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International health insurance plans - A global market opportunity"An article written for insurance agents and brokers around the world" Reproduced with permission from FORUM Magazine. by: David Tompkins Do you have any clients who live in Hong Kong? What about
that lucky client who is retiring to the Caribbean or who has a daughter leaving
Canada to study or work? How about that group benefits client who is sending a
key employee abroad for the next three years? Let’s face it, more and more
Canadians are moving and living out of the country. Falling ill in some far-off land is distressing enough
without worrying about who will pay your bills, which can run into the hundreds
of thousands of dollars. Some
medical facilities are reluctant to provide treatment without receiving an
ironclad promise to be paid, or a cash down-payment.
If, while living overseas, your clients happen to fall ill or be injured,
they will require medical travel insurance, and maybe even evacuation. International health insurance is an often-overlooked but
growing market. With increased travel, open borders and a global marketplace,
the need for health insurance that will cover a person worldwide can be vital.
You may not realize it, but you probably have a few personal
and group clients in need of international health insurance. Let’s face it,
except for extended health benefits such as drugs and paramedical services such
as physiotherapy, Canadians are used to having our health insurance handled by
the government; while our neighbours to the south are accustomed to selling
health insurance that covers the same ground as our provincial health plans.
Once you leave Canada you are not covered by your provincial health plan,
for the most part. If you become a
non-resident and leave Canada permanently you have to take charge of your health
insurance. When you think international health insurance, you can’t
just think of Canadians. Remember that a great number of Canadians hold more
than just one passport and may be living overseas either temporarily or
permanently. Also, you don’t have to limit yourself to selling health plans to
Canadians only. With the Internet,
you can find clients of almost every nationality. Expats (expatriates) are sometimes able to become part of
the local government health plan if they satisfy certain residency and
immigration requirements. However, such government plans, especially in second-
and third-world countries, are often inadequate and come complete with long
waiting lists, coverage of only the basic medical needs and a lack of
portability. And self-insuring is ill-advised as even the smallest illness or
injury can easily bankrupt a person. All
of this points to the need for expatriates to purchase adequate health and
emergency medical evacuation coverage that suits both their needs and their
budget. We also shouldn’t forget the market for the citizens of
less-developed countries. There is a large international health insurance market
for nationals living in the second- and especially third-world; where
government-operated plans are poorly run, or essentially non-existent. With the
collapse of many economies, especially in the Asian crisis, state-run health
systems have been suffering as tax revenues have dried up. Many people in these
areas also want to be able to obtain medical treatment outside of their country
– U.S. facilities attract thousands of patients from both the third- and the
developed-world. So what is international or “expat” health insurance?
Put simply, it is insurance to cover a person for their health expenses
while living abroad. There are two types of plans, “in-patient” and more
comprehensive “in-patient and outpatient” plans. In-patient expenses are
primarily incurred while in a hospital – including accommodation and
surgeon’s, anesthetist’s and physician’s charges.
Consultations in radiology, pathology, oncology and radiotherapy are also
included. The more enhanced plans also cover some outpatient charges like
specialist’s fees (including therapies like acupuncture, osteopathy,
physiotherapy, homeopathy), as well as primary consultations and primary care,
including a certain amount of prescribed drugs. Local road ambulance is usually
included in most basic plans while nursing at home and emergency dentistry are
generally options. For those who want more, a comprehensive plan would cover
the in-patient care as described above, along with a wide array of outpatient
care. Such expenses include: psychiatry, organ transplants, rehabilitation, home
nursing, childbirth, home delivery, general practitioner’s consultations, eye
& ear specialists, other specialists such as dietetic guidance,
vaccinations, lab tests and analysis, x-rays, Scans, EKGs, hearing aids,
physiotherapy, chiropractors, osteopathy and a certain amount of prescribed
drugs. If your client is accustomed
to using a government-sponsored plan such as Canada’s, they may want to
purchase such a comprehensive plan.
Almost all in-patient and combined in and outpatient plans
either include, or have the option of adding, emergency travel medical and
evacuation coverage. This coverage is highly recommended and the cost is usually
quite reasonable. We have all heard of people who have been injured or taken ill
overseas or in the U.S. and have quickly racked up $100,000 in medical bills. In
one such case, a Canadian client of mine was travelling in Mexico and suffered a
heart attack. He was rushed to the local medical facility to be stabilized and
then evacuated in a specially designed medical jet to the United States for
treatment. After a few weeks of successful treatment, the total cost was close
to a third of a million dollars Cdn. The insurance company paid it all, except
for a very small portion covered by the province. Almost all the evacuation options include a global service
network in association with a specialist evacuation partner, such as SOS and
Medex. The plans provide for immediate transportation from any location in the
world to the nearest centre of medical excellence for in-patient treatment of
emergency conditions and also generally cover the cost of return fare to your
country of residence after recovery. If
the expatriate ultimately dies, their physical remains can be transported home
for no charge. Almost all the plans in the marketplace have deductibles.
These range from $250 up to $10,000. Deductibles
obviously help lower the premium cost to the client, but a surprising number of
people prefer large deductibles – because they only want to be covered for
catastrophic claims. Some providers have plans that cover a client worldwide.
Other insurance companies have specific plans for people who do not wish to be
able to seek treatment in the U.S., with a lower premium resulting. In some
cases, the premium will be dependent on the geographic area that one resides in.
As one would expect, the United States and Canada are seen as high medical
expense zones, with premiums reflecting this reality. Still, if one is dealing
with an American client, he or she will almost certainly want to have the option
of receiving treatment in the U.S. All health plans have policy maximums. These generally range
from $800,000 US per policy year to $5 Million US per lifetime; though it is
quite unusual for a person to claim over $800,000 US in a one-year period.
All expatriate health plans have some restrictions and
exclusions. Some common exclusions are for pre-existing conditions known at time
of application. Some carriers will
offer some pre-existing coverage once the plan has been in force for a certain
number of years. A few insurance companies offer the chance to apply with
medical evidence and will either decline an application completely, exclude a
given illness or, in most cases, offer full pre-existing conditions coverage.
One should avoid health plans that don’t have any medical underwriting because
if a client becomes ill he or she will want to know what they are and are not
covered for.
Other general exclusions are cosmetic treatment, sexually
transmitted diseases, abuse of alcohol, self-inflicted injuries, the standard
war and riot clauses and naturally occurring conditions like menopause. Some
plans will only cover accidents in the first month, unless the client was
replacing another international health plan. Most plans do not cover maternity or childbirth. However,
there are a few health schemes that will cover a delivery, with a waiting period
of ten to twelve months after the policy is put in force. An elective caesarean
is usually covered up to a certain maximum. One should caution that a complicated pregnancy is very
expensive and unwise to self-insure. People
who are pregnant and covered by a health plan currently should not change
insurance carriers until the pregnancy is over. One should also check that the
child will be covered immediately after birth. Some plans only cover newborns
after ten to fifteen days; but others cover all children under nine for free,
with newborns covered from birth.
Another feature that clients often require is portability.
Many expatriates require health insurance that will stay with them regardless of
where they travel or move, as it is not uncommon for a person to move from one
home or work site to another. But only a few plans will continue to cover a
person who moves back to their home country, especially if that is the United
States. The obvious determinate of an expatriate's premium is age,
not gender. Most plans have premium bands of five years, with coverage available
up to age 100 and premiums for people over 65 are often priced on the basis of
the application. Another factor in the price can be whether the expatriate wants
worldwide coverage excluding or including the U.S. and Canada. Because of the
high price of health care in the United States, the price for expatriate
coverage including these two countries can as much as triple.
Despite the added cost, such a plan is recommended for offshore residents
who travel to the U.S. or Canada for extended periods.
Administration and service after the expatriate has taken
out a plan are crucial elements. Almost all the expatriate plans offered in the
marketplace are payable in US dollars, though some carriers do offer payment of
premiums and coverage in several different commonly used currencies. Most
offshore clients prefer to pay their premiums and be quoted in American dollars
as, more often than not, they are paid in US dollars as well. All plans offer
the choice to pay premiums by credit card, wire or cheque, and some even allow
the client to pay online. With Canada’s expanding role in the global marketplace,
the role of group health insurance market is a significant market that you may
be overlooking. This is topic for another article because it also encompasses
international life, long term disability and dental coverage for multinational
companies both in and outside of Canada. Expatriates
can obtain information on a variety of plans using the Internet.
Offshore clients have to realise that purchasing health coverage is a
vital part of their financial security. Neglecting such a vital safety net can
result in financial ruin. Bio David
G. Tompkins, BA, CLU, runs Expat Financial / Tompkins Financial Group Ltd. – a
local and international insurance agency. He
can be reached via http://www.expatfinancial.com or 800-232-9415 Global Travel Insurance.com - Buy travel insurance online. |
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