How Much Does Insurance Cost in  USA?

The Institute of Insurance is considered one of the most ancient and developed in the world. However, in Russia both insurers and insurers themselves are skeptical about insurance. In the United States, on the other hand, insurance has received tremendous development and has penetrated into all spheres of life of American citizens.

Sergey Katargin, CEO of Independent Insurance Consultants, spoke about the reasons for such a difference and the peculiarities of insurance in Russia and the USA.

Insurance in the USA

American insurance is considered almost a standard in the insurance services market in many respects. Its main feature is that it is not subject to a nationwide regulatory system, but is controlled separately in each state. Such a structure has proven its effectiveness throughout history (about 150 years).

The private insurance sector in the United States replaces or complements government social programs, which is why it is so heavily supported by the government. Ensuring comfortable conditions for the existence of the market is put at the head of the priorities of the state.

Insurance in the USA is not just a way to protect against possible risks. Active advertising campaigns of insurance agencies at one time supplemented the image of the American dream, which was forced at the end of the last century through the mass media. The high standard of living also contributed to the growth in demand for all insurance services in the country.

Features of American insurance

The US insurance market consists of two types: life insurance and other types of insurance (property, liability). Property and liability insurance in the United States occupies almost half of the global market - 46%. In total, there are 4,000 life insurance companies and 4,500 property and liability insurance companies operating in the country.

• High competition in the market is limited by a strict criterion for market access - the presence of a certain level of capital.
• External competition - from banks - is limited by the state with the help of control over the conduct of related operations by banks.

The regulation of the insurance industry at the state level is expressed not only by providing only solvent companies on the market, but also by the availability of insurance services for all categories of citizens, regardless of nationality, place of residence and other factors specific to US policy.

In general, state regulation of insurance is carried out at two levels: regulation of the solvency of insurers and market regulation. If the regulation of solvency is based on the control of capital and investment, then the regulation of the market is mainly reflected in the pricing policy of insurance companies. Supervisory control over the activities of insurers is carried out by the National Association of Insurance Commissioners, which has existed in the United States since 1871.

A feature of American insurance is the presence of insurance brokers and agents in the insurance process - not a single transaction goes through directly. In addition, insurance is the only industry that is not subject to antitrust law.

The leading insurance companies in the US are State Farm Insurance and American International Group.

How to get insurance in the USA?

1. Insurance in the United States is the responsibility of all citizens. Legal immigrants are also required to secure Social Security or Social Security (SS).
2. SS is a general insurance system designed for working citizens and immigrants, it does not cover medical expenses. Each employee or entrepreneur regularly pays interest to the SS fund, which provides material assistance to the most vulnerable groups of the population: the poor, pensioners, orphans.
3. Social Security Number (SSN) is a unique 10-digit number that is assigned to everyone who legally resides and works in the United States. The analogue of SSN is the Russian TIN. It is advisable to get an SSN immediately after arriving in America, especially since you can do it for free at the Social Security Administration. Without an SSN, you won't be able to get a job, rent a house, or get medical care.

Health insurance

Health insurance in America is paid separately and is also mandatory under the Affordable Care Act, also called Obamacare. A US resident without health insurance will be required to pay a fine of 2.5% of their annual earnings.

Only the unemployed, the disabled, people over 65 or the poor can get free health insurance. In all other cases, insurance is paid either by the person himself, or in whole or in part by the employer.

There are three types of health insurance (actually there are more, but three make up the bulk of the market):

• HMO ("online") - allows you to visit only those doctors and specialists who have entered into an agreement with the HMO. According to it, the general practitioner issues referrals to other doctors.
• PPO - it can be treated both "on the network" and "out of the network". Under such insurance, the choice of doctors increases, you do not need to receive a referral from a therapist, but it also costs more.
• EPO - differs from HMO only in that it does not have to receive a referral from a general practitioner, but it will only have to be treated by doctors "on the network".

Separate insurance will be required for dental and ophthalmic treatments.

The process of obtaining medical care in America, at first glance, seems complicated, but it is easy to figure it out if you know its main stages:

1. Some services are provided by insurance for free, they are prescribed in the insurance plan.
2. For all others, you must pay Co-pay (surcharge), the amount of which is also specified in the contract
3. When the amount of funds paid for medical services reaches a certain threshold - Deductible, only Co-Insurance will need to be paid for medical care - a small percentage of the total cost of the service.
4. After the limit of the insured funds spent has reached the Out-of-pocket maximum level, he stops paying for medical services - all expenses are covered by the insurance company.
5. Every year Deductible and Out-of-pocket is reset to zero.