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Healthcare Insurance Considerations by J Leslie Smith B Sc Econ Honours
2) The quality of local facilities, hospitals, nursing care, doctor skills and knowledge of English in the area you are considering to make a permanent overseas home; 3) Whether or not you may be evacuated back to USA or elsewhere and have elective treatment in your home country too, if you so wish. There are currently some 30-40 million expatriates abroad, with millions of others retiring for long periods to a country which has never before been their long-term home. The growth of modern digital communications, Internet access and video conferencing has now transformed the level of financial and insurance services available to the individual, family or company anywhere in the World on a location, non-specific basis. International medical insurance companies, medical assistance groups, underwriters and brokers are now all moving into what is a huge and growing market for new healthcare insurance services. The expatriate and those retiring abroad, now have far more available quality healthcare insurance products available than ever before. Help lines from these companies for clients are multilingual and available worldwide 24 hours a day. You may be in Belize, Berlin, Baku or the Bahamas, you can still be well serviced for your medical and healthcare insurance needs by international internet broker advisors and a wide range of insurance companies who specialise in this field. However, for the older clients going abroad, cost and level of cover must be prime considerations. Therefore, a check out first of local OUTPATIENT services is also a useful first move. Many developing countries or overseas retirement communities have good local Doctors and drugs, dressings, outpatient costs are very cheap compared with the USA. However, for serious hospital issues and treatment most would prefer the best care possible, probably “back home”. We now come to the area of proper medical insurance advice and budget planning to take you over the longer-term not short term. If you are retiring at say 55 years old, your costs of premiums will rise year on year with both medical inflation and often with “age banding” where the insurer raises premiums each five year band. If you have been covered in USA for example for comprehensive cover at say age 54 years, this cost could rise beyond your means whilst retired overseas at say, 70 years old. What is one to do? There are several solutions, one of course taking an increasing level of voluntary deductible against premium rises, thus keeping your budget costs stable. We also suggest that you do not take out fully comprehensive cover after aged 60 years, unless you can really afford to keep up premiums for life. It is much better to locate services for outpatient care in your local community but have a catastrophic full cover hospital plan with elective cover for 30 days a YEAR BACK IN USA or home elsewhere. This budget strategy will save you thousands of dollars over the long term whilst ensuring that your emergency/hospital insurance is always there for you. Many insurers call these plans “Standard Plans” giving full cover for inpatient and daycare, but no cover for outpatient. Thus, if you are placed in a hospital bed, they pay, if you are walking wounded, you pay. Remember, a phone call to the insurer help line takes care of everything when you need to be admitted to a hospital bed, even for a day. The insurer can settle directly, place a bond on your behalf and talk to local Doctors on the ground and consultants, in their own language too, if you have trouble in this respect. Let me now show you a few interesting examples of this budget strategy for health insurance retiring abroad. Couple aged 54 yrs and 54 yrs, USA passport holders, retiring to Belize or somewhere in South America. (all premiums in sterling pounds) If this couple stayed on Global Area 3 cover with comprehensive care anywhere in the world, they could expect to pay premiums such as those illustrated below. 1 British Pound = 1.5120 US Dollar 1 US Dollar (USD) = 0.6614 British Pound (GBP)
Clearly our imaginary couples are going to pay a great deal more at age 64 yrs and at 74 years old, more than double the above premiums in most cases. We therefore need a cost effective health insurance strategy, which works over time whilst giving essential peace of mind to this couple, that some cover is in place and they have protection in their elder years. The answers are three fold. Firstly, our 54 year old couple living in Belize, no longer need USA cover all year around so can go to a lower Area 2 cover, with possibly 30 days a year back in USA or Canada for elective care, or a minimum, have cover for emergency care there in USA. Secondly, they have found a good local doctor and small outpatient clinic so no longer need to pay fully comprehensive premiums. They go for a standard hospital plan only, but for worldwide, giving cover back in USA too. Finally, as they age, they have decided to increase the level of “ co insurance” or voluntary deductible amount on claims to reduce their premiums further The differences in premiums now become quite dramatic. Plans below are now “hospital and emergency cover only” not including outpatient Premiums below are however, still applicable to our 54 year old couple in Belize. 1 British Pound = 1.5120 US Dollar 1 US Dollar (USD) = 0.6614 British Pound (GBP)
Clearly, our couple need to examine Area of cover, type of plan and benefits they really feel are essential to them and then decide their ten-year plan. The premiums above present a dramatic saving on those mentioned earlier, yet from a serious illness viewpoint, where hospitalisation is essential they give our couple peace of mind. If we move them on now to 64 years old still in South America. They have now decided to co pay some deductible or voluntary excess so as to reduce their premiums against age increases. Couple both aged 64 years old 1 British Pound = 1.5120 US Dollar 1 US Dollar (USD) = 0.6614 British Pound (GBP)
Now to illustrate our couple staying another few years and being joint 69 years old in Belize. They now take the maximum co insurance or voluntary deductible possible as shown. I have just given two examples here, the William Russell Group Global Health Plan called Selectcare with a 40% discount for a £1000 pound deductible per claim and InterGlobal with their Standard Plan and £1000 deductible for a 20% discount in this case. Couple both aged now 69 years old. 1 British Pound = 1.5120 US Dollar 1 US Dollar (USD) = 0.6614 British Pound (GBP)
Other plans from such as IMG based in USA, offer clients the possibility of very large deductibles to reduce premiums. Their Global Medical Insurance Plan for a 69 year old falls to just US$ 3,700 dollars annually with a US$5000 deductible added. We are thus able to demonstrate that healthcare insurance premiums may be kept flat, or be controlled on slow rises over many years, if clients are willing to change the type of plan, limit their cover, Area of cover and also take on voluntary excesses or deductibles as they age. Medical Insurance sales people working no commission, may often try to sell an “all bells and whistles” policy, as that will increase their income. If the sales person is a tied agent or sales person of the product carrier, the client is not given a full range of choices. Only a truly independent specialist broker can offer such advice. Medical inflation is running at some 8-10% annually and premiums increase again also by age banding every five years or so. It is often financially impossible for a 50 year old to have the same level of cover at age 70 years old, particularly a full comprehensive global plan, it would be just too expensive. The techniques of strategic planning outlined in this report, can give comfort to those retiring. If your income is more or less fixed on retirement, then your healthcare insurance budget should be the same and you can manage this by the simple methods shown above. Do not overinsure or have cover for an Area you do not need. If local facilities for outpatient care are reasonable, then why not use them? If our 54 year old imaginary couple start their medical insurance budget with say US$4000 dollars per year, they can still have a reasonable level of “catastrophic cover” aged 70 years old, with proper planning and impartial advice from a Broker in this field. A good standard plan includes full cover for accidents and emergencies, intensive care, theatre costs, hospital accomodation, surgeons, anesthetists, and physician’s fees. Standardcare also covers in most cases, prescribed medicines and drugs, pathology, diagnostic tests, oncology tests drugs and consultant fees, X rays MRI and CT scans. Radiography, radiology, radiotherapy, and chemotherapy. Physiotherapy may be included also parent accomodation with some plans and post hospital treatment. Other benefits sometimes offered as Standard are organ transplants, nursing at home, hospital cash benefit, legal expenses, personal legal liability, emergency evacuation and repatriation, repatriation of mortal remains or costs of cremation, burial. It is vital that clients read the product brochures and conditions carefully, as medical insurance can be a minefield to the unwary. However, it can also be a godsend, if you have the right cover just when you most need to use it. J Leslie Smith
B Sc Econ Honours
International Medical
Insurance Brokers to expatriates and permanent residents abroad or overseas,
whether working, retired or traveling.
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