Monday, October 09, 2006

Medical and Dental Insurance

One aspect of US life that is a stark contrast to UK life is the reliance on insurance policies for medical and dental treatment.

When we lived in the UK, our only insurance policies were building & contents insurance and car insurance. We knew that in the US we would have to pay medical and dental insurance, but thought that the cost would be mostly offset by no longer having to pay National Insurance. This turned out to be a false assumption because one has to pay for one's own medical and dental insurance policies as well as paying for Medicare, Medicaid and Social Security.

Doctor Doctor Joke: Patient: Doctor, I feel funny; Doctor: Well, you look ridiculous to me
Medicare/Medicaid is the nearest thing that the US has to the NHS. People pay an amount each month out of their wages (I suppose, a bit like people in the UK pay National Insurance). Medicare is an insurance policy to provide medical care for those over 65 years old and some disabled people. Medicaid is a policy that provides treatment for those who are below the federally-defined poverty level.

As far as treatment is concerned, the UK media has countless nightmare stories about how people are treated on the NHS and I myself have had a few bad experiences. However, I can also say that I have seen a doctor on countless occasions (which here in the US would cost me a $15 excess for each visit) and have had a few operations/stays in hospital without having to part with a penny. If I moved house, I could just sign up at the nearest doctor's surgery.

In short, the NHS provides treatment to anyone regardless of socioeconomic status for free or near-free. Medical and dental provision (including prescribed medicines) for children is always free and most provisions for most adults is also free. Adults who earn above a certain wage have to pay for prescriptions (about £6 or so per prescription). As far as dental charges are concerned, we would visit the dentist twice a year and all I would pay for was £13 to have my teeth checked and polished. The option is available, for those who have the means, to pay for private medical provision, and private medicine does have its advantages. However, this is voluntary. One does not have to subscribe to private medicine just because one is well-off. One can still be treated by the NHS.

Doctor Joke: doctor says to patient: your problems stem from you being too rich, but I think I can help you
When we first arrived in the US, we were handed a 3" thick lever-arch folder that explained the various insurance policy options that were available to us. We were (and to a large extent still are) flummoxed. The folder was mostly gobbledygook -- containing phrases like "...subject to the deductible, covered at 80% of coinsurance of plan allowance...". Translated into our level of understanding, this says "...@!*#$ !@ #$% *$&:^?@!$# etc..." After hours of reading through this tome we were very little wiser, so we just picked a plan and hoped for the best.

It's now a year later and we still don't have a doctor. Our medical insurance only pays out if we have a doctor from their approved list. Upon phoning around the local surgeries in our area that were on the list, we discovered that:

  1. the list is out of date and many of the surgeries on the list do not take patients with our insurance policy and
  2. those doctors that do not fall under (a) have a full quota of patients and are not taking any more on.
My next recourse is to try further afield, and see if we can get a doctor in the Durham area. It's true that for $150 or so extra a month, we can choose any doctor, not just one from a pre-approved list. However, as we've been here a year and haven't needed a doctor, $1,800 a year extra seem like rather a lot to pay.

As far as dentistry is concerned, we had our first visit to a US dentist recently. There were no treatments other than prophylaxis (fissure sealant for the kids' molars (charged per-tooth), polishing, x-rays), yet our bill exceeded our insurance payout by about $750. I dread to think what it would cost

  1. without insurance
  2. if we had to have any actual treatments
In the UK, all children's treatments are free and I've already mentioned the cost of an adult's check-up and polish. Last time I had an X-ray I didn't have to pay, but even if these days there is a small fee, it'd be nothing when compared to the cost here.

When one is living in the UK one can see the NHS's problems. No matter how much public money is ploughed into it, for various reasons it is always hungry for more. It's not until one leaves the UK that one begins to appreciate just how great an ideology and institution the NHS is and how much, despite its problems, it's worth fighting to keep.


crystal said...

I have medicare because I have a visual impairment. A few months ago I needed an operation, and had to pay $500 - about a quarter of the bill - noyt easy to do on the limited icome. I wish we in the US had socialized medicine too.

Michael said...

Good insight into the two systems. I am very opinionated on this issue, so please forgive my bloviating on the subject. I have been arguing that the US should undertake a British style program for healthcare, but I think that there will still be losers in that event. The British systems seems to work best for those with common illnesses and chronic problems. In the US those things can make you go broke without decent insurance. However, if you have a life-threatening disease or need the newest prescription for your health problems, the US system is better. The number of doctors available and no waiting lists means that problems are tackled more quickly here. And the rest of the world is taking advantage of Americans paying the enormous costs to test and develop for all new pharmaceuticals on the market.

The British system seems to work best for the poor, though poor people can receive most treatments in America even if they can't pay - they'll just spend the rest of their lives owing it and most likely never paying. Even so, a Brit can take solace in knowing that a hospital visit won't break the bank.

I do suspect, however, that many healthy families such as yours actually spend more on healthcare in the UK. The tremendous tax burden in Britain (over 37% if I recall correctly) has a way of making services feel 'free' when they are simply paid for by the gov't. Those pounds have to come from somewhere. Of course, prices are higher in the US because less is subsidized AND because of the odd amalgam of insurances, doctors, hospitals, drug companies, etc all wanting a piece of the pie.

I know that the close proximity of everything in the UK allows the government to centralize certain procedures in certain areas so that specialists aren't required in every small city. If America ever does follow the British model, we will somehow have to tackle the enormpus size of the country and how to spread out specialists.

Needless to say, your post got me to thinking... thanks... and I still enjoy your thoughts immensely.

Viola said...

Michael -- This was an interesting comment. I was wondering, however, where the 37% figure for UK tax came from?

In the UK Pay As You Earn tax system, a married man earning £40,000 (as an example) would only pay about 21% (£8,400) a year. He would also pay about £2,500 a year National Insurance (a lot less than medical insurance + dental insurance + medicare/medicaid + social security).

As for Value Added Tax, the standard rate is 17.5%. Although this sounds like a lot more than the 8% we pay in NC, the rate for many items (eg children's car seats, domestic fuels, home renovations) is only 5% and the rate on many other items (eg food, books, medicines) is 0%.

Also bear in mind that in the UK there are no insurance excesses to pay and that there is no bill for the difference between the insurance payout and the cost of the treatment.

Michael said...

Hello Viola,
I should have been clearer about what I meant by 'tax burden'. I meant all the taxes combined - which would include council tax, VAT, tax on autos and petrol, payments for NHS, etc. The number was one I remembered from my time there. The 37% actually reflects the percentage of British GDP taken in taxes. The actual 'average' percentage of a Briton's paycheck taken by taxes is much higher - 48.5%. Here are 2 of many articles which relate all this:,,2087-2092829,00.html

Of course, this does not mean that everyone pays this rate... some pay higher and some pay lower. And I am not so concerned that it is good that Americans pay lower taxes. There is now way our current healthcare system can be sustained long term. I'd be happy to pay higher taxes for a more functional British-type system... which is, IMHO, better than most other European models and better than Canada's. Or how about an American system that just made sense. You are right... interpreting insurance plans is like reading hieroglyphics.

Viola said...

Thanks for the clarification. I think that this topic may require a whole extra blog post to do it justice.

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