Let ‘s take a look at the American insurance system

American insurance system

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In the United States, two main types of public insurance are provided by the federal or state governments. It is Medicare for the elderly aged 65 and over, the physically handicapped, and patients with chronic renal failure, and Medicaid for the low-income.

However, not everyone has these insurances. This is because there are strict restrictions on income and medical conditions for taking out insurance.

Besides, there are some problems with the coverage of Medicare. Medicare is just insurance to cure illness. Even if you can join, you will not be able to receive sufficient long-term care such as long-term rehabilitation after discharge.

For those who say “I can’t get into Medicare!” Or “Medicare isn’t enough!”, The only way left is to get expensive private insurance. Naturally, low-income earners cannot take out expensive private insurance. As a result, there are many cases where relatives take care of themselves at home and bear the burden.

When you buy medical insurance in the United States, you need to know the type and information of private medical insurance. The insurance premiums and coverage of private medical insurance vary widely depending on the insurance company and insurance content used.

In addition, there are types of private medical insurance in the United States such as HMO, PPO, and POS, and the amount of out-of-pocket expenses inside and outside the insurance company’s network varies depending on the type.

The insurance system in the United States can be broadly divided into “public medical insurance (Medicare / Medicaid)” and “private medical insurance (HMO / PPO / POS)” .

Public medical insurance (Medicare / Medicaid)

There are two types of public medical insurance offered in the United States: Medicare and Medicaid. Medicare is for the elderly aged 65 and over and people with disabilities, and Medicaid is insurance for low-income people who meet certain conditions

Private medical insurance (HMO / PPO / POS)

Private medical insurance is an insurance product provided by a private insurance company . Being a private company, there are differences in insurance premiums and service content depending on the company. We will briefly introduce the characteristics of each of the main medical insurance plans, HMO, PPO, and POS.

HMO – At HMO, the plan is to decide on a family doctor first, and basically see a family doctor in case of illness or injury. Although the insurance premiums are set low, as a general rule, insurance medical treatment will not be applied unless you use a doctor or medical institution within the network of the insurance company.

PPO – The PPO does not decide on a family doctor, but can freely decide which doctor to visit within the insurance company’s network. Although the out-of-pocket cost will be higher, it is possible to use a doctor or medical institution outside the network. Insurance premiums are set higher than those of HMOs.

POS – It is a plan that can be said to be a hybrid of HMO and PPO, and although the family doctor is decided, it is also possible to use doctors and medical institutions outside the network. Insurance premiums are also between HMO and PPO.

Private medical insurance in the United States has different services depending on the premium, and is characterized by the higher quality of medical care as the cost of insurance increases. In addition, the higher the insurance premium, the less the out-of-pocket rate will be when you visit a medical institution due to illness or injury .

Therefore, if you want to receive high-quality medical care while reducing the medical and treatment costs paid to the hospital, you must usually pay a high insurance premium. 

Out of Pocket Amount / Ratio

It is important to note that private health insurance in the United States can make a big difference in out-of-pocket costs inside and outside the network.

A network is a medical institution that has a contract with an insurance company, and the out-of-pocket cost is low if it is inside the network and high outside the network. 

In addition, the out-of-pocket cost will vary depending on whether the treatment is covered by the insurance company. For example, if you choose an insurance plan that does not cover dental treatment and then use a dentist, you will not be covered by insurance, so your out-of-pocket expenses will be almost all of your medical expenses. 

Many medical insurance policies in the United States require the setting of a family doctor. It is a system that selects a family doctor within the network of insurance companies and uses the family doctor when going to a medical institution .

In the United States, except in an emergency, you will see a family doctor for illness / injury consultation, health examination, and health consultation such as lifestyle-related diseases. If you want to see a specialist instead of your doctor, you must first see your doctor and have them write a letter of introduction to your doctor.


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