In a country where healthcare is the most expensive in the world, getting insurance is an absolute necessity. But making a choice can seem difficult.
In the United States, an expatriate can purchase Obamacare health insurance plans for their medical coverage.
And also, since 2019, it is possible to freely choose policies outside of this system.
In this article, you will learn what is Obamacare insurance. And if it is a good option for expats or if it’s better to get a policy with another private insurer.
What Is Obamacare Insurance?
Obamacare Compliant Health Insurance: Non-mandatory in Most Cases
The U.S. health care system relies almost entirely on private insurance, and care is very expensive.
The Affordable Care Act (ACA or Obamacare) reduced the number of people without health coverage in the U.S.
It made it mandatory for all permanent residents to have Obamacare compliant insurance (or ACA compliant).
These policies comply with the rules set forth by the ACA and must be compared and selected online through marketplaces.
The ACA helps low-income households finance these insurances. And until 2019 there was a penalty for residents opting for a policy outside the Obamacare system.
Since then, only Massachusetts, New Jersey, Vermont, California, and Washington D. C. maintain this tax.
And elsewhere, everyone is free to choose their insurance outside these marketplaces.
Are Obamacare Health Insurance Plans an Interesting Choice?
An Obamacare compliant health insurance has advantages such as:
- The waiver of advance payment of expenses
- No cap on 10 essential benefits
- The insurer is not allowed to cancel a contract in case of excessive consumption
- Coverage of medical history, especially upon arrival in the United States.
But ACA compliant policies also have flaws that can put expatriates at a disadvantage.
They are part of the American medical system. Reimbursements may sometimes be conditional on the completion of treatment in approved networks, or the agreement of a referring physician.
It is also important to be familiar with the concepts specific to this system (coinsurance, out-of-pocket maximum, etc.) to evaluate your real expenses.
Obamacare health insurance plans are often more expensive than expatriate offers. And do not offer different formulas, repatriation coverage, or assistance outside the U.S. territory.
Finally, ACA insurance cannot ensure optimal stability of rates from one year to the next.
Therefore, it is not uncommon for policyholders to experience significant increases at each renewal.
Obamacare vs Private Insurance for Expats
Which One Covers Expatriates’ Needs Better?
For people working in companies with more than 50 employees, the employer must provide insurance. But it rarely takes care of the specific needs of an expat.
Private international insurance is often the best choice. Even if you will have to pay the ACA Penalty Tax.
These insurances are specially designed for expatriates. They offer a greater choice of formulas according to needs and budget. As well as coverage for care received in their home country and repatriation assistance.
The contract and its management are in your native language. The services are easier to understand, and your home country’s law will be applied in case of litigation.
So, as you can see here when comparing Obamacare vs private insurance, the key is to analyze your specific needs.
Social Security With Supplementary Policies
In some cases, expatriates can keep affiliated to their home country’s Social Security system.
But the coverage and reimbursements will be equivalent to the service provided there. And they can be insufficient in a country as expensive as the US.
The best way to ensure appropriate coverage is by subscribing to an additional policy to reinforce the service given by Social Security
As Social Security has a public service mission, it must ensure all citizens who request it. It’s an interesting solution in case of medical pre-existing conditions.
First Dollar Insurances Instead of Obamacare Health Insurance Plans
International insurance companies offer so-called “first dollar” policies. They cover health expenses from the first dollar incurred.
Most of the time, they are more suitable for expats than the Obamacare health insurance plans.
These policies generally offer good value for money by matching reimbursements to the actual cost of care in the U.S. And ensure strong partnerships with local health networks.
However, in the case of medical history, increases or exclusions of coverage may apply.