All U.S. citizens living in the United States are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. This category includes nonresident aliens who meet certain presence requirements and elect to be treated as resident aliens. For more information see Pub. 519. More: Shared Responsibility from the IRS (See Question 11)
For many Americans, especially those who struggle to make ends meet, living paycheck to paycheck, health insurance may seem like an unnecessary expense. The opposite is true. While there are many smart ways to go about saving money, going without health insurance isn’t one of them. Forgoing coverage isn’t smart, nor will it save you money in the long run. The bottom line? Being uninsured is financially risky.
The United States health care system relies heavily on private health insurance, which is the primary source of coverage for most Americans. As of 2012 about 61% of Americans had private health insurance according to the Centers for Disease Control and Prevention. The Agency for Healthcare Research and Quality (AHRQ) found that in 2011, private insurance was billed for 12.2 million U.S. inpatient hospital stays and incurred approximately $112.5 billion in aggregate inpatient hospital costs (29% of the total national aggregate costs). Public programs provide the primary source of coverage for most senior citizens and for low-income children and families who meet certain eligibility requirements. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals; and Medicaid, funded jointly by the federal government and states but administered at the state level, which covers certain very low income children and their families. Together, Medicare and Medicaid accounted for approximately 63 percent of the national inpatient hospital costs in 2011. SCHIP is a federal-state partnership that serves certain children and families who do not qualify for Medicaid but who cannot afford private coverage. Other public programs include military health benefits provided through TRICARE and the Veterans Health Administration and benefits provided through the Indian Health Service. Some states have additional programs for low-income individuals.
Consumers wishing to deposit pre-tax funds in an HSA must be enrolled in a high-deductible insurance plan (HDHP) with a number of restrictions on benefit design; in 2007, qualifying plans must have a minimum deductible of US$1,050. Currently, the minimum deductible has risen to $1.200 for individuals and $2,400 for families. HSAs enable healthier individuals to pay less for insurance and deposit money for their own future health care, dental and vision expenses.
Employers and employees may have some choice in the details of plans, including health savings accounts, deductible, and coinsurance. As of 2015, a trend has emerged for employers to offer high-deductible plans, called consumer-driven healthcare plans which place more costs on employees; some employers will offer multiple plans to their employees.
In recent years, because of health care cost increases, employees are paying an increased percentage of the cost of their health insurance premiums, usually through a payroll deduction. Some plans cover the employee who must pay the cost of insuring family members. Additionally, almost every plan has a co-payment (co-pay) responsibility in which the employee pays a nominal fee to cover a portion of the health care service provided, usually ranging from $10-40.00.
Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay a $500 deductible per year, before any of their health care is covered by the health insurer. It may take several doctor's visits or prescription refills before the insured person reaches the deductible and the insurance company starts to pay for care. Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions against your deductible.
The public option was featured in three bills considered by the United States House of Representatives in 2009: the proposed Affordable Health Care for America Act (H.R. 3962), which was passed by the House in 2009, its predecessor, the proposed America's Affordable Health Choices Act (H.R. 3200), and a third bill, the Public Option Act, also referred to as the "Medicare You Can Buy Into Act", (H.R. 4789). In the first two bills, the public option took the form of a Qualified Health Benefit Plan competing with similar private insurance plans in an internet-based exchange or marketplace, enabling citizens and small businesses to purchase health insurance meeting a minimum federal standard. The Public Option Act, in contrast, would have allowed all citizens and permanent residents to buy into a public option by participating in the public Medicare program. Individuals covered by other employer plans or by state insurance plans such as Medicare would have not been eligible to obtain coverage from the exchange. The federal government's health insurance plan would have been financed entirely by premiums without subsidy from the Federal government, although some plans called for government seed money to get the programs started.
The Australian government announced in May 2008 that it proposes to increase the thresholds, to $100,000 for singles and $150,000 for families. These changes require legislative approval. A bill to change the law has been introduced but was not passed by the Senate. An amended version was passed on 16 October 2008. There have been criticisms that the changes will cause many people to drop their private health insurance, causing a further burden on the public hospital system, and a rise in premiums for those who stay with the private system. Other commentators believe the effect will be minimal.
Starting October 1, new financial assistance called the Health Insurance Premium Tax Credit will be available to help make insurance premiums affordable for those who need coverage. The website Healthcare.gov will provide a single location where you find out whether you are eligible for the premium tax credit and shop for and compare the different health insurance plans available to you in your state. Check out Healthcare.gov if you would like to learn more about the new options available October 1 and what you need to do to get ready. Meanwhile, if you need coverage immediately and would like to search for and compare plans available now, go to finder.healthcare.gov to start your search.
Accident insurance was first offered in the United States by the Franklin Health Assurance Company of Massachusetts. This firm, founded in 1850, offered insurance against injuries arising from railroad and steamboat accidents. Sixty organizations were offering accident insurance in the U.S. by 1866, but the industry consolidated rapidly soon thereafter. While there were earlier experiments, the origins of sickness coverage in the U.S. effectively date from 1890. The first employer-sponsored group disability policy was issued in 1911.
In addition to medical expense insurance, "health insurance" may also refer to insurance covering disability or long-term nursing or custodial care needs. Different health insurance provides different levels of financial protection and the scope of coverage can vary widely, with more than 40% of insured individuals reporting that their plans do not adequately meet their needs as of 2007.