Should ill winds blow...June 2005

Susan Norris was an expatriate in Bali when she fell down an embankment and broke her ankle and several ribs. With her local clinic equipped only to deal with minor injuries, it was decided she be transferred to Singapore. However, with no insurance cover the local air evacuation company refused to take her without a guarantee of payment. This alone cost £26,000 and was paid thanks to a friend who stepped in with a credit card.

This tale comes from Paul Andrews, business development manager at health insurance provider William Russell, who met the people involved. He offers it as a caution against being under insured when it comes to global healthcare.

According to surveys, some 55 to 60 per cent of expatriates abroad hold no form of private health insurance whatsoever. With worldwide medical costs often staggeringly high, and health risks differing in your host country to those at home, this can be a hazardous omission to make when planning your global finances.

There are plenty of specialists available for the expatriate market, and the extent of cover offered and costs charged can vary significantly from policy to policy. Most policies ideally provide cover for acute (short term or curable) conditions, fees for consultants and surgeons, specialist treatments, home nursing, drugs, dressings, tests, some outpatient treatment and hospital charges including nursing, accommodation and theatre fees.

However, there are often omissions in standard policies – GP fees, for instance, or pregnancy costs, dental treatment. sight tests or HIV-related illnesses. What most expats agree on is the need for flexibility when it comes to individual requirements, and the option to add on benefits. Not surprisingly, global health insurers are vying for that business.

“With increased competition and information on the internet, expatriates now have more choice and many do a great deal of research or ask probing, intelligent questions about their cover,” says Donna Elliot, managing director at Expacare Insurance Services. “If your cover and premiums are not competitive, you simply do not get the business. A pro-active company will use this feedback to improve their benefits and deliver what expatriates want.”

Peter Rousseau, business development director at InterGlobal agrees: “The market has become hyper-competitive; more providers are entering the arena with more products for expatriates to choose from. As a result expatriates are, quite rightly, becoming increasingly selective, particular and demanding.”

He gives an example: many expats these days are demanding that their policies offer ‘Wellness’ cover, such as medical check-ups, mammograms, cervical smears or prostate cancer tests. This is something few providers are prepared to offer despite the fact that early diagnosis of medical conditions can save lives.

Rousseau says most companies will only provide cover when an insured person actually becomes ill, but the irony is that early diagnosis can save those very companies higher treatment costs in the end. Indeed, US research shows that every US$1 spent on preventative treatment saves $64 in actual claims costs. Both InterGlobal and William Russell offer this type of cover as part of their overall menus of benefits.

So, how do you find the perfect policy to suit your requirements? Most providers allow large groups or companies to tailor packages to suit their employees’ needs, taking away or changing benefits as they choose. However, few allow individual expats that luxury: what they offer instead are three or four packages whose premiums get higher as refunds get bigger and benefits become more diverse (see table).

Take the Goodhealth plans, for instance. For a 39 year old man with no excess to pay the Major Medical plan covers basic in- and outpatient care and has monthly premiums of £42.91; the Foundation plan offers the same with higher levels of cover and adds on complementary treatments and hormone replacement therapy all costing a monthly £66.15; the Lifestyle plan adds chronic conditions and costs £79.27; and the Lifestyle Plus option includes routine dental treatment, pregnancy and childbirth for £134.60. Optional extras (for a fee, of course) include private hospital rooms.

William Russell offers three health plans: Select Care, Premier Care and Premier Plus. All the plans include inpatient treatment, emergency evacuation, emergency dental treatment, local ambulance charges and 24-hour emergency medical assistance. Routine dental care and maternity care are added as the premiums increase.

Many providers offer a huge range of benefits in their standard cover and it is tempting to opt for a plan that seems to include most illnesses and eventualities. However, you might end up paying higher premiums for, say, pregnancy, dentistry or complementary medicine and, obviously, one policyholder’s benefit is another’s non-essential extra.

For just this reason, à la carte healthcare has a slightly different approach. Instead of having a series of packages where benefits are added on as premiums increase, it has just two basic plans with extras offered only as add-on options.

“We offer menu-based plans where the customer can choose the benefits they need, rather than a package giving them benefits they might not require. For example, a single man does not need pregnancy cover,” says Sarah Jewell, managing director at à la carte healthcare.

William Russell, however, believes the packaged approach is less confusing. “We have chosen to remain with a fixed set of plans rather than a modular approach as it’s the best way to keep the product straight-forward when the market can be complicated,” says Andrews. “This way the client knows exactly what is covered and what isn’t.”

Whichever form of cover you prefer, it is worth shopping around for the policy that suits your needs most closely. Also bear in mind that the price of treatment varies depending on the country in which you are resident. Providers tend to break their policies into geographical regions such as Europe, North America and the rest of the world.

If you’re still not sure whether to splash out, Peter Rousseau offers a realistic incentive: “I have many stories of how international private medical insurance has saved the lives of expatriates who would most definitely have died without it. Remember, this insurance is like a parachute – if you need it and you haven't got it you may never need it again!”