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Understanding Health Insurance

There is no universal healthcare in the U.S., so most people in this country buy health insurance.

Health insurance protects you from owing a lot of money to doctors or hospitals if you get sick or hurt and need medical care. Health insurance can also help you pay for regular check-ups, laboratory tests, vaccines, and prescription medication. 

Do I need health insurance?

Yes, you need health insurance. Here’s why: 

  1. Healthcare in the U.S. is very expensive. According to a U.S. government website, if you break your leg, you could end up with a bill for $7,500. If you need to stay in the hospital for three days, it would probably cost about $30,000. If you have health insurance, your costs will be much, much less. 

  1. It’s the law. If you have a J-1 visa, the U.S. Department of State requires that you (and all your family members with J-2 visas) have health insurance that meets specific requirements. If you are a resident alien you must have a plan that meets “minimum essential coverage” requirements. The state of Massachusetts also requires health insurance for legal residents.  

Most of MIT's health insurance plans meet all of these legal requirements.* If you want to buy an MIT-sponsored health plan, you must buy it within 30 days of your arrival, and you must continue making regular payments to keep your insurance coverage for as long as you stay.  

*MIT's High Deductible Health Plan for employees does not meet J-1 exchange visitor visa requirements.

How does health insurance work?

Health insurance covers the healthcare services you need. It covers check-ups, mental health services, necessary lab tests, prescription drugs, and visits to the doctor or emergency room if you get sick or hurt. If you need surgery or need to stay in the hospital overnight, that is also covered. 

But health insurance doesn’t pay for everything. When we say that an insurance plan “covers” a particular healthcare service, that means that it will pay for at least part of the cost. Some healthcare services are “covered in full.” That means that you will pay nothing extra for that service. But you will have to pay part of the cost for other healthcare services.  

How much will I pay for health insurance?

To buy and keep your health insurance, you will need to make regular payments — premiums — to a health insurance company. You might have to make a premium payment every month, for example. As long as you remain eligible and keep paying your premiums, the health insurance company agrees to pay for part of your medical bills. 

But the premium is just part of the price. Most of the time, you will also have to pay part of the cost when you get medical care — this is your “out-of-pocket cost. ” An insurance plan may have a deductible, coinsurance, copayments (or copays), and an annual out-of-pocket limit. Together with your premiums, these four things will determine your out-of-pocket costs: 

  • Deductible: A deductible is the total amount of your own money that you must pay for certain covered services before the insurance company will pay for any of your medical expenses.  

For example, if your plan’s annual deductible is $2,000, you must pay for all of your medical expenses until you have spent $2,000. After that, the insurance company will pay some or all of the cost. If you break your leg and get a bill for $7,500, you will pay $2,000, and the insurance company will pay some or all of the remaining $5,500. If you get sick or hurt again that year, the insurance company will pay the entire cost (except for any coinsurance; see below). 

  • Coinsurance: After you reach your deductible amount, you might still need to pay part of your medical expenses. Coinsurance is the percentage you must pay; the insurance company will pay the rest. 
    For example, if your insurance plan includes 20 percent coinsurance, and you get a medical bill for $500 after reaching your annual deductible amount, you will pay 20 percent of the bill, or $100, and your insurance company will pay 80 percent, or $400. 

  • Copayment: You might have copayments — or “copays” — for some medical services. A copay is a fixed amount you will pay for a specific healthcare service or for a prescription. You might have different copays for different medical services or for different types of prescription medications. 
    For example, if you have an appointment at a doctor’s office, your copay might be $25; but if you go the emergency room, your copay might be $200. When you get a generic prescription medication (one that does not have a brand name), your copay might be $15; but if you get a brand-name medication, your copay might be $50. 

  • Annual out-of-pocket limit. This is the most you will be required to pay for covered medical expenses in any one year, not including your premium.  

For example, if your plan has an annual out-of-pocket limit of $4,000, after you have spent $4,000 to pay medical bills for covered services during one year — your deductible, plus coinsurance and copays — the insurance company will pay 100 percent of the cost of covered services for the rest of the year. 

 

As you can see, many things are included in the cost of health insurance. If you want to know what an insurance plan will really cost, you need to look at all of these things—the plan’s premium, deductible, coinsurance amount, copays, and annual out-of-pocket limit.  

What about my family?

If you buy MIT health insurance for yourself, you can also buy coverage for your family members. When you buy an MIT health insurance plan for your spouse or partner, they can choose a primary care provider (PCP) at MIT Health and get care right here on campus. If you buy MIT health insurance for your children, they can get their care in Primary Care. 

If your family members arrive in this country after you, you can buy insurance for them when they arrive. You must sign them up for insurance within 30 days of their arrival. 

Can I use my insurance at MIT Health?

It depends. 

  • If you are an MIT student, you can get care at MIT Health, even if you do not buy the MIT Student Health Plan (SHIP). 

  • If you are not an MIT student, you will need to have an MIT-sponsored health plan to use most services at MIT Health. That’s because MIT Health only accepts MIT insurance.  

If you don’t have an MIT health plan, you still can use MIT Health’s Urgent Care Service, but you might have to pay the whole bill yourself. If you are a non-student covered by MIT SHIP, you will have no out-of-pocket cost for an Urgent Care visit. If you have an MIT-sponsored employee health insurance plan, you will pay just $10. Without MIT insurance, a visit for strep throat would cost more than $200; for a sprained ankle, you would spend almost $400. 

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