Factors influencing international health insurance premiums for expats
Every year, health insurers calculate the price of international health insurance premiums based on a range of factors including but not limited to:
- Medical inflation
- Healthcare utilization
- Cost of prescription drugs
- Age of the policyholder
To help establish a better understanding of the above factors and their relationship towards health premiums, this article by Pacific Prime looks at what these factors are and also provides some essential tips on what you can do to reduce your premiums, or at the very least prevent them from going up even higher.
Factors that impact your international health insurance premiums
Being contacted by your health insurer or health insurance broker like Pacific Prime, and being told your premiums are going up is not the best of news for any policyholder. But from the perspective of health insurers, it’s pretty much standard practice. Here, we look at a few of the top factors to help you understand why.
Healthcare costs and medical inflation
Normally, international healthcare costs include the fees for medical care and services provided by your doctors, nurses, and/or other healthcare professionals. If you have both inpatient and outpatient coverage added to your international health insurance plan, then the costs will include access to overnight stays with medical support and follow-ups in clinics, respectively. Even the cost of X-rays, MRI, and other diagnostic scans and tests are included. Expats with an international health insurance plan can expect these healthcare costs to be covered fully and up to the limit provided in the country of residence.
Medical inflation trend
Every year, it’s guaranteed that the aforementioned healthcare costs will increase, as new medical health practices are studied, trialed, and implemented, as well as the adoption of more sophisticated state-of-the-technology for better healthcare. This is a trend that we cannot control as health insurers or policyholders, and is better known as the medical inflation trend.
It’s a given that as these healthcare costs rise each year, so do the health premiums that policyholders are expected to pay to gain access to the above medical services, treatment, and care.
Healthcare utilization, also known as Medical Loss Ratio (MLR), is one of many indicators of what health insurance companies use to monitor or measure their operational status and level of cash flow. It goes without saying that when utilization is high, the premiums for policyholders rise to cover any shortfall for the period.
In 2021 and beyond, we expect there to be a spike in claims and utilization as there will be a higher demand from patients and policyholders alike that will want to head to healthcare facilities to receive their delayed medical treatment and care. The COVID-19 pandemic in 2020 halted the majority of non-emergency visits and utilization in countries around the world, but with news of vaccination programs being rolled out around the world, this spike could happen soon.
Age of the policyholder
It is a sad fact in life that as we grow old, we are more prone to having an accident like a fall or developing a long-term chronic illness or condition, such as cardiovascular diseases, cancer, and respiratory problems, which are all costly to treat. This means policyholders are more likely to make a claim as they age, which is why premiums typically increase for them.
Applying age brackets and limits to calculate premiums
In general, all health insurers review age as a factor, but do so differently. Some apply age bands such as 50 – 60 or 60 – 70 to categorize clients, while others apply age limits like up to 65. Therefore, even if you have not made any claims yourself, your premium can increase simply because your age bracket changes.
(Take note: The decisions made by insurers often change with time too, as do their different terms and conditions.)
Cost of prescription drugs
Medically prescribed drugs are a norm for patients receiving life-saving treatment for certain chronic health conditions, such as heart disease, diabetes, and cancer. The cost of manufacturing to logistics and storage of these drugs can also vary from country to country, as well as the regulations to approve them for use. These extensive costs can add up and are passed on to patients when they are charged for medically prescribed drugs. Consequently, this is reflected in the annual premiums.
How to reduce your international health insurance policy premiums
Here are a few tips to know from our health insurance experts before renewing your plan:
Select a plan with the right benefit limits
You are encouraged to review your policy early on (at least 4 weeks before renewal) and get an assessment with an expert on the limits required, according to your age and health status.
Review your deductibles
Deductibles are the amount you pay out-of-pocket before the insurer will start paying for medical services. While increasing your deductibles can lower premiums, you are advised to consult insurance professionals to determine the right level of deductible while making your premium low and affordable.
Compare health insurance plans
When reviewing a plan and considering whether you want to go ahead with the policy or not, it is definitely more cost-effective to consult an insurance broker for plan comparisons. Getting a heads up on the latest trends from a global health insurance broker like Pacific Prime can increase your chances of picking the best international health insurance plan that covers what you need and at the most affordable price.
Discover more tips from our video on reducing health insurance premiums below:
Learn more from our experts and save today!
Whether you intend to renew now or later, or are just curious about health insurance plans, it’s always better to stay on top of the latest trends by downloading our Cost of Health Insurance 2019 Report! We will be releasing our 2020-2021 edition of the report soon as well, so watch this space.
Additionally, our Prime Guides page has a range of other reports, guides, infographics, and more to help keep you up-to-date on what’s happening in the world of insurance.
What’s great for expats is that we have international health insurance plans that cover all regions from around the world. Discover the countries that we provide plans and cover for below:
With a global reach, Pacific Prime can help provide impartial advice across a range of vetted and effective plans. By contacting us today, you can discover more tips and get advice from our experts on what to do when renewing your international health insurance plan.
His expert view and wealth of knowledge on insurance can also be found in his blogs for China, Dubai, Hong Kong, and Singapore.
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