There’s really nothing sexy about expat health insurance, however it’s a subject matter that most expatriates have to explore. The only trouble is, as soon as you start Googling terms such as ‘medical and health insurance abroad,’ all you’re faced with are adverts from the leading insurers, and organic links to their sales websites.
This makes it incredibly difficult for any expat to get to grips with the guidelines and the basics that they need to have in mind before they pick an appropriate policy. In an attempt to put this imbalance right, we’ve created something of an ‘ultimate guide’ to health insurance for expats…
Today we’re covering why inflation in this insurance bracket is so high, which expats need coverage, how extensive medical insurance cover needs to be for the individual, and how to determine what you need on a case-by-case, country-by-country basis. Finally, we’re including links to the main insurers to save you some Googling time!
A Word About Inflation in the Health Insurance Arena
Thanks to the historically low interest rates currently available on savings, we’re all much more aware of the effects of inflation nowadays. It erodes the value of the currency in our pocket, and affects our quality of life. However, inflation runs at different rates in different areas of the economy.
Inflation in the healthcare industry is exceptionally high – as discussed in detail in an article in Relocate magazine. The article explains that as advances in technology are made, so the research has to be paid for. As we live longer and survive previously terminal ailments, so our care has to be funded.
As costs in the healthcare industry therefore increase uncapped year-on-year, so the burden of the cost is passed on to us, the end-user of the services and treatments available. Taxes go up to pay for state funded medical care, and health insurance premiums rise every single year to cover the increased charges that insurers have to pay for their insured clients.
At the beginning of this year, when we wrote our report into beating high health insurance inflation, we estimated that it would hit about 10% in 2011. This would of course trigger premium increases accordingly, and force all affected expats to revaluate their cover and potentially readjust other areas of their spending to continue to afford cover.
Therefore it’s time to look at health insurance cover for expats and see who actually needs it…after all, if this is an expense you just don’t need to afford, why are you considering paying for it?
Do All Expats Need Health Insurance?
Not necessarily, no…
1) If you’re an expat moving to live in a country with a state funded health service, you’re going to be legitimately working and paying taxes in that nation and you will therefore be entitled to ‘free’ care, you don’t necessarily have to have expat health insurance.
2) If you’re a Briton retiring abroad to a nation within the EU with which the UK has a reciprocal healthcare agreement you may not need to self-fund your medical care with an expat health insurance policy.
3) Others who may choose to go uninsured abroad include those residing in nations where the cost of medical care is ‘affordable’ – relative to what the individual in question earns.
However…there are risks for all of those included above. For example: -
1) The UK has a state funded health service, the NHS. And expats moving to live and work in Britain may think they can therefore get any and all treatment for free. However, ask any Brit about the state of the NHS and they’ll tell you it’s pretty dire because of massive underfunding. Expats may therefore choose to have gap insurance or even a completely private plan.
2) Once again, it’s a case of all state funded health services suffering from underfunding. Therefore even those who are eligible for free care abroad may find they are better off with an insurance policy that provides gap cover at the very least.
3) Those who operate on a pay-as-you-go basis for healthcare usually hope deep down that they never get ‘very’ ill. It’s one thing affording to pay for basic doctor’s appointments for flu or a tummy bug, it’s quite something else if you have to self-fund cancer care or rehabilitation following a car accident for example.
In some nations it’s compulsory to have health insurance if you want to be cared for – think Germany and America to name but two. In other nations it’s advisable to have a private policy if you want to afford the best cover. It’s often easier for expats to assess what they will need once they’ve relocated and understand what others do, what’s required of them, and what services are available on a free or paid for basis.
You can reach out and ask other expats via forums or social networking resources, so that you know in advance of your move how others are insured in your new nation.
International Policies or Local Medical Insurance Only
Having identified that most but certainly not all expats need medical insurance, it’s time to lift the lid off the biggest health insurance myth…
You don’t necessarily need an international health insurance policy!
International policies tend to split coverage up by geographic area – for example, you can have coverage in Europe but not North America, or if you want to add on North America then your premium will double!
But most expats – by far the vast majority – only need local insurance. Local to the nation in which they live…
Yet most expats believe they need to buy an international health insurance plan…
It’s a great big rip off potentially wasting expats hundreds of pounds every single year. Hundreds of pounds that could be far better spent on enjoying life abroad!
An international plan is perhaps suitable for expats who travel extensively and frequently or who live in more than one nation on a regular basis. E.g., those who winter and summer in different countries for example.
A local health insurance plan is suited to expats who have made a permanent home abroad in a fixed country. Such expats may then buy a travel insurance policy if they go on holiday to another country – but this is likely to be far less expensive that plumping for an all singing, all dancing international medical insurance policy.
The big insurers don’t want you to know any of this however!
What’s more, it can be very difficult for expats to know who the local health insurance providers are in a country until they have already moved there, learned the local language and understood how the local insurance marketplace works. Therefore, many expats panic, get an expensive international policy in place and then run with the premium increases annually.
Stop!
You don’t have to do this! Spend time finding out about the local insurers in your new nation. Put Google to good use, use other expats’ expertise, reach out and ask. Don’t buy an international plan if you don’t have to. Don’t waste your money. If you’ve been head hunted by a company abroad or you’ve found work overseas to relocate for, ask your employer for advice.
Otherwise, as before, use the forums and social sites to ask questions and get informed.
Repatriation, Evacuation and Other Expensive Add Ons
For those who have identified that they need an international policy, it’s time to look at what additional areas of care and cover may need to be paid for. For example, those who live in a nation with very poor basic medical infrastructure and who would therefore need to move country for comprehensive care, evacuation or repatriation coverage may be necessary.
Such add ons are nothing if not expensive – and yet for some they will literally make the difference between life and death.
In assessing what you may need, you need to look at what level of care and service is available to you locally in your new nation. It may be absolutely obvious that you will need additional insurance to cover your transportation in-nation or internationally if treatment centres are rudimentary or sparsely located.
There’s quite a good article about the basics of emergency medical evacuation and repatriation insurance cover on expatfinder.com. It talks about how it works and what’s actually covered. It may help you to assess whether you really do need it.
No Claims Discounts and Renewal Costs
One of the benefits of choosing an international policy over a local one is that most international insurers do offer you a no claims discount annually. However, this can be negated by their renewal costs!
What’s more, if you’re an older expat you may find that as soon as you pass 50 or 55, your annual renewal fees for your expat health insurance policy becomes your biggest monthly spend.
You need to look at whether your insurer caps increases annually or with age. And ask whether they offer no claims discounts up front.
Country-to-Country and Case-by-Case
As you may have realised by now, there’s a lot you need to look for when researching health insurance. And the right choice for the individual is very much a personal choice based on unique factors…
In terms of helping you determine whether you need to be insured, whether you need a local or an international policy, and what add-ons (if any) you need, the following list of questions and pointers will hopefully guide you: -
- Is there a state funded health service in your new nation?
- Are you eligible for it (e.g., will you be working locally and paying taxes, or is there a reciprocal agreement enabling you to have access to cover?)
- Does it fall short, i.e., will it require you to have gap insurance or even a private policy if you want to be assured of better care or if you want access to all services?
- If there is no state system, is having medical insurance in your new nation compulsory?
- If so, are there nationally recommended medical insurance companies to choose from?
- Can your employer help you get insurance in place, do they have an employee scheme?
- If there is no state scheme and yet insurance is voluntary, it’s time to look at local services and likely costs
- Where costs are high and/or where services are poor, it may be a case of you needing a comprehensive policy, and even one with evacuation/repatriation cover
- Are there local insurers who offer sufficient health care coverage?
- If not, you need to look at which international insurers can give you the cover you need
- When shopping for a policy mention previous conditions, ensure coverage is broad enough (e.g., to cover even the most serious illness or accident), ask about family discounts, no claims discounts and the amount by which premiums can potentially increase by
Expat Health Insurance Guidelines and Conclusions
If you want free quotes or you want to explore what levels of international expat health insurance are available, some of the leading names in the expatriate medical insurance marketplace include: -
Finally it just remains to say that for the sake of your health you should never go underinsured – but you owe it to your financial health to ensure you’re not paying over the odds for a policy or add ons that you don’t need.
