You are insured... But are you really protected?
Most U.S. residents have health insurance, often through their employer. However, being insured does not necessarily mean being protected against the financial consequences of an accident, a serious illness or an incapacity for work.
For French people living in the United States, this reality is often underestimated. Accustomed to a more generous social protection system, many discover too late the limits of American coverage.
So the question is not just "Do I have insurance?" but rather: "Are my assets and income really protected in the event of an unforeseen event?"
The myth of good American health coverage
According to the Commonwealth Fund, nearly one in four U.S. adults is considered underinsured, despite having active health coverage. This means that the deductibles, co-payments and expenses remaining at their expense are high enough to compromise their access to care or their financial stability.
Even more worrying:
- 57% of underinsured people say they have given up care for financial reasons;
- 44% say they are paying off a medical debt;
- 41% indicate that their health has worsened after postponing care for cost reasons.
In other words, even with health insurance, hospitalization or chronic illness can quickly become a major financial problem.
Ever higher deductibles
U.S. employers remain the primary source of health coverage. However, the costs borne by employees are steadily increasing.
According to the Kaiser Family Foundation (KFF):
- 87% of employees covered have an annual deductible;
- the average deductible is $1,787 per person;
- 32% of employees are covered by a plan with a deductible greater than $2,000.
Source : https://www.kff.org/health-costs/2024-employer-health-benefits-survey-october-2024/
In practice, this means that a significant part of the medical expenses remain at the patient's expense even before the insurance company starts to intervene.
The potential risk that is not always anticipated: disability
When it comes to financial protection, health insurance often gets a lot of attention. However, the real wealth risk is often elsewhere: the loss of income.
A serious illness, accident or disabling disorder can prevent you from working for several months or even years.
However:
- US public benefits (Social Security Disability Insurance) are difficult to obtain;
- processing times can be long;
- The amounts paid rarely cover the previous standard of living.
For a household whose income is mainly based on one or two working people, prolonged incapacity for work can quickly jeopardize:
- the repayment of the mortgage;
- retirement savings;
- children's education;
- long-term wealth objectives.
Why employer disability insurance may be insufficient
Many employees have disability insurance through their company.
However, these contracts generally have several limitations:
1. Partial income coverage
Most group plans replace between 50% and 60% of the gross salary.
For an executive earning $200,000 a year, this can represent a significant loss of income.
2. Benefit ceilings
Contracts often provide for a monthly ceiling that severely limits the compensation of high incomes.
3. Taxation is sometimes unfavourable
When the employer pays the premiums, the benefits received may be taxable.
The actual net disposable income may then be much lower than expected.
4. Employment-related coverage
Changing companies or losing your job can lead to the disappearance of the protection.
The financial consequences of incapacity for work
A prolonged work stoppage is not limited to a drop in income.
It may lead to:
- a decrease in the savings capacity;
- early withdrawals from investments;
- a reduction in pension contributions;
- increased reliance on debt;
- unfavourable trade-offs on assets.
For French-American families with assets in multiple countries, the impact can be even greater due to cross-border tax and regulatory constraints.
How can you help strengthen your protection?
A complete asset analysis should systematically include:
Health insurance
- actual level of deductible;
- annual expenditure ceiling;
- family coverage;
- protection in the event of a major hospitalization.
Disability Insurance
- income replacement rate;
- duration of the services;
- taxation of allowances;
- Continuation of coverage in the event of a professional change.
Precautionary savings
- available liquidity;
- Recommended safety horizon.
- coordination with long-term investments.
Protection of the family
- life insurance;
- coverage of the spouse;
- financing of studies;
- Succession strategy.
What French expats often forget
In France, many public mechanisms intervene automatically in the event of work stoppage or disability.
In the United States, the responsibility for this protection rests much more with the individual.
This cultural difference frequently leads expats to overestimate their actual level of coverage.
A strong wealth strategy is not just about investing effectively. It also aims to protect the income that makes it possible to build this wealth.
In conclusion
Your U.S. health insurance is a first line of defense, but it doesn't necessarily guarantee your financial security.
Between high deductibles, rising medical costs and the risk of incapacity for work, many households discover too late that their protection is insufficient.
Before seeking to optimise your investments, it is often relevant to check that your assets are able to withstand the event that is most likely to weaken them: a lasting interruption in income.
For Franco-American families, this analysis deserves to be carried out in a global approach integrating taxation, retirement, transmission and income protection.
Sources
- Commonwealth Fund – The State of Health Insurance Coverage in the U.S. (2024) :
- KFF Employer Health Benefits Survey 2024 :
Future written communications may be in English only. This material is provided for educational purposes only and should not be considered a recommendation or advice. Guardian and its subsidiaries do not provide advice regarding to health insurance. 8967228.1 Exp 6/28