Many expatriate clients and their employers find the cost of a basic private medical insurance plan difficult enough to accept, without having to think about paying extra for certain specialist coverage that doesn’t come with the standard package.
But could this be a false economy? Charlotte Beugge investigates…
Does a thirtysomething, non-smoking financial services executive, about to be posted to Dubai for a couple of years by his bank, need a health insurance plan with extra coverage added on, or is a basic executive international private medical insurance (IPMI) plan sufficient?
Variations on this question are increasingly being asked by company benefits executives, financial advisers, and expatriates themselves, particularly as the cost of private health insurance continues to rise in many markets.
It could also become a major issue for British companies with staff in Europe, as well as for those staffers themselves, who have, until now, been able to take advantage of the EU’s reciprocal healthcare arrangement, upon presentation of a so-called European Health Insurance Card (EHIC).
Because once the UK leaves the European Union, unless reciprocal arrangements are negotiated, British expats will need to provide for their own healthcare needs, the way they do now everywhere else in the world.
One of the advantages – obviously – in giving policyholders the option of choosing at least some elements of their medical insurance plans, explains April International UK’s business development director Joe Thomas, is that it enables companies to keep their costs down, since its clients pay only for the extra benefits they need.
“As an organisation, cost control is a vital focus for us, as it allows us to offer lower cost premiums in the long run,” he added.
As with any kind of insurance, the challenge for insurance companies is to sell plans on anything other than cost: because both individuals and companies will, of course, be extremely conscious of the price of cover.
This is not unique to health insurance; home policies can add on extras to cover potential legal matters, while automobile insurance plans may come with added breakdown coverage.
With international private medical insurance, the add-ons range from the straightforward and ever-popular dental coverage to such “exotic” options as kidnap and ransom (K&R), or kidnap for ransom and extortion (KRE) insurance.
Not a simple answer
But as with most things having to do with protection insurance, the answer isn’t straightforward, interviews with industry experts reveal.
One of the reasons for the confusion is the existence of another factor in the decision equation, which is “service levels” – that is, the level of healthcare service an individual (or company taking out the policy on the individual’s behalf) can expect to get in exchange for signing up to the service.
Beverly Cook, managing director of UK-based global insurance broker Expacare, which offers international PMI policies underwritten by Lloyd’s of London, says she has heard “many stories over the years about policies only being considered based on service levels”, and not on cost at all.
“However, the reality seems to be different, with price playing a significant part in the decision making process,” she adds.
“I’m not convinced that extras sway purchasers, although I do believe there are some extras that would make a difference, depending on which country the policyholder is planning to go to: for example, there are some countries where security evacuations become more important [to be provided for in a client’s policy].”
AXA PPP International says it offers four levels of cover, ranging from providing emergency and inpatient treatment on its Standard plan, up to its top-of-the-range plan, Prestige Plus, which includes extensive outpatient limits, maternity benefits and preventative cover, such as health checks and dental treatment.
But interestingly, the company’s sales and marketing director, Kevin Melton, says, all its international plans include evacuation and repatriation cover as standard, “because we believe it’s an essential benefit”.
“And although our plans are tiered, we offer our customers optional upgrades to help suit their needs, as a flexible approach is key in attracting and retaining customers,” he adds.
“So for example, those on the Standard plan can add up to £750 cover for outpatient treatment, which includes diagnostic tests, physiotherapy and for psychiatric treatment. And those on its Prestige Plan can increase their dental cover to include check-ups and routine treatment.”
Popular extra: red24
One extra that seems to be popular among insurers is red24, a package of emergency repatriation and “crisis management” services. The level of red24 cover individuals receive depends on their plan; some companies claim to offer red24 coverage for “free” with their basic IPMI plans, while others charge.
Red24 offers different levels of coverage, with basic coverage consisting mainly of access to an advice line, while the higher level plans would give the insured access, if needed, to the services of red24’s “action response experts”.
Last year such IPMI providers as Allianz Worldwide Care and April International UK announced they were to start offering red24 coverage to their clients, in the wake of some terrorist incidents in Europe that had called attention to the risks that can exist in countries people don’t normally think of as particularly dangerous.
But red24 isn’t just for those who plan to be living or working in a high-kidnapping-risk zone, or who might conceivably have need of a medical evacuation if they fell ill while abroad, Damien Lenihan of Aetna International points out.
“We once had a client who had his wallet stolen,” he says.
“Red24 arranged to meet him on the steps of St Paul’s [Cathedral, in London] with enough cash for him to get home safely.”
| Expatriates ask…
Is maternity coverage
One extra that some top-of-the-range IPMI policies offer is maternity cover, typically offering around £10,000 for “routine” deliveries.
Even if one were going to opt for a particular policy that included this anyway, and therefore the extra cost isn’t really seen as an issue, it’s worth asking just how much having a baby abroad would actually cost.
A US website, www.babycenter.com, did just that, and was told that the cost of delivery in a private hospital ranges from US$1,000 in India up to $51,000 or more in the US.
Caesarean sections will always cost more than routine deliveries, and may not be covered in full by ordinary insurance plans.
Those travelling to high-risk areas are, though, generally thought to be wise to consider obtaining good crisis management/kidnap and ransom insurance, experts point out. For as red24 reminds its customers and would-be customers every year, with the publication of its annual “Global Kidnapping Risk Map”, certain areas of the world really are just a lot more risky than others.
(For example, according to red24, you’d want to make sure your K&R coverage was up-to-date before traveling to such places as Syria, Afghanistan, Libya and Yemen.) Brazil, Mexico, Colombia, Pakistan and Kenya are not as dangerous, but the kidnap risk level is considered “high”.)
Possibly less urgent than K&R coverage for those planning to visit those places, meanwhile, would be private dental insurance.
Although dental coverage is often available to add as an extra to IPMI plans, in many foreign countries popular with expats, dentists’ charges are lower than those typically charged by their British counterparts, making insuring for it less urgent.
It would only cost US$15 (£12) to see a private dentist in the Philippines, for example.
And while treatment in the US is pricey, it’s similar to the UK in pricing terms – or around US$200 (£165) for a large, white filling according to www.dentist-prices.com.
Root canal treatment in Dubai costs around US$356 (£293) says www.dentaldepartures.com.
NEXT PAGE: At a glance: some of the options on offer from three key IPMI providers
At a glance: some of the options on offer from three key IPMI providers
All of Bupa Global’s IPMI plans include medical evacuation cover; annual health checks; mental health cover; coverage for hereditary, congenital and chronic conditions; coverage for transplants and rehabilitation, as well as hospice and palliative care.
Sheldon Kenton, managing director Bupa Global said: “Depending on your level of cover, other benefits available to our customers include dietary guidance, genetic cancer screenings and compassionate visits for family, if you have a sudden accident or illness.”
Additional benefits, such as medical repatriation or acupuncture, can be included, depending on the policy. Acupuncture costs around £50 to £70 an hour in the UK or the approximate equivalent in the US – so it’s not a huge cost unless you need lots of sessions.
April International’s policies all include as standard the option to use Best Doctors – a second-opinion providing service offered by a Boston, US-based company, Best Doctors Inc – and, since last year, benefit of access to something called the Blood Care Foundation. This is a global network of blood banks, that aims to provide as quickly as possible the exact type of blood needed to almost any location in the world.
According to April International, one of its policyholders unexpectedly had to make use of this service recently, after he was injured in a fall while travelling in Mexico. As it happened, his his blood type was O negative, which is shared by only 7% of the population, and none was available locally at the time. But thanks to the Blood Care Foundation’s services, a supply was dispatched from Florida, enabling the policyholder to make a full recovery.
Aetna International’s plans offer a range of benefits, depending on the policy. Damian Lenihan, director of sales, points out that while some plans may offer inpatient and consultant fees, added benefits can be invaluable.
“We include extras such a pre-trip planning – so, for example, if you are being posted abroad and are on regular medication, you can find out from us what your medication is called where you are going, and where your local pharmacy is.”
Lenihan adds: “We also have an employee assistance programme. This is a helpline which you can call with any issue you have. Many overseas placements fail because of family issues – so it’s vital employees moving abroad get all the help they can to settle in.”
With its most comprehensive policies, this employee assistance programme includes face-face consultations for international assignees, while those on lower level plans have access to consultations via the telephone.
Other optional add-ons to Aetna International plans include personal accident cover, dental cover, travel insurance and maternity cover. The exact level of such coverage would depend on the plan, according to Lenihan, who notes that this allows individuals as well as corporate clients to tailor their coverage to fit their, or their employees’, precise needs.
|An example of how that extra bit of coverage can make all the difference
A recent incident involving an April International IPMI policyholder reveals how easily a situation in a far-off land can take an unexpected turn for the dangerous – and how, when it does, being able to call on one’s insurance company can make all the difference.In this case, the policyholder, for reasons that weren’t given, decided to cycle over the border from Israel into Egypt, without taking with her the right papers. In Egypt, the policyholder was knocked down by a car and, badly injured, needed hospital treatment – yet lacked both financial means and documentation to get it.She did have international private medical insurance, however, and it included access to April Assistance, which arranged for her to be taken by ambulance back to Israel.
“Negotiating the border crossing took immense skill and tact,” said Frederick Francois, marketing director April Group International Division.
“Not only was she in Egypt illegally, with few if any of the correct diplomatic papers, she also had a limited ability to prove her own identity, in one of the world’s most dangerous border crossing areas, where the normal course of action in such circumstances can be arrest and questioning rather than sympathy and help.”