Health insurance: use it or lose it
Wednesday November 8, 2006Barbara Cockburn
Some insurers give customers the choice of where they want to be treated, which has a huge influence on the premium. North America, Switzerland, Germany and the Middle East are much sought-after regions for the treatment of some conditions ? and expensive as a result. Hong Kong is the most expensive place to give birth because of its good reputation.
Medical inflation in North America, Europe, Africa, the Indian subcontinent and east Asia is always high, but customers can take out an excess (or deductible) to reduce premiums. An excess of £200 ($345) means that you pay the first £200 when claiming. ?An insurer will reward you for taking an element of self-insurance and sharing the risk,? says David Pryor, senior executive director of sales and marketing at Medicare International.
Paula Covey, Bupa International?s development director, says that, depending on the type of cover, a £100 excess could save the customer as much as 11%, and a £1,000 excess could save 35% of the premium.
Andrew Apps, managing director of Goodhealth Worldwide, says excesses are more common in Europe, where it is typical to buy them ?per medical condition?. A customer might take out a £100 excess and then pay that amount towards the cost for treatment on an injured knee. But if, later in the policy year, he or she were to suffer a shoulder injury requiring treatment, another £100 excess would apply against any claim.
In the US, a deductible is more commonly bought against any number of medical conditions that may affect the customer. Pryor suggests that this is a better deal than an each-and-every-loss excess.
Most policies allow expatriates to choose where they are treated. The state system in France requires patients to pay the first 30%; to keep costs down, the customer would need to buy insurance to cover that expenditure, known as top-up insurance.
Apps says: ?A good state system will lessen the need for outpatient cover. In-patient cover is more of an essential because you don?t know when or if you need an operation such as a hysterectomy or heart bypass surgery, which will mean you?ll need to occupy a bed in hospital overnight.?
Most international health insurers have offices in various regions that can negotiate deals with local hospitals to get the best value for money. In-patient cover is an important element, but an excess is not generally available, because, says Pryor, too many claims are made for in-patient treatment (70% of claims costs at his last count).
Another policy option is dental cover, but you should consider the benefits of insuring only against emergency cover and perhaps paying for routine work when it is needed.
Finally, if you have a policy nearing its annual renewal date, decide whether you want to drop any cover that is no longer relevant. If you can?t use it, lose it wherever possible.