Well, I am not here to poke fun at America’s healthcare system. You will find numerous articles and videos lambasting the dysfunctional state of its affairs. I want to write this article with the sole purpose of helping people to navigate through complex and overbearing important aspects of their lives.

You might have heard that the US does not have Universal health care. Which runs contrary to how most of the developed nations have been providing healthcare to its citizens. Depending on your age and income brackets it is very likely that you may need to plan for your own health insurance. And that expense is not cheap.

Here are some reasons why health care cost in America are so high

1. Administrative processing.:- According to 2017 study, Administrative costs made up more than 1/3rd of total health care cost in US.
2. Higher utilization of costly medical technology
3. À la carte system while paying for the services used.
4. High cost of medicines
5. Health Care professionals are paid at higher rate than their counterparts in Europe and Canada
6. Lack of Government Regulation
7. Symbiotic relationship between Doctors, Hospitals, pharmaceuticals  and Insurance providers

What options do we have?

1> Medicare:

Medicare is a government national health insurance program in the United States, begun in 1965 under the Social Security Administration (SSA) and now administered by the Centers for Medicare and Medicaid Services (CMS). It primarily provides health insurance for Americans aged 65 and older, but also for some younger people with disability status as determined by the SSA. To know more about Medicare, please visit: Medicare

2>Medicaid:

Medicaid in the United States is a federal and state program that helps with healthcare costs for some people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, including nursing home care and personal care services. 

To know more if you are eligible for medicaid please visit the government site: Medicare Eligibility

The main difference between the two programs is that Medicaid covers healthcare costs for people with low incomes while Medicare provides health coverage for the elderly. 

3> Private Insurance: Employer Based:

If you don’t qualify for either medicare or medicaid, you  will need to figure out a way to be covered by private insurance. If you are lucky enough to be employed by an employer who partially or fully covers your insurance payments, you do receive insurance at a subsidized rate.

4> Private Insurance: Self – purchased.

If unfortunately your employer is not big enough to provide health insurance or you are part time worker or freelancer, you will need to pay for your own insurance.

Here is a glossary of relevant terms before you dive into individual plans.

Glossary of Insurance terms and jargons

For private insurances, you typically have a choice between the following plans. They differ on premium, coverage and benefits.

• Health maintenance organizations (HMOs)
• Preferred provider organizations (PPOs)
• Exclusive provider organizations (EPOs)
• Point-of-service (POS) plans
• High-deductible health plans (HDHPs), which may be linked to health savings accounts (HSAs)

To cut a long story short, the higher the premium you pay every month/interval , the less you will end up paying when you actually need medical service.

Choosing a correct health insurance plan is important not only for your medical health but also for your financial well being. Unforeseen and uncovered medical costs will significantly affect your finances in America and will threaten to derail your journey of achieving the American dream.