans will then also require some amount of cost sharing for additional care you receive during the year. Both your deductible and coinsurance limits will reset at the start of each policy year, but you want to make sure your policy has a limit or “out of pocket maximum” to ensure your financial protection. Once you reach that annual limit or maximum, the health plan will pay all additional eligible plan expenses for the remainder of the plan year. Services not ordinarily covered by the plan (like cosmetic surgery), would still not be covered. 

Copays – Many plans on the market today have copays for select services. These could be for physician office visits, for emergency room visits, prescription medications or other designated services. A copay is a fixed amount you pay for each service and is limited to in-network services only (note: copays do not apply to out-of-network care). For those services, any cost in excess of the copay is paid for by the health plan.    

Reasonable and Customary (R&C) – Most insurance plans set reimbursement for services based on compiled data of the average charges for a particular procedure in a particular geographic region. Most plans have an R&C limit so in the event you receive care from an out-of-network provider, the plan will only pay benefits up to the R&C amount – and you are responsible for any expenses above that limit.

Balance billing – In addition to receiving quality care at discounted rates when you use an in-network provider, you are also financially protected from having to pay more than the agreed-upon discounted rates with those providers (as in the case of R&C as noted above). However, when you seek care from a non-network provider, the health plan will pay benefits only up to the R&C limit, and you will be responsible for the difference. When that happens, the provider will receive partial payment from the insurance company and send you a bill for the difference – called “Balance Billing”. In addition, anything you pay over the R&C limit does not count toward your annual out-of-pocket maximum, so it’s important to consider the financial impact of using providers that are not affiliated with your insurance plan.  

Understanding these key concepts will help you maximize your US plan of benefits. As you compare costs of various health plan options, keep in mind your total costs – that is, not just the monthly rate you pay for your policy, but how much you will have to pay each time you receive care via deductibles, coinsurance, annual out-of-pocket maximum and copays.  

If you need additional assistance understanding your benefits options, you can contact an insurance agent or broker, or consult with your employer’s benefits department.