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As of the end of the 20th century the number of expatriates worldwide has increased exponentially. With the increase in globally mobile individuals has come a whole spate of new products and services designed for expatriates, including international health insurance policies. The huge variety of plans available, combined with recent reports that many expatriates neglect to purchase adequate health insurance, mean that it’s imperative for an expat to know why having the proper international health insurance plan is vital.
1. Depending on where you live, healthcare can be expensive
If you ever fall sick or get injured while outside your home country, having international health insurance can save you from paying for expensive medical fees yourself. Even a basic inpatient only coverage policy from an international medical insurance provider offers you the freedom to choose where to receive your medical treatment, a major advantage of these policies. Since you’re insured, you don’t have to settle for a sub-par hospital or doctor simply because it is cheaper; instead, you can opt to be treated using the best medical care available without having to fork out a small fortune to pay for it. As some surgeries are extremely expensive, even holding a simple inpatient policy can be vital, as it ensures that you will not have to pay out of pocket for your coverage. In countries like the USA and Hong Kong, the two most expensive places to receive healthcare, this saves you a huge amount of money. Take for example a common procedure like a hip replacement. In countries like Singapore and Thailand you’d spend about US$12,000 on the operation. In the USA on the other hand, without any health insurance you’d pay a whopping US$43,000 for the exact same procedure.
2. International evacuation and repatriation
Being covered for international evacuation and repatriation can save you from paying US$10,000 or more if a serious accident requiring medical evacuation occurs. IER coverage provides you with two main benefits. First, if you are injured or seriously ill without access to treatment nearby, your insurer will transport you to the nearest medical facility. In some cases, depending on the injury, illness or location, this could mean that you will be transported to a neighboring nation. The second benefit, medical repatriation, is essentially the same, the only difference being that your insurer gives you the ability, if necessary, to be transported back to your home country for treatment. If you suffer a fatal accident, being covered for international repatriation also ensures the transportation of your mortal remains back to your home country. In spite of its benefits, many expatriates don’t think they’ll ever need IER. However, when you consider that an increasing number of expats are being relocated to remote and potentially dangerous locations overseas like oil fields in the Gulf, not being covered is a fine line to walk.
3. Other alternatives fall short
When moving abroad, to avoid the cost of taking out IHI, expats usually do one of three things.
1) Either they take out a travel insurance policy, 2) Rely on the country’s national health care system,
3) Or, take out insurance with a local insurer.
All three of these options have downsides and probably shouldn’t be considered as viable alternatives. Travel insurance isn’t meant for day to day healthcare, but is ideal for emergencies and vacations. Therefore, taking out travel insurance to cover you while you’re living in a different country is a risky move that could leave you exposed in any non-emergency situation. If you end up requiring frequent medical care, and only have travel insurance, you may not be covered and will have to pay for it yourself. In the past, expats had the luxury of benefiting from other countries national healthcare systems. Nowadays, foreign governments are become increasingly strict when it comes to allowing expatriates ‘free’ access to state health care. A couple of governments, including France’s, have taken a “pay up or leave” stance, making it a law that expats must have health insurance. Even if expats are allowed access, many countries’ public health care systems, like the UK’s NHS, suffer from queues and inefficient service that could leave you with long waiting periods before you receive treatment. It is therefore not wise to rely on receiving state healthcare overseas as your form of coverage. An alternative that may seem the most attractive to expats is taking out health insurance from a local insurer. While initially it is cheaper, it does have its downsides and can be more expensive in the long run. When dealing with a local insurance policy, as you submit more claims, your premium will increase. This is because local insurers take note of your claims history and adjust your premium as your claims increase. The first time you take out a policy you have an empty claims profile so your premium is cheap. Say for example, after buying a local insurance policy you develop a medical condition, you use your insurance to pay for the treatment. Due to this claim, and the increased risk you pose to the insurer, your premium will increase. On the other hand, international health insurers use community ratings to calculate premiums. This means that your claims history and health status is a non factor in calculating the amount you have to pay and the only changes in price are due to aging and fluctuations in the economy. Additionally, as expats are known for always being on the move, a local plan also inhibits the flexibility you have. Taking out local insurance means that when you move to a new country you’re not covered. Having a IHI plan, in most cases, covers you wherever you move. Local insurance won’t provide you with international evacuation and repatriation cover (discussed above) and in certain countries like Japan and China, can result in vast language barriers between yourself, your doctor and the insurer. This is by no means saying that international health insurance is the perfect solution to healthcare overseas. It is costly, and if you don’t read what exactly your policy is covering, can result in you not being covered for something you thought you were. However, when one considers the alternatives available and some of the benefits you can get from an IHI plan, as of right now, it’s the best option for any expatriate.
Author bio: Isaac Abraham is a global health insurance analyst for http://www.global-health-insurance.com/. Global Health Insurance is one of the world’s leading brokers advising clients on international health insurance policy purchases.