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Health Insurance for Expats in the United States Of America

Submitted: August 2013

Health insurance in the US is a must-have, as it is strongly encouraged by the Government and healthcare is very expensive. In addition, health insurance may be mandatory for certain categories of visas. Don’t refrain from taking out health insurance unless you have no choice but to do so. It is advisable to get your insurance arrangements in order prior to entering the US.

There is always a risk of being uninsured, especially if you are old or if you have a pre-existing condition. This is because insurance premiums may become unaffordable if you a viewed as a high risk individual. The Medicare programme may mitigate this, but it is not designed to be generous. See National Health Service for Expats in the US.

A US insurer may still ask for your social security number. In that case, be upfront and ask them to identify you in another way.

Typically, you need not pay upfront and apply for reimbursement from your insurer. Instead, US healthcare providers are likely to be happy with collecting your insurance details only. As fees can be tremendous, it is best to carry your insurance details with you. However, the reverse process is likely to apply when you purchase drugs.

Tax treatment of health insurance

Employer-provided health insurance is not a taxable benefit in kind.

Contributions towards a Health Savings Account (HSA) are also tax-deductible. HSAs are like regular savings accounts, except that you are not allowed to withdraw your funds unless you incur qualifying healthcare expenditures.

The advantage of HSAs is that they put you in control of your own healthcare costs. On the flip side of the coin, HSAs will not help you much if you need to spend hundreds of thousands of dollars for any unfortunate reason.

International cover

You should check the geographical coverage of your existing insurance policy, if you have any.

If you have a foreign policy but you haven’t been sold it as an international insurance cover specifically designed for expats, your policy is unlikely to work in the US. In that case, you should let your insurer know that you are moving to the US, and switch to an international cover. Your insurer is likely to charge you extra for this, but do bear in mind that the very fact of being insured in several countries carries an extra burden as well.

A good international cover would insure you against:

  • medical costs in the US
  • medical costs in your home country (or another relevant foreign country), and
  • medical evacuation costs (without adequate insurance, these can be well above  $10,000, or even in excess of $50,000).

 

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