The Rise and Rise of Expatriate Medical Insurance

by rbipremium on July 26, 2011

Annual Health Cover Increases Exceed Inflation – Why?

THE COST OF EXPATRIATE HEALTH INSURANCE and medical cover continues to rise. Even though inflation in most countries is relatively low and quite stable, insurance companies continue to raise premiums far beyond CPI every year. Double digit rate increases have been occurring in a low inflation environment and the basis for these increases have been the cost in claims from people who live longer and who have increasing demand for health care and of course technology. Granted, people are living longer and the elderly tend to require medical services more than most but the fact is that only 2% of expatriates are over 65 and therefore comprise only a very small population.

When the rest of the world and most industries have taken a huge blow during the GFC it seems that companies providing global health insurance have worked out how to survive – they raise the cost, reduce services and introduce more and more options and limitations to each policy. 10% medical inflationary adjust rates over 10 years would mean that the insurer would need to double the amount of cover at double the cost, however, only the cost has doubled whilst the amount of coverage has in fact decreased proportionately.

“I really can’t afford to spend $9000 a year on health insurance,” said San Francisco attorney Pamela Fasick. She is insured with Anthem Blue Cross and her premium rose 28% in 2010.

These massive and seemingly unfair policy pricing increases are infecting countries all over the world, in fact few are left unaffected by the rising cost of health insurance. In Malaysia, health insurance rose 15% last year, whereas in health-cover-friendly Canada, medical inflation is at a ridiculously high 15-20%, even though standard inflation hovers between 3-4%.

Paul Krugman from the New York Times says that, “it ’s an outrage…if private insurers (did not control costs) insurance would be a lot cheaper.”

With companies like Wellpoint Incorporated making multi-billion quarterly profits and others like Interglobal UK, predominantly an expat health insurer, rising premiums for overseas residents by 10% recently, who is really on the winning side? In addition to paying more each year for health cover, expatriates are getting less each year as well, with many exclusions and limitations being added to policies, whilst options, waiting periods and excesses continue to rise. Rises in deductibles, changed benefits, multiple policy selections, further exemptions being added to prevent paying out on the most claimed for injuries or illnesses. …all aimed at reducing claims and increasing shareholder revenue.

Part of this strategy is to make health insurance complicated: privatehealth.gov.au, lists 30,000 policies available from just 37 private health insurers in Australia and it is similar in other countries including the ever growing expatriate insurance market. Expatriates are finding it difficult to choose good cover, to know which policy is best and what options and benefits they need and which are unnecessary.

Rbi Premium, a worldwide membership based program offers two medical membership programs that come with free health insurance underwritten through Lloyds of London. There are no exclusions, no excesses, and membership pricing is significantly lower than every traditional insurance company we could find.

Perhaps this is the way most expatriates will go now – with a membership program which includes free health cover, rather than paying more and more and getting less and less cover each year through the big insurers.
The myth of medical inflation is inevitably going to shatter and programs like the Rbi Premium Membership are ready.

The Rbi Premium website can be found at http://www.rbipremium.com

The Next article will about Age Related Premiums

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