The cost of medical cover

Tuesday November 21, 2006

Iain Yule

If you are in an area of the world where medical care is basic or even non-existent, and where disease is common, then you are taking serious risks with your health. This is especially true if you do not have insurance, which will pay for you to be evacuated to a hospital with western standards of care.

And even if you are in an area where standards of healthcare are good, are you eligible for free local medical treatment? Many expatriates take out private medical insurance (PMI) policies that work across international borders, to ensure they receive care when they suffer injury or illness.

New set of rules

PMI premiums vary a lot and depend on how comprehensive the policy is. It is becoming important for Britons to have the correct international healthcare cover if they want to arrange treatment ? even in the UK. New rules introduced in the past two years mean that expats returning home are denied access to National Health Service treatment in anything other than an emergency.

New laws that are meant to hamper ?health tourism? ? non-Britons using NHS services ? could also apply to overseas Britons returning home for treatment. Patients will have to show they that spend at least six months a year in the UK to get free care.

Technically, British globetrotters who have non-resident status can't expect free treatment in the UK, but few checks have been made and those with an existing NHS reference number were unlikely to be turned away. The new rules are, however, set to be applied thoroughly. Make sure you have sufficient international (including UK) PMI cover in place.

Elsewhere in the world

While Britain is just starting to get tough on private cover for expats, some countries already command their foreigners to have policies of this type. In the Middle East, for example, medical cover is mandatory.

In Australia, private medical insurance take-up is officially encouraged through a premium rebate system. In France, patients have to pay 20% of the cost of any treatment they receive from the state and so ?top-up? insurance is popular to cover this. In Spain, long hospital waiting lists ? partly the result of so many elderly northern Europeans retiring to the sun ? are encouraging a greater take-up of PMI.

Elsewhere in the world, cost becomes a major factor. The United States, Canada and the Caribbean are often excluded from international PMI policies because of the relative expense of treatment in those locations. If you are going to be travelling or working in these areas your policy premiums will face heavy loading.

The cost of premiums also depends on the level and breadth of cover and any add-ons you choose on top of a basic plan. Basic plans may not cover emergency evacuation, maternity, outpatient, drug or dental costs, or sports injuries ? some or all of which you may consider essential.

In love and war

The cost of comprehensive PMI plans can vary from around £500 a year to over £13,000, depending on your age, the size of your family, the countries you travel to and just how inclusive you want the plan to be. Almost all plans exclude pre-existing conditions ? which must be declared ? and alcohol, drug or HIV-related illnesses, as well as injuries resulting from war or terrorism.

You will not, under most policies, be covered against the consequences of a terrorist attack. Most medical insurers have a full war-risk exclusion, bar one: Medicare International, which provides ?passive war? cover, including terrorist attack.

This type of cover is advisable if you're working in places like Iraq, Lebanon and Kuwait ? or in some parts of Africa. Policyholders can call on the full policy cover, including hospital benefits and evacuation, in the event of injury by terrorists or as part of a broader war conflict.

Practical considerations

Some practical questions to ask before you sign up relate to how the policy actually kicks in when you need it. How, for instance, do you prove that you are covered? Difficult to do when you're being wheeled into a hospital where you have to prove your ability to pay before they will treat you. Many PMI providers issue cards with your name and policy details printed on them, and an emergency number to dial in case of difficulty over billing.

And how exactly is the bill to be paid? Do you have to pay for treatment on your credit card first and then seek reimbursement from your insurance provider, or will the hospital bill them directly?

Once you have settled these questions and added up the likely cost, you'll probably start to wonder if it's worth the expense.

It is. Even some of the simplest surgical procedures will set you back shockingly, and life-threatening conditions can cost an arm and a leg to treat, possibly enough to wipe out your savings. That's assuming the hospital will agree to treat you if you cannot demonstrate the means to pay.

Cutting the cost

Here are some ideas to reduce the cost of international private medical insurance:

• Ask your employer to pay or contribute (though employer-sponsored policies may only cover you while you are actually at work).

• Group together with colleagues and ask for a discount for ?bulk buying?. Some associations, such as the Expat Network (www.expatnetwrok.com), do this for you and pass on the discount.

• If you are buying another financial service, ask if they have any related ?money-off? deals. Some banks, such as Lloyds TSB International, offer discounts on international medical insurance policies if you open one of their bank accounts.

• Agree to an ?excess?. If you are cost-conscious, then there is one simple way to reduce the price of the premiums. This is to accept a larger ?excess? than is usual, meaning that, in return for lower premiums, you agree to settle the first part of any claim you make out of your own funds. If you set aside £1,000 or some other sum for this purpose, then insurers will generally lower their premiums proportionately.
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