More and more countries require expatriates, tourists and business travellers to prove that they have health insurance before they’re allowed to come in, or reside. Charlotte Beugge looks at this global trend, and finds questions are beginning to be asked about the standard of care the basic plans which meet the legal requirements typically offer.
As regular readers of the English-language, expat-focused press around the world know, the plight of the expatriate who has found him- or herself with a serious and even potentially life-threatening medical condition, and no means to pay for treatment, is a heart-breakingly regular phenomenon.
Such individuals tend to appear, bandaged and looking brave, alongside articles about how they are unable to afford to fly home for the treatment they need.
Sometimes, the individuals in question had thought they were insured, but their cover had expired; or they never got around to signing up to a plan; or the coverage they had wasn’t good enough to cover their particular condition.
The matter of inadequate health insurance coverage for expatriates is unlikely to disappear anytime soon, but the problem of the completely uninsured expat, at least, is about to change, at least in many of the jurisdictions in which expats typically end up.
And as compulsory insurance cover for expatriates spreads, it’s presenting financial advisers, insurance brokers and international private medical insurance (IPMI) companies with potential opportunities – providing they’re able, and willing, to navigate the not-insignificant regulatory challenges involved.
Already there are a number of countries that won’t let anyone in who can’t prove they’ve got a health insurance policy, whether purchased by the individual or paid for by their employer. (See table, below.)
Others are rapidly moving in this direction, according to Joe Thomas, April International’s UK business development director.
“Increasingly there are many countries globally which dictate that expats must hold international private medical insurance, as part of a work visa requirement,” he says.
“In the Middle East, this first appeared in Abu Dhabi, but now the Dubai Health Authority and most other major Middle Eastern expat destinations are imposing the rule rigidly.”
Dubai scheme imminent
Dubai is currently in the process of rolling out a compulsory health insurance scheme, which was due to take effect on 1 July, but the enforcement date was pushed back, at almost the last minute, until the end of this year.
Under the Dubai scheme, all employers are being held responsible for making sure their employees are covered.
As currently set out, this means employers must at the very least provide their employees with a basic insurance package – fixed between AED550 and AED700 (£103.74/US$150 and £132/US$191) – so that those with annual salaries under AED4,000 (£754.45, US$1,090) would receive adequate health cover. The option to pay more, of course, remains.
In April the DHA reported that around 75% of Dubai’s expatriates were at that point covered by health insurance, leaving 25% to sign up in less than three months’ time. According to published reports, around 3.8 million people in total live in Dubai under a so-called Dubai residence visa, and it is expected that almost 95% of them will eventually have to come under the new mandatory insurance regime.
“In emerging economies like the Gulf region, where there is no state provision, it is increasingly common for authorities to consider mandating health insurance either via personal responsibility and /or employer responsibility – their aim being to avoid an unhealthy population that becomes the state’s problem,” Martin Sellars, head of international private medical insurance at Aviva, noted.
Those Gulf states yet to demand compulsory cover, meanwhile, could soon join the others – indeed, Qatar has begun to discuss it, while the Kuwaiti government has indicated that it could be the next. According to the Kuwait Times, MP Khalil Al-Saleh said ensuring that expats have private healthcare cover will reduce the pressure on government hospitals.
But it’s not just countries like Kuwait, struggling to keep their economies in the black as oil prices remain low, that are turning to the idea of requiring expatriates to pay for their own IPMI.
As Sheldon Kenton, global commercial director of Bupa Global, points out, the fact that there are more people than ever before who are “globally mobile” and who are setting up residence in foreign countries means that local health services in many of these places are under increasing pressure – at the same time that their native populations are also “living longer, and needing care for longer”.
Rapid change foreseen
Paul Winstanley, head of business development at Generali Global Health, notes that the nature of some of the countries considering mandatory health insurance for their expatriate populations means that such decisions won’t be months or years in the discussion stage, as they might be in some other places.
“Rules can change quickly in the Middle East: what might take us years of negotiation and discussion, can happen overnight there,” he says.
Abu Dhabi was one of the first countries to require expatriates to have compulsory medical cover, having introduced it a decade ago.
Charles O’Brien, global business development manager at Expacare, says this has given the Health Authority Abu Dhabi (HAAD) time to “fine tune the mandatory elements of the insurance contract, to better meet the needs of its citizens” – something that some financial advisers in Dubai are privately saying they can already tell will also be needed there.
“In order to satisfy residency visa requirements [in Abu Dhabi], people are required to have a HAAD-compliant policy in place,” O’Brien says.
“A system of fines operates to ensure compliance.”
A similar situation exists in Saudi Arabia, where, according to O’Brien, “The Saudi resident visa (Iqama) will not be issued, and fines will be levied, against individuals and companies that flout the rules”.
As a rule, enterprises involving a combination of governments and insurance companies tend to be complex affairs, and mandatory insurance schemes for expatriates are, those familiar with some of these schemes say, are no exception.
“Take the gulf, for example,” says Generali Global Health’s Winstanley.
“In Dubai, Abu Dhabi and Saudi Arabia, it is compulsory to have a policy with a local insurer. From the point of view of an insurer such as Generali, that means we have to have a partnership with a local insurer [in these countries] – in the case of Dubai, it’s the Dubai National Insurance and Reinsurance Company (DNIRC).
“We provide in effect the ‘Intel inside’ – the mechanics of the plan – while the policy is with DNIRC.”
And don’t even think about not taking out cover, and hoping to get away with it, he adds. “You won’t be allowed into the country: your visa would not be stamped.
“In some countries, you’ll also need to make sure you have cover when you depart – otherwise you won’t be allowed to leave.”
Of course, it’s not just in the Gulf states where expats and visitors are required to have medical cover. Switzerland mandates that all its residents have plans in place, as do Australia, Singapore and Malaysia.
In the Netherlands you have to buy a local policy, but many expats also buy international private cover to top up.
And in others, free provision might just not be good enough and you will want additional, private healthcover, even if it’s not compulsory. Adam Harding, international business development director of Jelf, a UK-based insurance and employee benefits consultancy and broker, points out that an international policy is a good idea in African and Asian markets, “as local systems can provide low level care, and treatment is often via tiered systems, where costs are much higher for higher quality care”.
Kenton of Bupa Global warns that if individuals wish to take out an international private health insurance plan to boost their cover, they (or their insurance broker) must ensure the policy is compliant with the country’s regulations.
“Before moving, expats should confirm the country [they’re going to’s] healthcare requirements. They should then consider whether or not the local mandatory cover, if required, meets their healthcare needs, and if they require a compliant health insurance policy.”
Thomas, of April International, points out that it’s not only the Gulf where only locally-sold policies are generally accepted: “China and Russia are also areas [in which this is the case]. The same is true in large parts of Latin America.”
And a local policy which simply complies with the minimum requirements of the country in which cover is compulsory may not be good enough for expats used to western standards of care. This is what at least one Dubai-based financial adviser says he’s currently grappling with, as his company has long offered IPMI to its staff at a discount that is far better than they will receive by paying the full, required amount – yet topping up the legal minimum amount, without their contribution as well, would be prohibitively expensive.
“Often the mandatory levels of insurance are much less than an individual may want or need, particularly in the Gulf region,” says Aviva’s Sellars, “and a health insurance policy designed to just meet the legislation might restrict access to cheaper hospitals.
“Good quality international health insurance policies, such as Aviva’s Gulf Solutions, will provide cover for much more than the basics, and can therefore provide expats living in the Gulf with peace of mind when it comes to their health.”
Another consideration, particularly for expats who travel a lot on business, is the need to take out an international policy that is acceptable everywhere they go. And if they move jurisdictions often, the complications can mount.
“The main issue with being forced to take a local plan is, if you move country, you may be moved on to a new local policy each time, as local policies are usually required to be supported by a locally licensed insurer,” says Lee Gerry of the Expatriate Group, a London based international health insurance provider.
“This means that you don’t have any continuity of cover. For instance, the pre-existing condition clause may be being reapplied each time.
“Also, if – like with Expatriate Group plans – you earn a no-claim bonus, you wouldn’t get the benefit for this, if you were moving to a new provider each time.
“Generally if you are living and working overseas, it is sensible to have some form of international healthcare insurance. The indisputable fact is that good healthcare is very expensive. International private medical insurance allows you to access the best healthcare available, and will normally allow you to obtain treatment in a country of your choice, even allowing you to receive private treatment in your country of nationality.
“At the very minimum, ensure you are covered for the potentially largest costs – a good hospitalisation plan, with medical evacuation, is essential, even if you take it out with a high excess.”
EHIC: still valid for British expats (for now) See page 2
EHIC: STILL VALID FOR BRITISH EXPATS (FOR NOW)
British expats living in EU-member countries have, at least until now, been able to rely on their European Health Insurance Card (EHIC, previously the E111), which entitled them to treatment in whichever EU country they were living in.
For the time being, that is still the case, according to EHIC Applications UK, the organisation which handles applications for the cards, as well as the Association of British Insurers (ABI).
In July, the ABI issued a statement to ensure that British holiday-goers realised that, “regardless of the vote to leave the EU, travel insurance and the EHIC remain a “must” for travellers “when travelling throughout Europe”.
As far as the ABI – which represents British insurance companies – is concerned, the EHIC “is not an alternative to travel insurance, so it is important to have both”.
“Many travel insurers will waive their excess (the first part of the claim that you pay yourself) if you use your EHIC,” the ABI statement pointed out.
EHIC and travel insurance ‘not enough’
A few days after the ABI’s statement came out, Jelf, the employee benefits company, issued its own statement, warning employers that, in its words, “the EHIC and travel insurance do not provide sufficient protection for employees working or traveling overseas”.
“They never have and are unlikely to in the future,” said Adam Harding, business development manager of Jelf International.
The reasons, according to Jelf, are:
* EHIC provides cover akin to what is available for the local population, not all countries have a free-at-the-point-of-use healthcare system like the NHS in the UK
* EHIC is designed for medical treatment deemed necessary before the cardholder returns home
* EHIC only allows individuals to access state-provided facilities – these may be free or at a reduced cost – equivalent to people who live in that country
* As treatment is based on equivalent state healthcare, facilities may be oversubscribed or remote.