Obama care – The US health insurance obligation

The American Health Care Reform, which came into effect in 2010, has succeeded in reducing the number of uninsured citizens. However, the insurance of temporary and permanent residents of the United States, who are not citizens of the United States, is not regulated by law.

This means that such residents can be left uncovered, and therefore, they must purchase one of the possible types of insurance, PPO and HMO.


Preview: Obama care

The Patient Protection and Affordable Care Act is a law enacted during President Barack Obama’s presidency and came into effect in March 2010.

The main purpose of the Patient Protection and Affordable Care Act is to adjust the regulation of health care services provided to U.S. citizens and residents.

Although during Trump’s presidency there was an attempt to repeal the reform, the latter did not receive support in the House of Representatives, and therefore, the reform remained. However, it should be noted that as of the end of 2017, the fine imposed on those who do not join the insurance coverage plan has been abolished.


The Purpose of the Law: U.S. Health Insurance

The aforementioned rationale the law is intended to achieve by two main actions. First, the law is intended to prevent a situation in which the insurance company refrains from providing insurance coverage when necessary, which would often happen, on various occasions.

The law is also intended to reduce the number of uninsured residents who are not covered by a medical safety policy. This goal seems to have been achieved, as the rate of uninsured residents is slowly declining. 

While the number of uninsured residents was 42 million people in 2012, by 2015 the number had declined substantially to merely 17 million people.

This decline is especially autosensing in light of the fact that this is the first time that the number of uninsured residents has fallen below 10%.


The Main Goals of the Reform

  • Providing the possibility of purchasing medical insurance at a price that is 60% of the market price.
  • Enabling purchasing medical insurance without the need for a health declaration.
  • Providing medical services without extensive waiting periods. These medical services include laboratory services, emergency services, pregnancy, and childbirth treatments, rehabilitation and hospitalization, prescription drugs, and so on.
  • Imposing an obligation to insure the staff if the employer employees 50 people or more.


The main advantages of such a medical reform

There are a few main arguments in favor of this medical reform. First of all the price, according to supporters of the reform, the result of an increase in the number of people insured along with the imposition of strict price regulation will help lower the costs of health care.

Another argument that predicts lower prices concerns prophylactic treatment. Prophylactic treatment will result in lowering the prices of medical treatment for U.S. residents since regular can lead to the discovery of medical problems at an early stage, thereby preventing later-stage ills, which are more expensive to treat.


The main disadvantages of the medical reform

A few allegations have also been made against the program. First, it is argued that the implementation of the reform may encounter many obstacles. The main basis for this argument is that many are insured with personalized insurance, and the reform requires repealing these insured citizens and re-register them.

Opponents also argue for two opposite effects that resulted from the reform. First, it was argued that many employers, who had previously paid for health insurance for their employees will cancel the insurance since the fine imposed on them for not insuring employees under the reform is cheaper than the actual insurance.

In addition, there are claims that the costs of medical treatments will increase due to the high demand for medical services.


The reform implications for Israelis in the U.S.

A segment of the population, which we must be addressed separately includes Israelis who have moved to the United States.

For the most part, these residents relocated to the United States for work purposes. This means that most of them are provided with health insurance from the company that employs them. However, as opposed to the situation in Israel, where citizens are covered by a state health system and given the option of purchasing supplementary insurance, in the United States things are different and there are several different options to choose from.

This importance of understanding the situation is reinforced by the fact that the law does not regulate the insurance required by temporary residents, which may leave them exposed.


Relocation Insurance – Expats

Currently, in the U.S. market, there are two kinds of insurance that are intended for expatriates, those that reside permanently or temporarily outside their country of origin. These insurance packages are intended to provide the temporary resident with an insurance policy when necessary:


HMO – Health maintenance organization

This insurance policy is similar to the health plans we know from Israel. The insured party, when purchasing the policy, chooses a single attending physician, who serves as an American equivalent of the Israeli family doctor. This doctor will be the only one who has the authority to refer for follow-up treatments.

In addition, there are several similarities between the HMO Insurance and the Israeli insurance including deductible prices, waiting times until receiving treatment and appointments and performing treatments only with medical entities with which the insurance company communicates.


PPO – Preferred Provider organization

This method is common among Expats residing throughout the United States, due to the flexibility it provides to the covered party in comparison to the HMO insurance method.

In addition, the policy enables, contrary to its above counterpart, to appeal to a wider framework of service providers in the medical world, thanks to the uniqueness of the method.


Important Point – Rogues

One last point that should be noted, concerns the price rate of the American healthcare market. This is one of the most expensive markets in the world, with no decreasing trends insight.

Therefore, citizens often purchase insurance from companies without an insurance permit, often leaving the insured without assistance when necessary. And so, the following indicators should be should raise a red flag when choosing an insurance company:

  • Significantly lower prices indicate a deal that might be unrealistic.
  • Lack of the word “insurance” in the registration forms.
  • Documents after signing – If the insurance company does not leave these in your hands after signing there might be a problematic reason.
  • You can check the list of insurance companies participating in the program on the State Office of the Insurance Commissioner website. 

The MasAmerica team assists Israeli citizens who must report to the U.S. tax authorities and aids them in all aspects of their U.S. taxation. Contact us today.

The aforesaid should not be regarded as legal advice. It is advisable to consult with the MasAmarika team before any action. The service is provided by a professional team, fluent in English and Hebrew, and includes attorneys and accountants with American licenses.

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