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National Health Service for Expats in the United States Of America

Submitted: August 2013

The US healthcare system is primarily insurance-based, although additional healthcare programmes are financed through the tax system. The US doesn’t run any national health service, although there might be public hospitals at state-level. Accordingly healthcare is not free in the US.

Instead of directly providing subsidised healthcare, the Federal Government encourages its citizens to take out private health insurance. This is why health insurance premiums are tax-deductible for US tax purposes. Some regulated health savings accounts may also qualify for tax deductibility. See Health Insurance for Expats in the US.

Aside from the private insurance system, there is a small social insurance system to help low-income individuals, the elderly, and the disabled. As a consequence, all US taxpayers are required to pay taxes to finance social insurance programmes. However, the US welfare system is quite residual, and it is designed to help only those who need it most.

You might wish to check if you need to apply for a US social security number. If you are not eligible to lawfully work in the US, you are unlikely to need a social security number.

 

Medicare in the USA

In a purely private system, your insurance premiums can spiral out of control if you have a disability or a bad pre-existing condition. Premiums may also rise significantly when you are over 50. These outcomes can be mitigated through social insurance, whereby the underlying costs are shared by all taxpayers.

Medicare is a 100% federal programme which is designed to make sure that your right to health is not going to be jeopardised by your age or a medical condition of yours. In other words, Medicare is supposed to spare you ultra-high insurance premiums rather than fully foot your bills. Consequently, Medicare beneficiaries are still required to pay premiums, deductibles and co-insurance with their own money.

Medicare covers only healthcare costs which fall within the concept of “medical necessity”. Cosmetic surgeries are therefore very likely to be excluded. Dental care, however, is more on a case-by-case basis. Typically, dental care involving a hospital at some point may be within the scope of Medicare. However, Medicare should not pay for things like routine check-ups, dentures, fillings, and extractions.

You won’t get any support from the Medicare programme unless you enrol for it.

Eligible persons

You are an eligible person if:

  • you are: (a) aged 65 or over, (b) a US citizen or a resident alien for at least five years, and (c) you or your spouse have paid Medicare taxes for at least 10 years; or
  • you are: (a) aged under 65, (b) disabled, (c) in receipt of Social Security Disability Insurance (SSDI) payments, and (d) have been eligible for SSDI benefits for at least 24 months; or
  • you need a kidney transplant or you have continuing dialysis for end stage renal disease; or
  • you are eligible for SSDI benefits and you have amyotrophic lateral sclerosis

Medicare Parts

There are four parts in the Medicare programme:

  • Part A is supposed to cover hospital costs.
  • Part B is supposed to cover the costs of qualifying outpatient services and some medical appliances.
  • Part C is geared towards the so-called “Medicare advantage” (MA) plans. MA plans are insurance policies that may cover healthcare expenses that wouldn’t otherwise be covered by Medicare, such as some drugs, eye care, and dental care. The Medicare programme then pays a fixed amount towards your insurance premiums. Part C is optional, and it is a substitute for Part A and B. MA plans can be helpful if you wish to tailor you healthcare cover to your individual needs. The downside of MA plans is that members can only use specific healthcare providers.
  • Part D is designed to help you with the cost of medicines. You can get Part D benefit only if you have signed up for Prescription Drug Plans (PDP). If you have elected to be covered by Part C, you must have a MA plan with prescription drug coverage (MA-PD) to be eligible for Part D benefits. PDPs are insurance products that you take out from a private insurance provider. These are designed to allow you to choose which drugs you want to be covered for. Thus, you can decide not to be covered at all on some drugs while having a generous cover on your favourite drugs.

Out-of-pocket costs

You are not covered by Medicare until you have paid a “deductible” with your own funds. Once you have paid your deductible, the Medicare programme pays a share of your additional bills (typically 80%). The shortfall is called “coinsurance”.

In addition to that, Medicare enrolees have to pay “premiums” each month. Part A premiums depend on your previous working pattern in the US, and you don’t have to pay Part A premiums if you (or your spouse) have paid US Medicare taxes for at least 10 years. However, you have to pay Part B premiums, regardless of your previous contributions to the US tax system.

In 2013, the key rates are as follows

Part A

Part B

Premium

Up to $441

Premium

$104.9

Deductible (per hospital stay)

$1,184

Deductible

$147

Higher charges may apply if your income exceeds $85,000 per year ($170,000 if you file a joint tax return). Additionally, you may have to pay a 10% penalty if you are Medicare-eligible but not enrolled. This penalty is payable only when you later decide to enrol for Medicare.

For more information on out-of-pocket costs, click here.

 

Medicaid

Medicaid is a means-tested programme for low-income individuals, and it is a joint federal-state programme (unlike Medicare). However, it is quite limited, and many poor people are not eligible for Medicaid benefits.

In 2010, the Patient Protection and Affordable Care Act extended Medicaid eligibility requirements, effective from 1 January 2014. Under the new law, you are eligible for Medicaid if:

In 2013, the FPL is $11,490 for a single household not living in Alaska or Hawaii.

The future of the Medicaid programme is all but clear, and the rules may vary from one state to another. Many Republican-led states have already made clear that they would not sign up to the extension of the Medicaid programme.

Travel advice

Many countries provide updated travel information to their citizens, and this often includes health advice. You should regularly check the Foreign Office website of your home country to see if there are any specific steps you need to make. Alternatively, you can go to your local embassy in the US.

 

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