Health insurance in the US

The US has one of the most advanced healthcare systems in the world, but its insurance-based model operates differently from those in many other countries. Whether you already live in the US or are planning to move there, understanding how the system works is essential to ensure you’re covered in case of illness or injury.

Below, we’ll cover everything you need to know about getting health insurance in the US, including:

The healthcare system and health insurance in the US

The US has a mixed healthcare system that combines private and public provision. Most healthcare services are delivered by private providers, while publicly funded care is available to specific groups of people.

It’s primarily an insurance-based model, with most residents covered through private health insurance – either provided by employers or purchased individually.

In addition, there are government-subsidized programs for people who meet certain eligibility criteria, including:

• Medicaid – for individuals and families with low incomes
• Medicare – for residents aged 65 and older, and some younger people with disabilities

According to US government data (2023):

• Just over 65% of the population have private health insurance in the US
• About 36% are covered by public health insurance programs
• Just under 8% remain uninsured

Healthcare in the US is administered at both federal and state levels. The US Department of Health and Human Services oversees the national system, while individual states regulate insurance markets under the McCarran-Ferguson Act. The Food and Drug Administration (FDA) is responsible for regulating medicines and medical devices.

Who needs health insurance in the US?

Unlike many countries, the US does not have a national law requiring everyone to have health insurance. The Affordable Care Act (ACA) originally included a federal “individual mandate” that required most residents to have health coverage or pay a penalty. However, this federal penalty was eliminated, starting in 2019.

Today, several states and jurisdictions have their own health insurance mandates that require residents to maintain coverage or face a state-level tax penalty. As of 2025, these include:

• California
• Massachusetts
• New Jersey
• Rhode Island
• Vermont (law on the books, but no current penalty for noncompliance)
• Washington D.C.

Although health insurance is not mandatory for most Americans, having coverage is strongly recommended. Medical care in the US is among the most expensive in the world, and health insurance helps protect you from potentially devastating out-of-pocket costs.

What happens if I am not covered by health insurance in the US?

If you don’t have adequate health insurance, you’re generally responsible for paying the full cost of any medical services you receive. This can be extremely expensive – the US consistently ranks as having the highest healthcare costs globally.

In states or jurisdictions that require coverage, residents without an approved health plan usually face a penalty when filing their state tax return, unless they qualify for an exemption (for example, due to financial hardship or short coverage gaps)

It’s also important to note that while hospitals are legally required to provide emergency care regardless of insurance status, many non-emergency providers may refuse treatment or require full payment upfront if you are uninsured.

Public health insurance in the US

Who is covered by public health insurance?

The US does not have a universal public health insurance system. Instead, it offers several targeted government programs that provide coverage to specific groups of people. The two main federal programs are:

• Medicaid – provides health coverage to individuals and families with low incomes, as well as to certain pregnant women, children, and people with disabilities. Eligibility and income limits vary by state and depend on factors such as household size and financial circumstances. For example, income limits differ in New York, California, and Florida.
• Medicare – primarily covers residents aged 65 and older, as well as some younger people with disabilities or specific medical conditions (such as end-stage renal disease or ALS)

Other public programs include:

• Children’s Health Insurance Program (CHIP) – offers coverage for children (and sometimes pregnant women) in families whose incomes are too high to qualify for Medicaid but who cannot afford private insurance.
• Veterans health programs such as those administered by the Department of Veterans Affairs (VA) or CHAMPVA, which provide healthcare benefits to eligible military veterans and their dependents.

Although the US does not provide a nationwide public health insurance system, some residents may qualify for government subsidies – such as cost sharing or premium tax credits – to help reduce the cost of private healthcare plans purchased through the ACA Health Insurance Marketplace.

Public health insurance schemes in the US are generally only available to citizens and lawful long-term residents. Short-term visitors, temporary visa holders, and new arrivals typically need to purchase private health insurance to cover medical costs.

What is covered by public health insurance?

Medicaid

Medicaid covers a broad range of healthcare services. The exact benefits vary by state, but coverage typically includes:

• Primary care (general practitioners and pediatric services)
• Hospital care (inpatient and outpatient)
• Mental health services
• Maternity care
• Sexual health and family planning services
• Dental care (coverage levels vary)
• Preventative screenings and vaccinations
• Diagnostic tests (e.g., x-rays and lab work)
• Vision care
• Prescription medications
• Durable medical equipment

Many of these services are free, though some may require a small copayment. Check your state’s Medicaid website for details on eligibility and covered benefits.

Medicare

Medicare offers coverage for many similar services, though it generally requires premiums, deductibles, and copayments. The exact costs depend on the plan type. Standard Medicare (Parts A and B) usually does not cover routine dental care, vision care, and most prescription drugs.

Medicare consists of four parts:

• Part A – covers inpatient hospital care, skilled nursing facility care, some home health services, and hospice care.
• Part B – covers outpatient care, doctor visits, preventative services, and medical equipment.
• Part C (Medicare Advantage) – offered by private insurers, combines parts A and B and may include additional benefits such as dental and vision care.
• Part D covers prescription medications.

How to apply for public health insurance

Medicaid

You can apply for Medicaid at any time. First, check whether you meet your state’s eligibility requirements. If you qualify, you can apply through one of the following:

• The Medicaid website for the state where you live
• The Health Insurance Marketplace (healthcare.gov), if you have or create an account

When applying, your state Medicaid agency may ask you to provide:

• Your full name and date of birth
• Your social security number
• Proof of income (such as recent pay stubs or tax returns)
• Proof of US citizenship or lawful residence
• Details of monthly expenses (e.g., rent, utilities)
• Information about any other state benefits you receive
• Details of any existing health insurance coverage

Each state may have slightly different requirements, so check your state’s Medicaid website for specific instructions.

Medicare

If you are a US citizen or lawful resident who is already receiving social security or retirement benefits, you will automatically be enrolled for Medicare Part A and B when you turn 65.

If you are not yet receiving social security benefits when you reach 65, you will need to apply for Medicare manually. You can do this:

• Online through the Social Security Administration (SSA) website
• By visiting or contacting your local SSA website

If you continue to work past the age of 65 and delay applying for social security benefits, you can still apply for Medicare separately online when you’re ready.

How to choose a public health insurance plan or provider

Both Medicaid and Medicare allow you to choose from different plans and healthcare providers.

For Medicaid, available plans and provider networks vary by state. Start by contacting your state Medicaid agency or visiting its website to compare available plans and participating providers. See examples for New York, California, and Florida.

For Medicare, use the federal government website to explore coverage options and compare providers. First, decide whether you want:

• Original Medicare (Parts A and B), possibly with Part D for prescription drugs or a Medigap policy for supplemental private coverage, or
• Medicare Advantage (Part C), which offers bundled coverage through private insurers and may include extra benefits.

When choosing a plan, consider factors such as:

• Covered services – ensure all your healthcare needs are included
• Flexibility – determine whether you can customize or change your plan easily
• Quality – look at plan ratings and patient satisfaction scores
• Accessibility – check provider locations and typical waiting times

Private health insurance in the US

Because public health coverage in the US is limited to certain groups, most residents rely on private health insurance for their medical needs. According to 2023 government data, about 65% of Americans have private health insurance. This figure includes some people who also receive public coverage – for example, retirees who add private or supplemental insurance to their Medicare plan.

Who should get private health insurance in the US?

Anyone living in the US can buy private health insurance, provided they meet the insurer’s eligibility requirements. Most working adults get coverage through their employer. It is also possible to buy individual or family coverage directly from a licensed insurance company or through the Health Insurance Marketplace established under the Affordable Care Act (ACA).

Private health insurance may be particularly beneficial for:

• Working-age adults who do not qualify for Medicaid or other public programs
• Temporary residents, such as international students, exchange visitors, or foreign workers, who are not eligible for public benefits
• Retirees seeking additional or more comprehensive coverage to supplement Medicare
• People with chronic or complex health conditions who want greater flexibility or access to a wider range of specialists and facilities
• Individuals seeking coverage for services not typically included in public plans, such as alternative or complementary therapies, dental, or vision care

The advantages of getting private health insurance coverage in the US

Private health insurance in the US offers several benefits, including:

• Protection from higher medical costs: Without insurance, patients must pay the full price for private healthcare services, which can be extremely expensive.
• Access to a wider range of services: Many private plans include benefits not typically covered by some public programs – for example, dental, vision, and hearing care.
• More choice of healthcare providers: Public programs often limit patients to specific networks or providers, while private insurance plans usually offer greater flexibility to choose any doctor or specialist who accepts the plan.
• Supplemental coverage for Medicare users: People with Medicare can purchase private “Medigap” or Medicare Advantage plans to help cover copayments, deductibles, and other out-of-pocket costs.
• Shorter waiting times: Appointments and procedures in the private sector are often available sooner than in public facilities.
• Access to premium care and amenities: Higher-tier private plans may include treatment at top hospitals, access to leading specialists, and enhanced comfort options like private hospital rooms.

The main drawback of private health insurance is the higher cost. Premiums can be expensive, especially for comprehensive plans. Prices are usually risk-based, meaning older individuals or those with pre-existing health conditions often pay more.

How does private health insurance work?

How private health insurance works in the US depends on the type of coverage you have. Broadly, there are two types of private health insurance:

• Employer-based health insurance
• Direct-purchase (individual) health insurance

Employer-based private health insurance

Many US employers offer private health insurance as part of their employee benefits package. This is usually group insurance purchased by the employer, who typically pays a portion – and sometimes all – of the monthly premium. Employees usually contribute the rest through payroll deductions.

Depending on the plan, employees may have some flexibility in choosing their coverage level or preferred healthcare providers. Some can even opt out of the employer’s plan if they have coverage elsewhere (for example, through a spouse).

When you receive care under an employer-sponsored plan, your insurer usually pays the healthcare provider directly, and you pay only your share of the costs — such as copayments, coinsurance, or deductibles.

Most private-sector workers get coverage this way. Public-sector employees are often covered under specific government-run programs — for example, the Federal Employees Health Benefits (FEHB) Program for federal workers. Military personnel and their families are typically insured through TRICARE.

Direct-purchase (Individual) health insurance

People who don’t have access to employer-based coverage — or who prefer to choose their own plan — can buy private health insurance directly for themselves and their families. This involves researching insurers, comparing plans, and applying on your own.

Individual plans are usually more expensive, since you pay the full premium yourself. You’ll also need to pay an annual deductible, which is the amount you pay out of pocket before your insurance starts covering costs. Insurers typically pay providers directly for covered services, though some plans require you to pay upfront and then file for reimbursement.

Thanks to the Affordable Care Act (ACA) – often called “Obamacare” – it’s now easier to buy affordable private health insurance through the Health Insurance Marketplace. The Marketplace allows US citizens and lawful residents to compare plans and check if they qualify for federal subsidies that lower monthly premiums or out-of-pocket costs.

Each state either runs its own Marketplace or uses the federal one at HealthCare.gov. For example:

• New York
• California
• Florida

All Marketplace plans cover 10 essential health benefits as a minimum, including hospital care, maternity care, mental health services, and prescription drugs.

You can apply for Marketplace coverage during the Open Enrollment Period, which typically runs from November 1 to January 15 each year. Certain life events — like losing other coverage, getting married, or having a baby — may qualify you for a Special Enrollment Period outside those dates.

How to choose a health insurance provider

When comparing private health insurance providers in the US, it’s worth taking the time to shop around. Key factors to consider include:

• Flexibility: Can you customize the policy to fit your specific needs, ensuring you’re not missing essential coverage or paying for benefits you don’t need?
• Deductible options: Are you able to adjust your deductible to lower or raise your monthly premium?
• Claims process: Does the insurer handle payments directly with healthcare providers, or do you need to pay upfront and then request reimbursement? If it’s the latter, how long does reimbursement typically take?
• Customer feedback: How does the company rate on independent review platforms or customer satisfaction surveys?
• Special offers and incentives: Does the plan include any extra perks, such as discounts on wellness programs, gym memberships, or partner products?
• Overseas coverage: Are you covered for medical care when travelling abroad, or will you need to purchase additional travel insurance?
• Company ethics and sustainability: How does the insurer perform on corporate responsibility and sustainability rankings, such as CSRHub or Corporate Knights?

Private health insurance companies in the US

According to the National Association of Insurance Commissioners (NAIC), there are over 1,000 health insurance providers operating in the US. Some of the largest companies include:

• Blue Cross Blue Shield
• Centene Corporation
• Elevance Health
• Kaiser Permanente
• UnitedHealth Group

Health insurance companies in the US are regulated primarily at state level by each state’s insurance department. You can find information or search for licensed providers through the NAIC website.

International health insurance for expats in the US

If you’re moving to the US and researching health coverage options, it might be worth considering an international health insurance plan. These plans typically provide coverage both in the US and abroad, which can be especially valuable if you travel frequently or return to your home country often.

Major companies offering international health insurance for expats in the US include:

• Allianz Care
• Cigna Global

If you need to make overseas payments, you can use Wise to make international money transfers or hold funds in Wise multi-currency account.

Wise uses the mid-market exchange rate with transparent fees, and its multi-currency account lets you manage 40+ currencies in one place.

For more information on how Wise works in your country, please visit the Wise.com website and select your country for full information about the products available.

Health insurance costs and reimbursements

The cost of health insurance in the US depends on several factors, including:

• Insurance type (e.g., private, employer-based, ACA Marketplace, Medicaid)
• Plan type (e.g., basic or comprehensive coverage)
• Personal factors (e.g., age, health, occupation)
• Income level
• Location (premiums vary widely by state)

According to the US Bureau of Labor Statistics (2023), employees with work health insurance pay about 20-39% of their total premium, while employers cover the rest. Annual employee contributions range from:

• $528 to $3,301 for individual coverage
• $2,655 to $14,130 for family coverage

Direct purchase (non-employer) plans range from about $100 to over $1,000 a month. If you buy coverage through the ACA Marketplace, you can compare plans and see if you qualify for subsidies or tax credits. These are usually available to households earning 100-400% of the federal poverty level. The table below shows sample average monthly premiums by state (2025):

Location	Average lowest-cost bronze premium	Average lowest-cost silver premium	Average lowest-cost gold premium
Maryland (cheapest)	$265	$362	$355
Vermont (most expensive)	$808	$1,275	$1,139
California	$400	$469	$526
Florida	$394	$513	$520
New York	$605	$766	$1,018

Standard Medicare (Parts A and B) premiums start at $185 a month. Additional coverage (e.g., Part D or Medicare Advantage) costs vary by plan.

Reimbursements and Oout-of-pocket costs

Reimbursement rates depend on your plan, type of service, and provider. Some plans (such as certain Medicare, Medicaid, or high-tier private policies) may cover 100% of costs. Otherwise, you’ll share costs through:

• Copayments: fixed dollar amounts per service
• Coinsurance: a percentage of the total cost (typically 10-30%, or about 20% for Medicare)

Both apply after you meet your deductible, which is the amount you pay out-of-pocket each year before your insurance coverage begins.

On ACA Marketplace plans, coinsurance typically ranges from 10% (platinum tier) to 40% (bronze tier).

FAQs

What does ACA stand for?

ACA stands for the Affordable Care Act, a landmark health reform law signed in 2010 under President Barack Obama. Most major provisions took effect in 2014. The Act’s primary goals were to expand health insurance coverage, make private insurance more affordable, and introduce stronger consumer protections and regulations for insurers.

What does it mean if you have marketplace insurance?

If you have marketplace insurance in the US, it means you purchased a health plan through the Health Insurance Marketplace established by the ACA. This marketplace is open to most US citizens and lawful residents who do not have access to affordable employer-sponsored insurance and do not qualify for public programs such as Medicaid or Medicare. Marketplace plans must meet ACA standards, and many enrollees qualify for income-based subsidies or tax credits that lower monthly premiums and out-of-pocket costs.

Useful resources

• usa.gov/health-insurance – federal government information on health insurance
• HealthCare.gov – US health insurance marketplace where you can shop for affordable private health insurance
• Medicaid – national public health insurance program for citizens and lawful long-term residents on low incomes
• Medicare – federal health insurance program for those aged 65 and over
• US Department of Health and Human Services – federal government department responsible for US healthcare