Ran Mizrahi – Vp of Medical Underwriting, DavidShield
The United States is considered the dream of many, the land of infinite opportunities, where you can win a high standard of living and succeed in a big way. But alongside dreams and anticipation, the U.S. can sometimes make certain areas of everyday life cumbersome.
Such as the field of medical insurance, which has become one of the burning issues on the agenda. In recent years, we have seen the obama administration’s many changes to the state’s health insurance system – the PPACA (Patient Protection and Affordable Care Act) or the Obamacare People’s Language.
And if it wasn’t enough that the U.S. medicaid system was cumbersome and complicated even before that, then the Obama administration’s attempt to make Medicaid accessible to the general population has made it even more complicated. In a nutshell, the Obamacare approach is trying to create a kind of social security, mandatory, where private insurance, in a place where private insurance, in all its characteristics, dominates.
Obamacare – for
Proponents of the system argue that medical insurance for the general population, which includes a component of preventive testing, will reduce the costs of medical services. The population, which is currently uninsured, will be diagnosed and treated in advance and will not reach medical conditions that require expensive and complicated treatment due to late diagnosis. This population, which arrives at the hospital in an advanced medical condition, probably cannot pay the medical expenses (otherwise they would purchase medical insurance) and thus these expenses are rolled over to the American taxpayer.
The method also states that all insurance companies are obligated to propose a basic plan whose conditions were established in the law, without examining the applicant’s medical condition, thus ensuring a uniform (and reasonable) cost to each interested person. Within this framework, every taxpayer must join one of the proposed plans, and if not, will be forced to pay additional tax for being uninsured. Finally, employers are obligated to purchase insurance coverage for their employees (if the number of employees exceeds 50). If not, they will be fined accordingly.
Thus, at the end of the implementation program, the number of insured paying premiums that are supposed to increase as a result of the move will create an increase in the income of insurance companies, which will enable them to cope with sick populations at fixed premiums. In addition, the cost of medical services consumed due to tests for early diagnosis of diseases will be reduced.
What do the dissidents say?
Opponents of the system argue that Obamacare created a situation in which many companies’ insurance plans did not meet the basic conditions, since they were sold on demand and by personalization. That’s why insurance companies were forced to cancel existing insurance and require policyholders to purchase the plans dictated by the law, resulting in a loss of tens of millions of dollars to insurance companies.
The insurance obligation that applies to the employer has created the opposite situation. Many employers, who had already provided their employees with medical insurance as part of an employee benefit, canceled the coverages and preferred to pay the fine, which came out significantly cheaper financially for the business. So it turned out that many workers had to find themselves health insurance under Obamacare, which of course is less comprehensive than the insurance they had so far.
In practice, an absurd situation was created in which the costs of medical services actually increased due to increased consumption. Medical suppliers had to prepare accordingly with manpower and other equipment, and also that taxes on medical accessories and medicines also increased, in order to minimize the resulting financial gap. Some insurance companies have even withdrawn from Obamacare and do not offer compliant plans on the law’s requirement, fearing many losses, such as U.S. company Aetna, which announced a few months ago that it would roll out most of the plans proposed in 15 different states.
Obamacare in the Age of Trump
On his campaign trail, President-elect Donald Trump promised to repeal Obamacare altogether, but as of now, the law does not appear to be repealed in the near future. He argued that a number of fundamental changes to the law should be made in order to avoid a deficit in the health insurance market. For example, repealing the prohibition that states that insurance companies operate in only one country, and importing medicines from abroad, in order to generate competition and reduce their cost.
The changes the Trump administration seeks to make (and even repeal much of Obamacare) are creating total chaos in the U.S. health insurance market.
U.S. Mobile Health Insurance
Alongside U.S. citizens are also quite a few people who have made relocations to the U.S., who have purchased health insurance in their home country. Under Obamacare, proposals were submitted to regulations relating to this segment of the population relative to non-U.S. insurers, but at this stage these regulations remain in place and it is clear that it will not be addressed anytime soon.
The costs of medical services in the U.S. are not yet regulated, and therefore these are very high rates for relatively simple medical services, not to mention emergency hospitalizations that may, at best, reach tens of thousands of dollars for short two-day hospitalization.
It should be noted that despite the chaos created in the system, a number of basic principles related to the way services are received in the United States have been preserved. For a simple understanding of the matter, I chose the two most common principles currently in the United States in terms of the type of basic insurance currently required: HMO and PPO.
HMO – Health Maintenance Organization
The HMO method is somewhat reminiscent of the health services we know in the framework of the HMOs in Israel.
In medical insurance that includes the HMO component, the policyholder receives a list of doctors from which he must choose his “GP”. When elected, receiving the services under the insurance plan will be only through a referral from the “family doctor” and will be carried out under his supervision. The program will usually only apply to medical service providers with whom the insurance company is in the agreement, and of course it is necessary to wait for a free appointment, pay deductibles, and so on.
Some programs only allow services to be received in a particular country and not in the entire United States. Contacting medical service providers who are not in the agreement will be paid in full by the policyholder, so that the choice of doctors in this track is fundamentally limited.
PPO – Preferred Provider Organization
This is the most common method in the U.S. The program allows the insured the freedom of choice of medical service providers, and in most cases ensures high availability to receive medical services, without depending on the referral from the “family doctor”. The PPO has a special arrangement with doctors, hospitals and other medical service providers who are in a direct agreement with the insurance companies in favor of providing medical services to their policyholders.
This method also allows access to medical service providers who are not in an agreement with the insurance company and to pay a deductible fee defined in the selected insurance plan.
Conclusions: Prepare in advance
When moving to a destination as far away as the UNITED States, you can’t trust that if anything happens, you can return to Israel for medical treatment. It’s a mindset that could torpedo all the relocation programs you’ve worked so hard for. Medical events can occur anywhere, anytime, and you must be prepared for any scenario. The medical insurance is advisable and it is recommended to close in advance and start the transition with one less concern.
Davidschild’s international insurance program, for example, enables the receipt of medical services all over the world and operates using the PPO method mentioned above. For more information click .
The writer is vp of medical underwriting at DavidShield
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