Is healthcare free?
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UPDATED: Mar 19, 2020
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- Health care is never free
- Subsidized insurance plans on the Marketplace can sometimes be free to patients if they qualify
- Medicaid offers health coverage to those in financial need
- Medicare offers some free health care options to Americans age 65 and older
The truth is, health care is never free.
Procedures, scans, professional time, and auxiliary services all cost money, whether or not the patient pays a copay at the point of service. Different models of health care offer different solutions to paying for this care.
Read on to discover more about the different ways to pay for health care and forms of health care that are “free” to the patient in the United States.
Compare health insurance options today to find the coverage that’s right for you.
How Health Care Systems Are Funded
There are two major ways health care services are funded, and either fall eventually to the consumer.
Health care in most of the developed world is free to the patient at the point of service. Patients can see the doctor, have tests performed and go into surgery without paying anything at the time of the visit or admission. How is this possible?
Countries that provide universal health coverage to all citizens are able to do so because by collecting taxes.
These taxes are collected by the government, who then becomes the sole payer of health care services in the country. This gives the government tremendous power to negotiate lower prices for the following:
- durable medical goods
Health care in the United States is unique among developed countries. It is funded by citizens at the point of service and via premium and deductible payments to insurance companies.
The insurance companies turn those premiums and deductibles around to pay for the medical goods and services required by its subscribers. That is one of the reasons it is so important for sicker and healthier people to share insurance pools.
Without the deductibles and premiums of the healthy people who rarely use care, there would not be enough money in the insurance pool to pay for the care of sicker subscribers.
Experts often cite the outrageous cost of health care in the United States as one of the reasons the current system is in desperate need of reform.
In fact, the United States pays 17 percent of its Gross Domestic Product (GDP) on health care, compared our neighbor, Canada, who pays 10.7 percent. Why is healthcare so much more expensive in the U.S. than in other countries?
One of the reasons is that the U.S. has many purchasers of health care. Individuals or groups of individuals (as through an employer) purchase drugs, goods, and services without the enormous purchasing power a single-payer government has.
Think about it: a pharmaceutical company’s bottom line could handle the loss of a single customer, even hundreds of customers. It is the potential loss of millions of customers that scares companies into lowering their prices.
Universal health care, whereby taxes are used to pay for medical goods and services for all citizens of the country, is far less expensive for the patient than the premiums, deductibles, and copays in the American system because of the aforementioned savings.
Some in the United States can enjoy a dramatically reduced or free-to-them health care policy using one of the government programs available to U.S. citizens in financial or medical need.
Read on to learn more about those programs in the U.S., who qualifies for them and how they can be provided to the patient at no or very low cost.
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“Free” Health Care in the United States
There are some instances in the United States where the government absorbs copayments or subsidizes premiums so that health care is free to the patient. Whether a citizen qualifies for such a plan is typically determined by need or by age.
Let’s look at these situations in detail to better understand how they are free for the consumer and whether you or someone you know can qualify for these benefits.
– Federal and State Health Care Exchanges
State and federal Marketplace exchanges offer consumers the option to fill out a questionnaire and discover whether they qualify for a subsidized plan.
Individuals or households who make 100 to 400 percent of the federal poverty line qualify for subsidized coverage. These subsidies offset the costs of premiums, deductibles, and copays.
Often, coverage for individuals who qualify for a subsidy is completely free. Plus, the health care exchanges make it simple to compare different plans and their components to determine which offers the best value to you and to your family.
States and the federal government cooperate to provide Medicaid benefits to United States Citizens. In short, states use federal money to organize and run their own versions of Medicaid at the state level.
For individuals whose income falls below the poverty line, Medicaid offers health benefits that can be life-saving. Since the passage of the Affordable Care Act (Obamacare), some states have also opted to expand Medicaid.
In those states, individuals who earn up to 133 percent of the poverty line are eligible to receive Medicaid benefits. States are able to pay for this expansion using block grants awarded by the federal government to states who elect to expand Medicaid.
Since Medicaid is a collaboration between states and the federal government, each state’s Medicaid system will operate differently. In most states, benefits are completely free to people who qualify.
In other states, a small copay is required at the point of service with Medicaid benefits covering the rest of the cost of care.
Medicare is a lot like European versions of health care in that it is a single-payer government run health care system.
Medicare is reserved for Americans aged 65 and older, as well as individuals with end-stage renal disease, and ALS. Medicare has four parts, A, B, C, and D.
- Medicare Part A is funded by payroll taxes, the taxes taken our of your paycheck at the end of each pay period. It generally covers inpatient hospital and long-term care benefits.
- Medicare Part B offers outpatient and well services. Unlike Part A, Medicare Part B requires and is funded by the payment of premiums, typically under $150 per month.
- Medicare Part C, also known as Medicare Advantage, is another version of Medicare Plan B, but is highly variable since it is run by private insurance companies. These plans often require premiums, deductibles and copayments like normal insurance plans.
- Medicare Part D is a drug savings plan that helps to mitigate the costs of prescription drugs.
While health care is never free, there are several options available in the United States to mitigate the costs of health care for those who are struggling.
Contact an insurance agent, log onto Healthcare.gov, or call insurance companies operating in your area to learn more about whether you qualify for free or reduced insurance premiums, copayments, and deductibles this year.
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