International Health Insurance for Americans Overseas
In the last few weeks interest has spiked for American citizens considering immigration overseas, with the Canadian Immigration website receiving so much interest that it was unavailable due to webserver constraints on November 9th 2016.
Any USA nationals considering a move overseas should be aware that healthcare systems around the planet will be different from the one they are familiar with, and in most cases all developed western nations will offer some form of single-payer government operated medical scheme. However, in order to access the government provided healthcare system (whether in Australia, Canada, or the United Kingdom), individuals will typically have to meet the residency requirements for admittance.
To bridge the gap between arrival in a country and receiving the residency status which will enable admittance to a system like the NHS, expats worldwide normally obtain some form of international health insurance – a product designed to ensure that that individuals living outside of their country of nationality are able to obtain comprehensive medical treatment.
There will be local health insurance options available in every country worldwide, even when that country has a public healthcare service. However, there are some extremely important differences between local and international health insurance plans in countries like Hong Kong, New Zealand, England, and Australia.
Local vs International Health Insurance for American Expatriates
Choosing whether to purchase local health insurance or international medical insurance in a new country can be a daunting challenge; in many cases the options can simply be overwhelming – do you look at cost first or the plan’s benefits, what about portability in the event that you relocate or repatriate, and how do you manage any pre-existing medical conditions which may have been covered under the Affordable Care Act (Obamacare) or your previous health insurance plan?
Medical Insurance Premiums
An obvious starting point in obtaining medical insurance coverage in a new country is to look at the basic cost of the plan – especially if you are not receiving a budget for the coverage from your employer and are expected to cover the costs of the plan out of your own pocket.
In this area it is critical to understand that local health insurance plans will overwhelmingly be Experience rated, while international policies are normally Community rated.
Medical insurance policies which are experience rated are often much cheaper at purchase than community rated plans – this is because experience rated premiums are priced based on your claims history (or experience) under the plan. Without any claims, there is no history, and consequently the cost of coverage can be very attractive at the time of purchase. However, once any claims are made the cost of those claims will be factored into the cost of renewing the plan.
This means that, under an experience rated plan, should you have a major claim you can reasonably expect the cost of your renewal to increase by at least the claim amount.
The opposite to this is found in community rated health insurance policies (which are widely used in the USA) where the initial cost of the plan is based on the overall medical risk of the community sharing the policy – the community in this case would be everyone of the same age, with the same plan coverage, and with the same geographical area of coverage (we’ll get to this in a bit). Generally the industry standard with international medical insurance policies, a community rated plan will not increase because of your individual medical claims; these plans will get more expensive as you age and as the cost of healthcare increases (around 10% per year), but not because you have made a claim.
Depending on your need for the health insurance, whether you want ongoing support for outpatient doctor visits and specialist consultations or you really only want coverage for a major inpatient hospitalization, both Experience and Community rated plans have their own place in the global health insurance market – but the longevity and long term usefulness of the plan can be hindered or expanded based on the initial choice of which type of premium rating you opt to go with.
Understanding Health Insurance Coverage Limits
Just as there is a difference in premium ratings between international health insurance and local medical insurance options worldwide, these plans will also normally vary quite substantially when it comes to the benefits on offer.
Simply put, local health insurance plans will often have stringent sub-limits based on the treatment the policyholder is receiving while the international style options tend to operate as “all inclusive” up to extremely high overall policy maximums.
To put this in perspective, an ACL repair in a Hong Kong hospital (the second most expensive medical system in the world after America’s) will cost roughly US$ 10,256. However, most local health insurance plans would consider an ACL repair to be an “intermediate” operation and will cap the max coverage for the operation somewhere in the region of US$ 5,000 – 6,000. This means that despite having the insurance you would be responsible for covering at least US$4000 of the cost of the surgery out of pocket, before any deductibles are factored and after your initial premium payment (which would likely have been in the region of US$ 1,000 – 2,000 for a health 30 year old male under an experience rated plan).
An International health insurance plan will normally cover the cost of the ACL surgery in full up to the state overall maximum benefit of the policy – generally starting at basic plans in excess of US$ 1,000,000 for most international health insurance underwriters.
If you’re an American seeking serious hospital only protection then there may be something to consider in obtaining a local health insurance policy for catastrophe only coverage – but be aware that you will likely have to contribute at least the policy premium towards the cost of your care in the event that you actually make a claim. If you are considering the insurance for ongoing day-to-day management and treatment of health conditions, the overall limits on the international plans make these a much more attractive long-term proposition, even in light of the fairly hefty price tag.
International and Local Claims Networks
One thing to be said of local health insurance options worldwide is that the domestic claims networks tend to be vastly superior to the international offerings – while international medical insurance companies can boast extensive direct settlement facilities, they simply do not have the advantage that local providers have with regards to understanding the local healthcare industry.
However, it is important to remember that the coverage afforded under many local providers’ direct settlement facilities is capped under the plan’s sub-limits, and will likely impact your renewal premium when you use them.
International medical insurance providers do offer some direct claims options but these will vary in size and convenience depending on the specific insurance company in question. Outside of costly in-patient medical treatment where you are normally required to pre-authorize the care ahead of time (as is the case with maternity benefits), most outpatient coverage under an international health insurance plan will be undertaken on a pay and claim basis – you will have to pay for the cost of your treatment upfront and claim back your expenses minus any applicable deductibles at a later date.
Worldwide Health Insurance Coverage
The major area of importance to any American expatriate considering the purchase of health insurance overseas (whether short term or to cover a longer stay outside the USA) will likely be with regards to the plan’s area of coverage.
Local health insurance plans are designed to protect you within the borders of a specific country – in fact, this is exactly the type of coverage you will have had domestically in the USA under Obamacare or your employer sponsored insurance policy. These plans would typically not have offered you medical protection outside of the borders of the USA, and in most cases you would have to purchase supplementary travel insurance to ensure that you are protected against the costs of your healthcare should you suffer a medical emergency in Canada, Mexico, or any other destination.
From Hong Kong to the United Kingdom, local health insurance options are pretty much the same in terms of their geographical area of coverage – you’re only protected for the costs of your medical treatment while you are within the borders of the country where you purchased the plan.
The flip side of this are international plans which will typically offer two main areas of cover Worldwide and Worldwide excluding the USA. While some international insurers can offer regional specific coverage, such as Asian only health insurance plans, a true international health insurance policy is designed to that you can take it anywhere outside of your country of nationality – giving a lot more flexibility than a local health insurance option.
The reason that the coverage is normally broken down into worldwide or worldwide excluding the USA is primarily due to the fact that healthcare in the States is the most expensive in the world, and choosing to include the USA in your geographical area of coverage under a global medical insurance policy can lead to a dramatic increase in the overall premium of the plan. Its also important to note that, as an American, if you decide to repatriate home (perhaps due to a change in the political or economic situation) all international health insurance options will stop covering you at the plan renewal.
International Health Insurance Options for Americans Overseas
So there you have it, our short as possible run down on the major choices facing Americans considering the purchase of health insurance outside of the USA.
There are a plethora of variables in any health insurance policy, so this article should by no means be considered the final word in international health insurance; but rather an entry point to help you answer some basic questions in your search for medical insurance while outside the States.
If you have any more questions CCW Global would be happy to help point you in the right direction. Simply complete the short form at the top of this page or Contact Us to speak to one of our expert brokers as soon as possible.