Filling out health insurance

Healthcare Insurance in the USA and Covid-Related Economic Syndromes

As we still struggle to cope with economic and health problems in the post-COVID-19 world, we come to the point of re-evaluating the importance of healthcare programs and questioning whether they really make our lives easier in such critical times, especially in the USA. Countries like Denmark, Germany, Switzerland, and Canada are considered to have the best healthcare management for their citizens. They commit a significant amount of their budget to health care services. Their regulations are universal and aim to provide everybody with the same quality healthcare services. Unlike the countries which embraced the universal healthcare or single-payer model, the USA doesn’t have a federally regulated program. Rather, it is the private sector businesses or insurance companies operating without any surveillance. But, most importantly, the private sector’s healthcare plans turn into commodity products you buy as part of annual shopping activity. And its exchange value becomes human life.

To restart, despite the huge amounts spent on healthcare services in the USA, there are discrepancies as to what extent and at what cost the citizens benefit from these services. It’s not very unlikely that people refuse to go to hospitals when they have a medical problem, fearing it will cost them a lot. The number of people who go to bankruptcy due to their medical debts is high. These unsettling facts owe their presence to many factors. This blog aims to provide you with information about healthcare insurance in the USA and what federal and private plans the USA offers for its citizens. Secondly, it discusses how COVID affected the US and whether the US healthcare system was efficient in supporting the citizens during COVID.

cartoon image of a man with a broken arm, looking at the North America standing outside the Earth in space and throwing dollars
Credit:commonwealthfund.org

How do healthcare programs work in the USA?

According to healthcare.gov, fixing a broken leg can cost up to $7,500. The average cost of a 3-day hospital stay is around $30,000. Comprehensive cancer care can cost hundreds of thousands of dollars unless you have insurance. Why is it such a burden to get sick in the USA? Why are people that concerned?

As said by many, the main problem in the US is that there is no coordination between the different players in the healthcare system. For instance, hospitals have their own charges. Employers are seen as the main source to cover the medical expenses of their employees, and the Federal Government does not generally regulate insurance companies. Since there is no nationwide regulation, private corporations maintain the system as they wish.

Another facet of the problem includes factors that impact health insurance rates set by law. These are personal factors like age, the state and county you live in, tobacco use, and the number of people insured. All these factors impact how much people should pay to have insurance, making everything very complex. That’s why choosing a healthcare plan is like making a life decision in the USA. Given that, citizens really should be aware of what they need and what kind of plan suits them best.

In 2010, with the enactment of the Affordable Care Act, the government started to become a more regulative force by putting certain pressure on private insurance companies. Nevertheless, due to some modifications under the Trump administration, it lost its power. But it’s still available and continues to provide services through the Health Insurance Marketplace.

What is the Affordable Health Care Act (ACA)?

The Affordable Care Act, or also, shortly known as Obamacare, was enacted in 2010 with the purpose of increasing the eligibility of the Medicaid program and distributing healthcare services across the country for the millions of uninsured Americans. To put it differently, it aims to reduce expenses for low-income individuals and families with cost-sharing reductions. Its goal was to achieve transparency in pricing practices. As stated in healthcare.gov, ACA-compliant health plans include the following essential health services:

the image of a circleshaped diagram which reads the meachnism of acquiring health insurance coverage under the Affordable Care Act, in 5 sections colored with orange green pink yellow and blue, it addresses ACA's benefits
Credit: commonwealthfund.org
  • Ambulatory patient services (outpatient care you get without being admitted to a hospital)
  • Emergency services
  • Hospitalization (like surgery and overnight stays)
  • Pregnancy, maternity, and newborn care (both before and after birth)
  • Mental health and substance-use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)
  • Prescription drugs
  • Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care (but adult dental and vision coverage aren’t essential health benefits)

Actually, every health plan in the Marketplace covers these services. If you want to learn how to apply, you can check here. Additionally, there is Covered California run by the state and interconnected to Obamacare or ACA, helping people find the best health coverage with other additional services.

Metal Tier system

the graph which shows the metal tier system in the US, bronze silver gold and platinum level benefits, in four vertical side-by-side rows
Credit: ehealth

The metal tier system refers to bronze, silver, gold, and platinum health plans. Bronze has the lowest premium with 40% actuarial value, but costs the highest when you need care. The silver plan (70%) has moderate premium payments. However, silver plan holders could also benefit from gold or platinum level benefits, as a result of an ACA subsidy that reduces out-of-pocket costs and increases actuarial value. Gold (80% actuarial value), which has a higher premium but lower costs. Platinum (90% actuarial value) has the highest premium, but when you need care, your payment-share will be the lowest. Deductibles will be very low when compared to the other metal categories. Also, the actuarial values might show variance by a few percentage points depending on the insurance company.

Four important terms to understand health expenses

Before delving into the available healthcare programs in the USA, it is a must to get familiarized with the basic healthcare terms because every health plan, more or less, will refer to these terms. Co-pays, deductibles, coinsurance, and out-of-pocket are very important to understand how much and when you need to pay for your healthcare services. Depending on the health plan you are provided with, their rates might change. Some may include copay and no deductibles or vice versa. That’s why it makes a lot of difference to know how much you pay.

image of an illustration which reads how you and your insurer share costs by ceating a hypothehtial situation of Jane paying insurance plan through deductibles copays

  • A deductible is the set amount you pay each year before your health plan starts paying its share.
  • Co-pay or co-payment refers to the set amount you pay when you go to a doctor or get a prescription. It refers to a dollar amount. Co-pay is considered better by some than coinsurance because it is a set amount.
  • Coinsurance refers to the cost that is shared between you and your insurance company. Let’s assume that your coinsurance is 30 percent. Your health insurance will cover 70 percent while you pay 30 percent. When the coinsurance percentage gets higher, so does the share of the cost. Secondly, coinsurance comes into the picture only after you pay your deductibles. Thirdly, one should also be aware of what kind of health service coinsurance covers.
  • Out-of-pocket expenses refer to medical expenses you pay without any share of the insurance. Payments you make for deductibles, co-pays, and coinsurance all add up to your out-of-pocket maximum.

Premium vs. out-of-pocket costs

Healthcare costs come in two forms: premiums and out-of-pocket costs. The difference between the two is that you pay a premium even if you don’t get any care. And you pay out-of-pocket only when you use care. Accordingly, premiums refer to the monthly fee you pay as a member of a specific health plan. If you make very frequent visits to hospitals and need constant care and check-ups, with a premium, it will cost much cheaper.

HMO vs PPO: Which one is better?

two distinct diagraphs which show HMO in network system and PPO out of network system
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In addition to healthcare terms, another confusing topic is HMO and PPO health plans. What do they mean and which one is better? To begin with, HMO is the abbreviation of Health Maintenance Organization, while PPO stands for Preferred Provider Organization. One of the main differences between HMO and PPO lies in the scope of the physicians the patients can see. While PPO lets you choose out-of-network providers ( you might need to pay a bit extra), HMO has certain restrictions. If you are an HMO plan holder and see a physician outside of a specified network of physicians, your coverage won’t apply to that visit. And you will be held responsible for covering all the expenses.

The second difference is that HMO has a condition that makes the patient consult the primary care provider in the first place. Only after a referral, can the patient make another visit to the specialist.  While on the other hand, PPO has no such limits.

The third differentiator between HMO and PPO is the cost of health insurance. PPO has a much higher premium than HMO because of its flexibility. In short, PPO is a more flexible plan, while HMO comes with certain restrictions. However, in terms of financial issues, PPO is more expensive. With regard to that, it is hard to evaluate which one is better. It seems that it’s more dependent on what the patient prioritizes. Also, one has the freedom to benefit from both HMO and PPO health insurance plans.

Public and private options for healthcare insurance in the US

a cartoon-like image of a new born baby a father and a mother aligned from left to right on a green background, above their heads there is a health insurance paper and a big tick
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To start with, health insurance refers to any program that covers medical expenses, which can be grouped into public and private programs as two major categories. Local governments, federal and state are three public actors in the US. Among the governmental programs, we can count Medicare, Medicaid, Children’s Health Insurance Program (CHIP), and Veterans Health Administration ( not available in every state). However, not everyone is considered eligible to apply for public insurance. The government holds responsibility mostly for elderly people (65+), people with disabilities, and low-income families ( which depends on the Federal poverty level of every state). As for the private ones, there are lots of options, but the ones with high and moderate rankings and customer satisfaction include Aetna, UnitedHealth, Cigna, Blue Shield Blue Cross of Texas, EHE Health Insurance, and Anthem Blue Shield.

Medicaid and Children’s Health Insurance Program (CHIP)

Medicaid is a federal and state program providing service for 72.5 million Americans. It offers free or low-cost health insurance for children, pregnant women, and individuals with disabilities.  It is probably the cheapest insurance. You can apply for Medicaid any time of the year since there are no specified enrollment or application dates.

Medicare

Medicare is a federal health insurance program that aims to provide, particularly, 65+ elderly people, young people with disabilities, and people with kidney failure with health coverage. It comprises of 4 parts. While Medicare Part A covers hospital expenses or inpatient care, Part B encompasses medical expenses and outpatient care. As Part C includes Medicare Advantage, Part D includes prescription drugs.

The original Medicare includes parts A and B. Other private health insurance companies enrich this original Medicare plan by adding extra coverage concerning prescription drugs, dental, and vision. They are called Medicare Advantage Plans, including Part C and D.  Aetna, Anthem and UnitedHealth are some of these companies. However, these companies, first, have to be approved by Medicare.

Another important detail is that one is eligible for Medicare Part A if the concerned person is at the age of 65 and over, but only under two conditions. First, the individual or their spouse paid Medicare taxes for 10 years. Or as a second condition, one should receive benefits from Social Security or the Railroad Retirement Board.

Aetna

Founded in 1853 as a subsidiary of CVS Health, Aetna is a private health care company committed to providing healthcare insurance and additional services. Some of Aetna’s products are medical and dental plans, behavioral health programs, long-term care, and disability plans. It also enriches original Medicare plans and Medicaid services by adding different health plans. Due to its long history and experience in the field, it can offer very detailed programs to its customers. Today, it offers services to over 39 million people.  It’s rated quite high by AM Best and reserves its place as a good company and one of the oldest nationwide healthcare providers.

In addition to the health programs, it offers wellness programs, encouraging people to engage in sportive activities. Other appreciated features of Aetna include its easy-to-use app, e-visits, which enables online medication/therapy prescriptions, family coverage, and walk-in clinics. One more advantage of Aetna as stated by the company is the embedded deductible, which is also known as “aggregate,” meaning one person on a plan with 2+ members can meet the individual deductible and begin receiving covered benefits.

UnitedHealth Group (UHC)

UHC, founded in 1977, is a recognizable nationwide healthcare insurance company. It offers Individual Health Insurance, Health Savings Accounts, Dental and Vision Insurance, Medicare Advantage Plans, supplemental insurance, and short-term insurance plans, which have different premium rates. By including extra coverage, the company enriches the original Medicare plan with its large network of health professionals.

Also, UHC offers additional programs to increase the quality of individual life and encourages people to be physically active and to pay regular visits to fitness centers, participating in support programs such as behavioral health, disease management, addiction, and weight loss. In a sense, UHC is very similar to Aetna. Yet, one of the differences between UHC and Aetna is that UHC has a larger network and is considered to be more expensive.

EHE Health Insurance

“We’re a preventive health care benefit—helping people live longer, healthier lives with personalized preventive care.” EHE

EHE has been serving its customers since 2017 and is owned by physician executive David Levy. The main promise of EHE health insurance is to be a complementary addition to primary care. It takes into consideration your lifestyle and its impact on your overall health. So, they base their main focus on the prevention of diseases. Most importantly, they aim to diminish the possibility of developing a chronic disease through individualized preventive care. They evaluate both the physical and mental states of the individual through their EHE health exam. Also, EHE engages in the provision of organized healthcare for employers by guiding them for small or large business health plans.

Blue Cross Blue Shield of Texas

Blue Cross Blue Shield (BCBSTX) is a division of Health Care Service Corporation (which operates Blue Cross and Blue Shield plans in Texas, Illinois, Montana, Oklahoma, and New Mexico), the country’s largest customer-owned health insurer and fourth-largest health insurer overall, as stated by BlueCross BlueShield. BCBSTX operates state-wide in Texas as the largest health benefits provider with 5 million members.

Blue Cross Blue Shield of Texas, like UHC and Aetna, is authorized to extend Medicaid and Medicare federal programs. Additionally, they provide individual and family vision insurance plans, travel medical and expatriate plans. According to valuepeguin, the average cost of health insurance in Texas for a 40-year-old is $509 per month, which is a 4% increase over last year.

Anthem Blue Cross Blue Shield

The healthcare services Anthem offers are quite comprehensive. They provide you with group health insurance, dental insurance, vision insurance, health and wellness programs, life insurance, absence, and disability management, supplemental health insurance, and group Medicare. Additionally, small business plans, mid-to-large business plans, and Medicaid plans are part of the service they provide.

Medicare Advantage plans add extra benefits to expand what original Medicare offers, such as prescription drug coverage, dental and vision care as part D. Additionally, Special Needs Plans (SNPs) are for people with chronic diseases such as diabetes, heart disease, lung disorder, and people with low incomes.

Cigna

Cigna is another insurance company with average-priced premiums and high customer satisfaction. It offers dental and vision insurance, short-term health insurance, global individual and group plans. However, it is not nationwide. It is only available in 12 states: Arizona, California, Colorado, Connecticut, Florida, Georgia, Maryland, Missouri, North Carolina, South Carolina, Tennessee, and Texas.

Important deadlines to keep in mind

Generally, the open enrollment period for 2022 is between November 1, 2021, and January 15, 2022. However, this time period varies from state to state. It is always better to double-check. As for Medicaid or CHIP, there is no limited enrollment period as long as you are eligible to enroll. However, there are some specific dates for Medicare. As stated:

  • October 15 = The Annual Election Period (AEP) opens. During this time, you may switch from Original Medicare to a Medicare Advantage plan. Medicare Advantage plans have HMO and PPO options. You may also switch back to Original Medicare from a Medicare Advantage plan or change Medicare Advantage plans.
  • December 7 = This is the last day to make changes to your Medicare coverage for it to start January 1.
  • January 1 = Your new Medicare coverage goes into effect. This is also the beginning of the Medicare Advantage Open Enrollment Period. During this time, you may leave a Medicare Advantage plan and switch to Original Medicare.15
  • March 31 = The Medicare Advantage Open Enrollment Period ends. This is the last day you may switch back to Original Medicare and add a Part D prescription drug plan.

Additionally, there are specific enrollment periods, which include situations like childbirth, pregnancy, child adoption, and losing job and coverage.

Health insurance for self-employed people

The USA has a high number of self-employed citizens, around 44 million. Given that it’s the employers who cover most American citizens’ health insurance, it leaves self-employed people with a dilemma of how to navigate their health insurance plans. Well, some of the options for the self-employed include individual health insurance purchases and short-term insurance plans which can be enriched with dental or vision insurance, depending on the individual’s needs. According to ehealth, in 2020, the average national cost for health insurance is $456 for an individual and $1,152 for a family per month. Additionally, you can also use the Marketplace to fill in the application and see if you are eligible for premium tax credits and other savings. Also, if you have one employee or more, you might be qualified for the SHOP marketplace for small businesses.

Health insurance for the unemployed

As stated by healthcare.gov, if you lose your job and health coverage covered by your employer, then you become eligible for a Special Enrollment Period. What you have to do is to enroll in a Marketplace insurance plan within 60 days after you lose your coverage. Additionally, you may be eligible for Medicare and CHIP, and COBRA coverage health plans. According to usa.gov, you could also benefit from self-employment and educational help.

Just a break to think about what all this means

a caricature of health care options in USA, divided in two images. on the left there are bills lying on the floor nd house is for sale, on the right there is the grave of someone uninsured newly buried
Credit: politicalgraffiti.files.wordpress.com

Metal tier system, HMO and PPO, copay, deductible, coinsurance, out-of-pocket, premiums… With over 5000 private insurance companies, even though the USA seems to have many options, and Advantage plans, its healthcare system is considered “more expensive and less effective.” Even though reforms like ACA attempt to fix the flaws of the system, it continues to fail. All those special health plans and healthcare terms are just confusing. As was suggested in the beginning, it is nothing more than a shopping plan. It just serves to enrich your shopping choices, depending on what you need most. However, they don’t really address the core problems of society.

According to policy advice, it has been found that health insurance is not owned by around 44 million adults in the US, while 38 million do not have adequate health coverage. In addition to the flawed system and the already going-on racism issues, with the coronavirus outbreak, life got much harder in the USA, affecting everybody and mostly the racial and ethnic minorities like Hispanics, Black, and Native Americans.

How did COVID-19 affect the USA?

The pandemic dragged the whole world not only into a public health crisis but also an economic crisis. The USA was no exception. Despite being one of the most industrialized countries, it couldn’t manage the crisis well, leaving people unemployed and with no health coverage. First, many people lost their jobs, failing to pay for their insurance. Secondly, since the government relies on job-based health coverage, when people lose their job, they lose their health insurance too. Thus, it turned into a vicious circle during a critical time when people need healthcare provision most.

the image of two graphs showing the black and hispanic, non hispanic black people's death rates according to age
Credit: brookings.edu

However, the most affected groups were racial and ethnic minorities, and the lowest-paid workers. In other words, the inequality between the different economic and ethnic groups became clear one more time. According to the report of the Robert Wood Johnson Foundation (RWJD), Latino, Black, and Native American households faced serious financial problems, spending their savings and barely being able to pay their mortgage and rent. While the most struggling groups during the coronavirus outbreak were Latino (72%), Black (60%), and Native American (53%), for the White and Asian, the percentage of financial-problem reporting was only around 36-37. Also, job and wage losses affected the former group more.

In addition to job losses, people couldn’t easily get access to healthcare services. For instance, RANDS-data report shows the reduced access of U.S. adults to medical care (including urgent care, surgery, screening tests, ongoing treatment, regular checkups, prescriptions, dental care, vision care, and hearing care) during COVID-19. Last but not least, because millions of uninsured people had to pay out-of-pocket costs to get tested for corona ( which ranges from $36 to $180 per test), they refrained from checking their covid-status. This has resulted in the spread of disease even more. 

The impact of  COVID-19 in rural America

According to another RWJD report based on the impact of coronavirus on households in rural America, care delays were even more common in rural areas. As stated in the report, “More than half of rural households (53%) report anyone in their household is living with a chronic illness, while 42% report anyone in their household is at high risk of developing serious illness from COVID-19 due to their age or underlying medical conditions.” Again, being non-white double- disenfranchises people: “Black or Latino rural households (85%) report facing serious financial problems during the coronavirus outbreak, compared to 36% of white rural households.”

What is more, since jobs and schools became online during COVID, one in three rural households (34%) experienced serious problems while connecting to the internet. Also, some didn’t have a high-speed internet connection at home.

 The USA health care system doesn’t really care

image of North America's map contoured in red colour in which 92% of the Americans want changes in the health care system ; at the bottom it reads: " voters actually agree: our system is sick"
Credit: healthpopulie.com

“You’re on earth. There’s no cure for that.”- Samuel Beckett

The USA healthcare system is extremely complex, which makes it challenging to find the best health plan. You need to take into consideration where you live and familiarize yourself with healthcare terms. Most of the insurance companies covered in this article provide glossaries and explain all the complicated structures in simplified terms on their websites. But that is not the only problem. The main question is this: Does all this knowledge actually help, especially when the system doesn’t prioritize equality and equal access to health care services?

In the USA, healthcare is everyone’s problem, not specific to any group.  Yet, racial and ethnic minorities and the lowest-paid workers suffer more than the others. Due to inefficient federal regulations, there is no nationwide practice and no coordination between the different players. Most of the burden is on the employers’ shoulders as well as the citizens’. As Hacker presents the problem:

“Health insecurity is not confined to one part of the population. It is experienced by all Americans… As health care costs have skyrocketed, and the proportion of Americans with stable benefits has eroded, health insecurity has become a shared American experience, felt by those who thought they had it made, as well as those just struggling to get by” (31).

And it seems that the USA doesn’t really care, at least about equal distribution of health services. As Dr. Burrough says, if you don’t understand what is happening in the USA, just follow the money. Then, you will find your answers.

References:

Hacker, Jacob. “The Health Care for America Plan.” New Labor Forum, Vol. 16, No. 3/4 (Fall, 2007), pp. 30-40.

Valuepenguin healthcare insurance view 

The Robert Wood Johnson Foundation Reports

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