How U.S. Health Insurance Works

The cost of healthcare in the U.S. can be very high. Depending on the type of care received, a single doctor's office visit could cost several hundred dollars, and a typical three-day hospital stay could cost tens of thousands (or even more). Since we don't know when we might get sick or hurt or how much care we might require, most of us would not be able to afford such high costs if we get sick. Such charges can be brought down to more manageable levels with the help of health insurance.

Typically, a health insurance company will receive an upfront premium payment from the consumer (you), allowing you to share the "risk" with many other enrollees who are also paying a similar amount. Since most people are generally healthy, the insurance company can use the premium money collected to pay the costs of the (relatively) few enrollees who become ill or are injured. As you might expect, insurance companies have done extensive research on risk, and their objective is to collect enough premiums to pay for the enrollees' medical expenses. The U.S. has a wide variety of health insurance plans and a wide range of regulations and care arrangements.

The three crucial questions listed below should be considered when choosing the most beneficial health insurance.

Q1. Where can I get medical care?

Influencing provider access is one method health insurance plans use to reduce costs. Examples of providers include doctors, hospitals, labs, pharmacies, and other companies. Many insurance companies have agreements with a particular network of providers who have agreed to offer services to plan participants at a discounted rate.

The insurance company may only pay for the service(s) rendered if a provider is in a plan's network, or it may pay less than it would for care received from providers who are. This implies that the enrollee seeking care outside the network may be responsible for a much higher cost-sharing obligation. It's crucial to comprehend this idea, particularly if you're originally from somewhere other than the Stanford region.

You might not be able to get the care you require in the Stanford area if you have a plan through a parent, for instance, if the network of that plan is in your hometown, or you might pay significantly more to get that care.

Q2. What does the plan cover?

Increased standardization of insurance plan benefits is one of the things that the Affordable Care Act's health care reform in the U.S. has accomplished. Before this standardization, the benefits provided varied greatly between plans. As an illustration, some plans paid for prescriptions while others did not. Projects must now offer several "essential health benefits" in the United States, such as

• Emergency assistance

• Hospitalization

• In-lab examinations

• Newborn and maternity care

• Treatment for substance abuse and mental illness

• (Doctors and other services you receive outside of a hospital) Outpatient care

• Services for children, such as dental and eye care

• Drugs on prescription

• Preventive services, such as some immunizations and chronic disease management

• Therapeutic services

Asking "What does the plan cover?" is crucial for our international student population because they may be considering insurance through a non-U.S.-based plan.

Q3. How much will it cost?

The cost of insurance is challenging to understand. Our overview mentioned paying a premium to sign up for a plan. This is a cost that is disclosed to you upfront.

Unfortunately, for most plans, there are additional expenses for the care you receive. When you access care, there are typically costs as well. Such charges are recorded as deductibles, coinsurance, and copays (see definitions below), and they reflect the portion of the cost of care you are responsible for paying out of pocket. Generally, you will pay less when you access care the more you pay in premiums upfront. The more you pay for care, the less you will have to pay dividends.

Our students must decide whether to pay (a more significant share) now or later. You will be responsible for covering the cost of the care you receive. To reduce the expenses incurred at the time of service as much as possible, we have adopted the stance that paying a larger share of the upfront premium is preferable. We concluded that we want to avoid any obstacle to care, like a high copay at the time of service, to deter students from receiving care. When necessary, we want students to have access to medical care.