Americans and visitors alike often wonder why health costs are so high in the USA, a nation where per capita health spending is almost twice the average seen in other wealthy countries. The answer to this question is complex.
The American treatment cost gap
The raw cost of treatment is higher in the USA than in many countries, so this influences the cost of insurance. There are several reasons for this cost gap:
Pharmaceutical drugs, for instance, cost nearly four times more in the USA than other similar countries.
American doctors and nurses enjoy some of the world’s best pay – the average registered nurse in California earns $113,240 – so this also drives up cost.
The American system also tends to favour more frequent interventions and complicated procedures, which comes with a price tag.
Due to the sizeable treatment cost differences, many international insurers – including William Russell – do not cover treatments that take place on American soil as part of our standard policies.
However, if you’re an American citizen working overseas, then it’s good to know some of our international health insurance policies provide short-term cover for visits of up to 45 or 90 days. Find out more about our USA-45 and USA-90 international health policies.
Estimates suggest 15 to 30% of healthcare spending in the USA is for administrative services, such as billing costs – a large part of the difference between healthcare costs in the USA in Canada can be explained by administration spending. These might be higher due to the complex structure of healthcare in the USA, where federal, state and local governments, employers, insurers and citizens all have a share to pay.
Why do US health insurance costs keep going up?
The cost of US health insurance has almost doubled in a decade, as the table shows: