Health Insurance in the US

If you’re planning a move to the US, it makes sense to get your head around American healthcare. It’s a far cry from the public systems you find in other parts of the world, and the costs can vary widely from state to state. 

Yes, in the Land of the Free, one thing that is certainly not free is medical attention. Allow us to explain the ins and outs of it all, and gently urge you to get your health insurance sorted before you head stateside.

If you’ve already decided that you need private medical cover in the US, we recommend the services of Cigna. With 95 million customers world wide and four different pricing plans, they’ll be able to sort you out with just the right cover. Start building your customised plan today with a free quote from Cigna. 

US Healthcare: Key Stats

What’s on this page?

01 | How does the US healthcare system work?
02 | What is Obamacare, and does it apply to expats?
03 | Do expats need private health insurance in the US?
04 | How much does American health insurance cost?
05 | What happens if you don’t have medical cover?
06 | Will your US employer provide health insurance?
07 | Advice for expats going to America

How does the US healthcare system work?

Basic healthcare is not considered a “universal right” in America. There is no NHS-equivalent.

Instead, the industry is completely privatised. There’s a network of hospitals and doctors surgeries across the nation, all run by independent companies. In America, once someone has received treatment, they’re left with a bill –  which can range from hefty to downright massive. It all depends on what the treatment was for. 

This is where insurance companies come in. If they can afford it, most Americans (91.2%, to be precise) have some form of medical cover. This means that, by paying money each month to their provider, they won’t have to foot the bill once something bad happens. 

And in the US, the cost of healthcare is so high that – without medical cover – “footing the bill” can mean bankruptcy.

Fortunately, the US government has two schemes in place to help Americans get the healthcare they need…

What is Medicaid?

Established in 1965, Medicaid is a national public health insurance program funded by income tax. If an individual has an income below the Federal Poverty Level or has a particular disability, they will have their medical cover partially (or entirely) paid for by their state government. 

This ‘cover’ includes medicines, doctors, hospitalisations, custodial care, and nursing home care. In 2018, over 17% of the US population was covered by Medicaid. 

If you think you might meet the Medicaid requirements as an expat, be aware that you typically have to wait around five years after receiving official immigration status before you can access the service. 

What is Medicare?

Medicare is for people aged 65 or over, regardless of income. If an individual has paid Medicare taxes on their earnings while working, they automatically qualify for Medicare. For most people, Medicare support provides a huge reduction in insurance premiums, but still requires a small payment each month.

Immigrants cannot access Medicare benefits unless they have worked in the US for at least 40 quarters (around 10 years).

What is Obamacare?

Obamacare, officially titled the Affordable Care Act (ACA), was a piece of legislation passed in 2010 to improve American access to healthcare. 

Before Obama stepped in, American health insurers were free to do some pretty unpleasant things. Namely, they could refuse to insure someone with pre-existing conditions, and they could drop someone from their policy if they became sick. This meant medical cover was actually quite a poor safety net for many Americans. 

Obamacare made both of these things illegal. On top of this, it also mandated that everyone buy health insurance, or otherwise face a financial penalty. By forcing all Americans to get medical cover – even the young, healthy ones – it significantly lowered the average cost of insurance premiums across the country. 

It is estimated that Obamacare put another 24 million Americans on health insurance policies.

Does Obamacare apply to expats?

In short: no. 

Until January 2019, the obligation to purchase some form of health insurance applied to expats and Americans alike – but President Trump had something to say about this, and he promptly changed the law. 

Today, the US Government does not require anyone to subscribe to an ACA-compliant health insurance policy. However, a handful of states still impose a penalty on people who do not comply with the ACA. These are:

• California
• Vermont
• Massachusetts
• New Jersey

Other states are also currently processing legislation that will make health insurance compulsory, so before you move to America, check your new state’s laws.

Do expats need private health insurance in the US?

In short: yes.

Once you’re in the US, it is extremely important that you have some form of medical cover, even if it’s the most basic policy on offer. 

Without insurance, a single accident or illness could leave you with an enormous bill. You’re going to America to explore the Promised Land, not to be saddled with debt. 

That’s why we’ve partnered with Cigna for private medical insurance in the US. With four levels of annual cover to choose from and extra modules for more flexibility, Cigna will sort you out with a plan that suits your needs.

Start building a customised plan with a free quote to protect your most important assets – you and your family.

Is health insurance legally required to gain entry into the US?

Not yet, but that is a big ‘yet’. 

At the end of 2019, the US Government attempted to change the law so that everyone entering America had to have either a) medical cover for at least one year, or b) sufficient funds to pay for any emergencies. This law would exclude tourists, children, and returning residents (i.e. the SB-1 visa). 

However, this change was blocked by Michael Simon, a federal judge in Oregon, who claimed that this legislation was unlawful, given that it obstructs poorer people from entering the US, and infringes on aspects of the Constitution. 

Simon has extended his order indefinitely, but it is not known whether the Trump administration will find a way around this.

How much does health insurance cost in the US?

The annual cost of health insurance for the average American is $3,414 per year, according to Bureau of Labor Statistics data from 2017. This equates to around $285 per month. 

However, healthcare costs can vary quite significantly between states. 

In a 2019 survey by the Kaiser Family Foundation (KFF), which analysed insurers across the country using a ‘benchmark plan’, they found that some Americans pay a lot more than others for ultimately the same thing. 

That may still be better than being surprised by a hefty hospital bill though, especially considering that 12% of health expenditure in the US is paid out of pocket, according to Statista.

What will health insurance cost for a UK expat in the US?

Of course, typical premiums for US citizens aren’t exactly the same as those for British expats. 

It all depends on your age, health, where you’re going in America, and how extensive you want your medical cover to be. For instance, a young adult male moving from the UK to the US might expect to pay around $180-$200 per month for basic health insurance. 

Want to find out how much you can expect to pay? Start creating your own insurance policy with Cigna today.

For example, the nation’s lowest monthly premium for a 27-year-old’s benchmark plan was $282 (in New Mexico), while the highest was $723 (in Wyoming).

How many Americans don’t have health insurance?

As you can probably tell, the typical cost of health insurance in the US can be very prohibitive for some people. 

In 2018, about 8.5% of Americans (or 27.5 million people) didn’t have health insurance. 

And this obviously affects how many people actually receive necessary treatment. According to the CDC, one out of five uninsured people skip treatment because of cost.

What happens if you don’t have medical cover in the US?

Despite there no longer being any kind of penalty (in most states) for not having health insurance, adequate medical cover is still an essential expense. 

First and foremost, you’ll have to pay an awful lot of money for medical care that could otherwise have been covered by your insurer. 

Check out the typical cost of certain medical procedures without insurance (according to the International Federation of Health Plans). 

Will your US employer provide health insurance?

Securing medical cover from your employer is usually the most cost-effective way of getting health insurance in the US. 

According to SHRM, employers typically cover almost 70% of their workforce’s healthcare costs, although this can drop closer to 50% for smaller employers. 

Based on data from the 2019 KFF study, about 49% of the US population receive health insurance sponsored by their employer (also known as group health insurance). 

The states leading the way in this category are Illinois, Texas, New York, California, and Florida. 

As you can expect, the average premium paid by an American with group health insurance is significantly lower than those paid by Americans who are going it alone. According to KFF, it’s around $103.50 per month.

What if you can’t get employer-sponsored health insurance?

Given just 49% of Americans have group health insurance, it’s very possible that your new US employer won’t offer you any medical cover. 

If this is the case, unfortunately there’s only one option: you’ll have to sort out your own medical cover. 

In particular, if you are moving to the US as a self-employed, part-time employed, unemployed, or retired individual, group health insurance is out of the question. 

Advice for expats going to the US

We hope you found the above information useful. If you’re looking to find out more about America before your big move, please check out our other US pages:

• A Complete Guide to Moving to the US
• 21 Things to Know Before You Move to the US
• How To Get An American Visa