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UK vs U.S. Healthcare: What Ex-pats (and others) Need to Know

UK vs U.S. Healthcare: What Ex-pats (and others) Need to Know

August 10, 2020

Entering a Vastly Different Healthcare System Requires Forethought and Planning

We had our own room in Cedars Sinai hospital – coming from the UK it seemed like a 5-star hotel. My newborn son peered up at me. His mother lay exhausted after a 20-hour labor and it suddenly occurred to me that our hospital stay was about to extend past 24 hours. But would the insurance cover it? In a panic, I tried to contact the insurance company. This was my first wake up call to the difference between the British and US healthcare systems and how, as an ex-pat from the UK, I might be in for a rude awakening.

My next was a year later after a $15,000 surgery to fix a deviated septum. I could no longer breathe through my nose. I had been referred to the specialist by my primary doctor but afterward, the insurance company refused to pay. What?! It turned out I needed two referrals for this particular surgery. That small print was hidden in the coverage brochure the size of the bible. The insurance company also insisted they knew that it was for cosmetic reasons. (This is Hollywood after all.) Thank goodness I had refused the doctor’s generous but insulting offer of a free nose job.

A final wake up call, was when my 8-year-old daughter had food poisoning in Las Vegas but was diagnosed for appendicitis and had her appendix removed instead. “Oh yes,” a nurse confided to us. “When that doctor is on duty our appendicitis rate goes way up.” As another Doctor friend laconically explained to me, “What did you expect? If you go to McDonald’s, they are going to sell you a hamburger.”

The UK medical system is never going to “sell you a hamburger.” The financial dynamics push in the opposite direction and since you are not paying, the opposite may happen and you won’t be given quite the care and attention required.

These are just some of the differences between the UK and U.S. healthcare systems, so British ex-pats moving to the United States may benefit from the primer below.

Where You’re Coming From: The British National Healthcare System

In the U.K, the health system is free to all British citizens at their point of access, with every citizen contributing through taxation. You’re probably used to a percentage of each paycheck going toward this government healthcare system and, while you may not appreciate the amount you’re required to chip in, you probably do appreciate the fact that no one is ever turned away for treatment because healthcare is viewed as a right. From a technical standpoint, your healthcare isn’t free, but it is much more affordable than in many other countries across the globe.

In addition, medical visits are blessedly free of bureaucracy. You show up at the doctor’s clinic and you get treated. No painstakingly figuring out your coverage. No forms to be filled or bills to agonize over and no co-pays to exasperate you. Indeed, sometimes at a UK clinic, there is no staff to be navigated: just a cheerful doctor who comes out into the waiting room to greet you.

Where You’re Going: The United States Healthcare System

Under the Affordable Care Act, commonly called Obamacare, health insurance coverage in the US is now mandatory for all individuals, and, unfortunately, it can be quite costly. Even for Americans, it can be a shock to the system – and the wallet. What’s more, capitalism in the U.S. medical industry means that doctors and hospitals often set their own fixed prices, meaning you’ll find variable costs depending on where you’re treated. This is also the reason that health insurance plans differ so dramatically in terms of both price and coverage. There is no transparency. And it can be difficult, if not impossible, to anticipate or get quoted all costs accurately before-hand.

There are four ways in which you pay for your healthcare coverage. Firstly, you and possibly your employer pay monthly insurance premiums. Secondly, depending on the coverage you choose, you may have to pay a percentage of the bill, (make that 100% if the procedure is not covered.) Thirdly, you may have to pay all costs until you have met your deductible at which point your insurance kicks in. (Like any insurance, the higher the deductible the lower the monthly premium.) Finally, you may have to pay a co-pay, such as $10-$50 for a visit or a prescription. Make sure you are clear on all these costs before visiting the doctor.

There are also two primary ways of getting coverage. The most affordable is the comprehensive HMO managed care solution such as Kaiser Permanente. This is the closest thing to the UK National Health system in terms of simplicity and coverage. Alternatively, if you like choosing your own doctors, as many Americans do, you would go with a PPO (Preferred Provider Option.) It will be more complex to navigate, more costly but more flexible.

An option for the healthy is to choose a High Deductible Health Plan. As the name suggests, these plans have a high deductible which you pay out of pocket before the insurance kicks in, but these plans have much lower monthly premiums than traditional plans. In addition, they come with a great financial planning advantage, a Health Savings Account (HAS), where you can save tax-free dollars to meet your medical bills. To repeat, these are great for the healthy.

For British Expats Making the Move to the U.S

Importantly, as a British ex-pat, there will also be a waiting period when you first arrive in the U.S. when you will not be permitted to enroll in domestic healthcare. During this time, it is critical that you obtain travel medical insurance to bridge the gap. Without it, you leave yourself vulnerable to having to pay extremely expensive out-of-pocket costs in the event you become ill or injured before you’re eligible for U.S. health insurance.

Once you’re eligible for U.S. health coverage, either through your employer or through the federal government’s private health plan marketplace, take care in selecting your insurance plan and your primary care physician. There will be many options, many of which simply won’t serve your needs. The U.S. Department of Health and Human Services offers a resource here on how to go about choosing the right insurance plan for your unique circumstances.

Moving to another country certainly presents challenges. However, taking the time to plan for your healthcare needs as a British ex-pat in the U.S. will help to alleviate much of the anxiety you’re feeling while protecting your health and your finances at the same time. The good news is that once you qualify and pay for US health care, the standard of care can be excellent.

What of our five-star stay at Cedars Sinai after the birth of our son? It turned out the hospital had automatically requested coverage to extend our stay. But we did receive a surprise $1,400 bill from the anesthetist – it turned out his services weren’t covered.

Wellacre Global Wealth Advisors, Financial Planning Consultants, Santa Monica, CA