A mama with ideas...

While this series is aimed at explaining the US medical care system to expats, I am going to start by giving a brief overview of the government funded insurance programs that exist to support US citizens and legal permanent residents with low incomes. The reason for this is that I was utterly bamboozled by the names being bandied around when I first encountered a healthcare provider in America and so I think it is helpful to get the broader picture.

Back in 2010 when we were relocating to the US from the UK, one of our 18 month old twins ended up with a high fever on the flight from London Heathrow to Houston. Talk about bad timing! A few days later and he had developed a blotchy rash across his torso and I was starting to worry. In the UK, I would probably have called the nurse at our local GPs office for some reassurance, but in an unfamiliar environment and without a regular medical provider I panicked a bit. We called my husband's employer who put us in touch with our employer-sponsored medical insurer to find out what to do... at this point they hadn't even issued us with our policy details! Thankfully, they emailed me details of a paediatrician not too far from our temporary accommodation and I took the Shouty One to get checked out.

This was my first encounter with the forms you have to complete when visiting a healthcare provider in the US. I was surprised they didn't want to know my inseam length and favourite colour on top of all the other information!!! Unfortunately, being in the country for less than 3 days I was still jet lagged and had no idea what most of the questions were about. I didn't have a permanent address, US telephone number and had no idea what SSN# and DL# stood for (social security number and driving licence number, not that I had obtained either at the time)! And I must have looked like a right prat when I asked the receptionist whether she knew if I had Medicaid?

So, even though it probably doesn't apply to most of you reading this article, I AM going to give a quick summary of all types of insurance, including those funded by state and federal government for some US citizens!

NOTE: A glossary of terms is at the bottom of this post.

Another caveat: please remember that this is a high-level overview.  Check the details of your own medical policy carefully as every one is different and specific things may or may not be covered by your own policy.

A - MEDICAID, CHIPS, MEDICARE & MEDIGAP...



Medicaid is a means-tested federal and state funded insurance program. It was expanded in 2010 by the Affordable Care Act (nicknamed "Obamacare") to include individuals and families with incomes under 133% of the poverty threshold. In 2011, this was $29,700 annual income for a family of four. Medicaid beneficiaries receive free treatment for a limited number of healthcare services, but in some states people are required to pay a small co-payment (a set fee collected at time of treatment by the healthcare provider).

CHIPS (Children's Health Insurance Programs) is a supplementary program that provides healthcare to uninsured children under the age of 19 who come from low-income families that don't qualify for Medicaid.

Medicare is also a means-tested state funded plan but it's aim is to assist low-income individuals over the age of 65 and people that are disabled and unable to work. It provides Hospital Insurance (part A) for eligible individuals and covers limited costs incurred by patients requiring hospitalisation as an in-patient... assuming they paid FICA tax (similar to National Insurance contributions in UK) for at least 10 years. Additional coverage must be paid for by the individual if they need Medical Insurance (Part B), e.g. to see a doctor/GP. Further coverage can be purchased to cover extra costs (Part C) & prescriptions (Part D).

Medigap insurance is private insurance that can be purchased by individuals to supplement Medicare.


B - Private Medical Insurance



60% of people in the US participate in an employer sponsored health insurance scheme. This type of insurance is paid for in whole, or in part, by businesses on behalf of their employees as part of an employee benefit package. Although workers are effectively paid less than they would be (because of the cost of insurance premiums to the employer), this type of insurance offers several benefits to workers, notably economies of scale, whereby they qualify for group discounts.

Only 9% of people in the US have individual health insurance that they have purchased directly from the insurer. In this case, the individual pays the entire premium without benefit of an employer contribution. In general, overall out-of-pocket costs for these types of plans are higher than employer-sponsored schemes.

There are many different types of policies, both employer-sponsored and individually purchased.  Below is a summary of some of the common types:

1.  Traditional Indemnity (sometimes called Private Fee-For-Service, PFFS)
This is the most basic type of healthcare insurance available, whereby beneficiaries pay a monthly premium and can submit receipts for their medical expenses to their insurer for re-imbursement, as long as they are services specifically covered by the policy.


2.  HMO (Health Maintenance Organization)
HMOs were historically called pre-paid Health Plans and are still sometimes referred to as these. Key features of an HMO plan:

- Patients are required to choose a primary care physician (PCP), like a GP in the UK. Women can select to have an OB/GYN as their PCP. The PCP will take care of most of an individuals healthcare needs.

- If the individual needs to see a specialist, they must obtain a referral from their PCP first. HMO policies also require beneficiaries to only see approved (in-network) health care providers.

- Expenses usually include the monthly insurance premiums and co-payments (a fixed dollar amount paid every time an individual sees a physician or buys a prescription). The co-payment is paid at the time of service directly to the provider and no further payments required.  This is particularly beneficial to expectant mothers whose policy covers maternity services.  They often only have to pay a co-pay at their first doctors visit and then all subsequent care during the pregnancy is covered.

- HMOs often provide preventive care for a lower co-pay or for free, in order to keep members from developing a preventable condition that would require a great deal of medical services, e.g. immunisations, well-baby checkups, mammograms etc...

- Experimental treatments and elective services that are not medically necessary (such as elective plastic surgery) are almost never covered.


3.  Preferred Provider Organization (PPO)
In the case of a PPO policy, enrollees are encouraged to seek healthcare services from certain 'preferred' healthcare providers that have a negotiated discount with the insurance company.  Key features:

- Patients have greater flexibility.  They do not have to enroll with a Primary Care Physician and do not require a referral from a PCP in order to see a specialist.  They can chose to visit ANY healthcare provider they like rather than just those on an approved list.

- Most PPO policies have a deductible. This is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses. In the UK this is called an excess. Deductibles are typically used to deter enrollees claiming for trivial items. Policy holders are required to pay 100% of all medical expenses they incur until they reach the set deductible for their policy. Some policies have cumulative family deductibles.

- Expenses usually include the monthly insurance premiums, the deductible and a co-insurance amount (a percentage of the cost, shared with the insurer).

- The co-insurance amount varies dependent on whether the patient has chosen to see a provider that is in-network or out-of-network. For example, if a patient visits an in-network doctor's and the total bill is $100, they may be required to pay a 20% coinsurance (they will pay the doctor $20 and the insurer will pay the doctor $80).  For out-of-network doctors there may be a 40%/60% split instead.  This encourages policy enrollees to seek in-network providers only.

- Some healthcare providers will expect the deductible and/or coinsurance to be paid at the time of service.  In this case the patient will be given an itemised invoice and receipt.  Other healthcare providers may send a bill for the deductible and/or coinsurance at a later date.  In both cases, the insurance company will send a statement (for information only) to the patient reflecting these payments.

- Some in-network providers will charge a co-payment instead of the coinsurance for certain limited services on a PPO plan.  For example, a 'Wellness Check' (annual health screening for preventative purposes) or an Emergency Room visit may be included on the policy as a service that carries a set co-payment amount.  In the case of both of these, if any 'treatment' or 'service' is required, the patient will usually also be responsible for the deductible/coinsurance.  For example, a friend of mine attended a Well Woman checkup (covered by a co-pay on her policy).  At the end of the appointment, the Doctor asked if she had any questions and she asked about a health issue of concern.  As this was an issue not strictly covered by the Well Woman Check-up, she was billed for a doctor's visit in addition to the co-pay!

- PPOs have a set out-of-pocket maximum.  This is a cap or limit on the amount that an individual will have to spend in any plan year.  Due to the variability in out‐of‐pockets costs on a PPO plan, out‐of‐pocket maximums help PPO members gauge the total they will pay in any one plan year. Once the out-of-pocket maximum has been reached, the insurance company will pay 100% of the cost of medical services.  The maximums are usually higher for out‐of‐network services and the maximums do not cross accumulate.


3.  Point of Service (POS)
A point of service plan, or POS plan, combines characteristics of traditional indemnity, HMO and PPO plans.

- Individuals with a POS plan only choose which system to use at the time of service. Like an HMO plan, a POS gives lower medical costs in exchange for more limited choice. However, the flexibility of a PPO is there if the patient requires it.

- A patient with a POS plan is required to choose an in-network primary care physician to monitor their health care and to be their "point of service". However, unlike with a traditional HMO, the primary POS physician may then make referrals outside the network if the patient requests it. However, the patient will only receive partial reimbursement by the health insurance company if they choose to take this route.

- For medical visits within the health care network, a co-payment and/or coinsurance is collected and the paperwork is completed for the patient. If the patient chooses to obtain a referral outside the network, it is the patient's responsibility to fill out the forms, send bills in for payment, and keep an accurate account of health care receipts.

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I hope the overview of policy types has been helpful.  Please see the other posts in this series for more information.

PART 1: An Expats Guide to Understanding the US Medical System ... an Overview
This article gives an overview of the US Medical System as summarised by this flow diagram.




And coming soon...
PART 3: An Expats Guide to Understanding the US Medical System ... Where to go for healthcare
PART 4: An Expats Guide to Understanding the US Medical System ... Paying the bill

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GLOSSARY OF TERMS

CO-PAYMENT (a.k.a. CO-PAY) - A fixed-dollar amount that is paid at the time a health service or treatment is received.

CO-INSURANCE - A percentage of the cost of care that the patient is responsible for paying. For example, if a doctor's visit is $100 and you have a 20% coinsurance, you will pay the doctor $20 and your health plan will pay the doctor $80.

DEDUCTIBLE - A set amount that the patient is responsible for paying before the insurance benefits begin. An excess. For example, if you have a $1000 deductible, you are responsible for paying out $1000 from your pocket before the insurance will start paying for your health services.

IN-NETWORK - Refers to providers or health care facilities with whom the insurance company has negotiated a discount. Insured individuals usually pay less when using an in-network provider, because those networks provide services at lower cost to the insurance companies with which they have contracts. Services by out-of-network providers may not be covered, or covered only in part by an individual’s insurance company.

OUT-OF-POCKET MAXIMUM - A predetermined limited amount of money that an individual must pay out of their own pocket, before an insurance company will pay 100%of the individual's health care expenses.

PRIMARY CARE PHYSICIAN (PCP) - A health care professional (usually a physician) who is responsible for monitoring an individual’s overall health care needs. Like a GP.

Gee whizz... time flies when you're having fun! It's been an absolute age since I blogged on here and I apologise for my tardiness but, frankly, I've been having too much fun elsewhere!!! However, this evening I have been 'abandoned' by Him Indoors who has headed to the pub so I thought I would sit down and spend some time writing.

But what to write about? To be honest, craft projects have been a little thin on the ground of late (see above excuse) and my spare time has been taken up with planning our super duper summer vacation to California. However, a joking comment made by a friend a little while ago has been hanging around in my head. For those of you who haven't followed my blog, I self published a book in January 2013 entitled "The British Expat's Guide to Grocery Shopping in America"... a labour of love based on my 3 years experience of navigating the US grocery stores through the eyes of a Limey expat! Within a week or two of publication I was told by a friend over a glass of wine... "So, you've written about the food shopping, what you should do now is tackle the medical insurance system!" This comment was scoffed at by all in attendance... as no one, I repeat no one, truly understands it all. Even the Americans.

But... it did start the beginnings of an idea deep in my head. There is absolutely no way I am going to try to write a book explaining the US medical insurance system. It is too big, too complicated and I just wouldn't know where to start. The problem is that there are so many different policies out there that are all slightly different that you'd never be able to comprehensively detail all of it. However, that doesn't mean that there isn't the need for a higher level overview... especially one aimed at expats who struggle to understand the terminology let alone the policy intricacies.

So, this is where I come in. Firstly, a caveat. I am a Brit and so have been brought up with the NHS (national health service)... an institution that entitles every British man, woman and child with free healthcare from cradle to grave (if you want it). Obviously, there is the option for private health insurance in the UK in addition to the care available from the NHS but having utilised both, I can honestly say that the care is pretty much the same and usually provided by the same doctors that also work in the NHS (you just get a coffee brought to you by the concierge in the waiting area of a private practise and more convenient appointment times). Obviously, my thoughts on state funded healthcare provision are going to be a little influenced by this background, but I am going to try to refrain from weighing in on the healthcare reform debate ('Obamacare') as I truly don't understand it well enough.





Therefore, this is an overview of the current system and an explanation of terminology (in laymans terms) and usual procedures. Read on to find out more...

OVERVIEW

Healthcare is one of the leading industries in the United States and US hospitals are at the forefront of many medical advancements and cutting edge therapies. I've lost count of the times I've heard local people say here in Houston, "Well, if you're going to get sick, this is the place to do it!" In fact, here in Houston the medical industry rivals the oil & gas industry for dominance. So why is the US falling behind other developed countries in important health indicators such as infant mortality, life expectancy, cardio-vascular diseases, teen pregnancies, disabilities and STDs? The answer is because there is unequal access to healthcare provision. A 2004 Institute of Medicine (IOM) report said: "The United States is among the few industrialized nations in the world that does not guarantee access to health care for its population." Consequently, it is estimated there are 48,000 unnecessary and preventable deaths in the US every year.

This is because nearly all healthcare provision in the US is through private sector businesses. Their objective is to make money. Healthcare is therefore expensive to purchase, and being a big country with a big population, the US government cannot afford to pay for equal access to healthcare for everyone (at least, not with taxation at current levels). Consequently, most individuals in the US opt to have medical insurance to safeguard them against potentially high healthcare costs in the event that they become sick.

BUT... and here's the kicker... private medical insurance is ALSO expensive. The vast majority of people under the age of 65 have to purchase private medical insurance, often sponsored and subsidised by employers as a taxable benefit. The government does what it can and provides state funded or subsidised insurance (Medicaid, CHIPS, Medicare, Medigap etc...) for those in poverty, but for those just above the means tested threshold, often being uninsured and keeping your fingers crossed you don't get sick is the only option. Approximately 16% of the US population is in this position.

One question I often pondered when I first arrived in the US is that surely (having taken the Hippocratic Oath) doctors would/could not turn away a sick or injured person from hospital? And for the uninsured this IS luckily the case thanks to the Emergency Medical Treatment and Active Labor Act enacted by congress in 1986. This act states that hospitals are obliged to treat emergency conditions of ALL patients that present themselves regardless of their citizenship, legal status or ability to pay, until they are stabilised and able to “self-care” following discharge. Note, this does not mean cured. In reality, this means that many uninsured families resort to using the hospital emergency rooms for treating things like ear infections that under 'normal' circumstances would be treated by a GP or primary care physician (who would charge lots of money requiring insurance). Something like 55% of all ER visits now go unpaid, which unfortunately means healthcare providers shift the costs onto those who can pay. A vicious circle indeed.

For those who do purchase medical insurance the levels of coverage vary widely and there are numerous types of policies, the most common types being traditional indemmity (a.k.a. Private Fee For Service, PFFS), Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point of Service (POS) plans. These will be explained in greater detail in Part 2.

The system is huge and very complicated, but for the benefit of a newbie expat trying to understand everything I have summarised the overview above into a flow diagram.





As you would imagine with a topic as BIG as this, there will be a series of posts. Coming soon...

PART 2: An Expats Guide to Understanding the US Medical System ... Types of Insurance
PART 3: An Expats Guide to Understanding the US Medical System ... Where to go for healthcare
PART 4: An Expats Guide to Understanding the US Medical System ... Paying the bill

Being a busy SAHM of three kids, including the terrible twosome, I hate going to the shops.  Actually, hate isn't strong enough... loathe is probably closer!  I really miss being able to do my grocery shopping online, which is becoming almost the norm for busy parents in the UK.  I mean, who wants to spend several hours a week dragging screaming toddlers around the grocery store, when 20 minutes clicking online can have it delivered to your door (for free in a lot of cases!).  Sigh.  That sort of service is unfortunately not available here in Houston.

However, I do use Amazon a lot.  And not just for books!  I buy all my diapers (nappies), wet wipes and even some of my groceries (yes indeed!) from Amazon.  The cost savings are even better when you sign up for their Subscribe & Save Scheme.

For example:


The above link is for the diapers we buy - Pampers Baby Dry (size 4).

• They are selling on Amazon.com today (12th Oct) for $47.19 including the delivery (that works out at 24.6 cents a diaper).  
• That's cheaper than ToysRUs where it would cost you $52.49 to have the same thing delivered (which works out at 27.3 cents a diaper).

However, if you sign up with the Amazon subscription service, you get an ADDITIONAL 30% off every time you order them.  You basically specify how frequently you want them delivered... monthly, every 2 months, every 3 months or every 6 months.

So, the box of diapers actually cost $33.03 each time, which works out at only 17 cents a diaper.

YOU SAVE 10 CENTS EVERY TIME YOU CHANGE YOUR KID'S BUTT!

You can also cancel or skip a shipment whenever you want. Or even cancel your subscription after the first delivery!  And you don't have to lug them home from the store!

UPDATE:  For those of you viewing this from the UK ... looks like Amazon.co.uk also has a similar scheme!


Wait, there's more... if you also sign up for the Amazon Mom thing and spend $25 a month on baby supplies (easy to do if you buy your diapers & wipes), you also qualify for Amazon Prime benefits on all your other purchases.  This means that you get free 2-day priority shipping on any Prime item (which is pretty much everything sold by Amazon).  Genius!

Then, the icing on the cake... you also get sent emails with links to some of their 'secret' discount pages.  They're not really secret, you just can't navigate to them from the main menus!  Here are some recent ones I've been sent...

• 70% off selected Maternity wear
• 70% off selected Baby items
• 70% off selected Dressing Up Costumes - perfect with Halloween coming up!

I heart Amazon.com.  You save me stress and money!




P.S.  Last of all... some Subscribe & Save grocery links for my fellow British Expats:

• Heinz Baked Beans - Pack of 12 cans - These store cupboard staple work out at $1.60 a can, compared to $2.20 in the Grocery stores!
• PG Tips Pyramid Tea Bags - 240-Count Boxes (Pack of 2) - These work out at $4.90 for 80, almost half the price charged by the grocery stores here in Houston!
• Ella's Kitchen Organic Baby Food - 4+months, 3.5-oz Pouches (Pack of 7) - These popular UK baby food pouches work out at $1.35 each with the Subscribe & Save option!

The Big One started 1st Grade (equivalent to Year 2 in the UK) recently, and with that has come a lot of extra responsibility!  He now has homework every evening, comprising a Maths worksheet, reading and a list of spellings to revise for the weekly test.  This was quite a shock to the little man's system coming from the warm and fuzzy environment of Kindergarten where days were spent learning through play and when school was out he was done.  Oh no, he's a big kid now.  And that comes with responsibilities.  And a bitter pill to swallow it has been.

Big One:  "Mummy, I feel like all I do these days is get up... go to school... work, work, work... come home... do my homework... have my dinner... and then go to bed!  I never have time to play anymore!"

Me:  "Welcome to the real world, honey!"

Getting him to sit and do the homework was like pulling teeth.  We were literally spending 45 minutes a night doing a Maths worksheet, not because he found the work hard, but because each individual sum was accompanied by 5 minutes of moaning and groaning about the injustice of it all! I didn't even spend that much time on my homework when doing my A-levels at 18 (not that that is big, or clever)!


Anyway, Him Indoors & I decided that what he really needed was motivating.  Clearly, the satisfaction of a job well done was not cutting the mustard, and the eye-rolling look of disdain he gave me at the mention of a sticker reward chart said it all.  At the grand old age of 6, the Big One needed motivating by cold, hard cash!


I'll confess, part of me found this prospect a little distasteful (surely loving praise & encouragement is enough?), but then I began to consider the benefits of doing this.

1. He is learning about money at school and we parents have been asked to enforce the lessons at home by providing them with opportunities to use coins & notes of different values.  By working with an allowance he can practise his Maths skills for real!
2. Like most 6 year-olds, the Big One's concept of how much things cost is utterly fantastical so maybe it will help teach him the value of money.  And the value of hard work.  Hey, money doesn't grow on trees after all!
3. Also like a lot of kids his age, he asks for stuff.  A lot.  Now he can earn the means to buy stuff for himself rather than pestering me!
4. We can use it as an opportunity to teach him about saving and goal-setting.

But, how to implement this in a practical way?


We decided to assign a value to each of his 'responsibilities'.  So for example, one of his chores is to set the table for the evening meal.  Not a particularly arduous task, but pitching in never the less.  As a 5 minute task requiring little effort this responsibility is not a big earner... 20 cents a time!  However, tidying his bedroom at the weekend so that the floor can be vacuumed takes a bit more effort and is worth a dollar!  Obviously, the frequency at which these jobs must be performed varies too... putting dirty clothes in the laundry hamper is a daily chore, but dusting & polishing the upstairs bedrooms is a weekly job (I'm not a neat freak!).


So I decided to put my (limited) techy skills to work and produced a spreadsheet tracker for him to use.  In the spreadsheet, each responsibility/job is assigned a value and a frequency.  At bedtime each evening we review whether the tasks have been completed and add a 'Y' for yes or an 'N' for no.  The spreadsheet automatically calculates the total earned so far that week.  I put a little pie chart at the bottom of the chart so that he can see how much he can potentially earn in the week and how well he's doing towards that target!




To make the most of this activity, I also added a second sheet to the file where the Big One can track his saving and spending.  On a Sunday evening, we have the 'Weekly Reckoning'... he gets his pay out and adds it to the ever increasing hoard in his piggy bank.  I assumed the new riches would burn a hole in his pocket, but it would seem that it has had the reverse effect and he is displaying instinctive conservatism with his money!  Recently, he was offered the opportunity to use all his savings to buy two Lego sets he had lusted after for a while.  However, he decided to forgo this and only bought one... not wanting to clear out his piggy bank!  He is also setting ambitious goals and sticking to a savings plan... he wants the new Lego Ninjago Fire Temple set at a whopping $120.  He asked me to work out how many weeks he would have to save for, assuming he earned the full amount each week!




So has it worked?


This idea was originally inspired by the ongoing homework battle every evening after school.  I can honestly say it has resolved that battle entirely!  Homework is now done straight away, without complaint, and even he can see that it makes it quicker and less painful (we're down to a quick 10 minutes on the Maths worksheet now!).  The weekly bonus of $1 for having a 'good attitude' towards tasks has made a huge impact too!  Furthermore, the Big One has been really motivated in using the spreadsheet (he's all about the Screen Time at the moment!).  All in all, my reservations about using money to motivate my child have gone for good and I feel great about teaching him the value of hard work, saving and spending wisely and goal setting!


If you would like to use the Allowance Tracker I have created, I have uploaded the Excel template to dropbox.com.  Click here to go to file.  I would appreciate your comments and feedback!