Thanks for all the feedback from last week's "Net Worth" on the perils of ignoring medical insurance. Congratulations if you have crossed the line and are seriously looking at protection. Now let's look at some of the practicalities we need to think about. Readers have raised some interesting questions. Here are some of the most talked-about issues.
LOCAL OR INTERNATIONAL
One topic relates to the difference between types of medical insurance policies available. Some readers claim to have a really good local insurance product that gives them all the cover they require. This is a personal choice but as with all things in life, you get what you pay for. If you have a cheap local policy there will be drawbacks compared with reputable international insurance plans.
Some readers say they are adequately covered by such a local policy but they are not seeing reality. There are many exclusions and sub-limits affecting the cover you secure. Sometimes the overall limits will be inadequate. For example, in a claim for an operation there will a sub-limit for the surgeon, anaesthetist, hospital facilities, operating theatre and each of the other components of treatment required. Thus, if the surgeon's fees are actually 100,000 baht and the policy sub-limit is 45,000 baht, you will have to pay the difference of 55,000 baht yourself. This applies to each aspect of treatment, and thus this type of local cover can be offered at a much cheaper premium.
If you decide to take an international policy with a company of high repute, costs are refundable in full regardless of actual individual charges for the different features. You will also find that international medical policies allow you to be treated at any hospital, whereas local policies often restrict the facilities you may use.
International policies invariably carry a medical evacuation facility so that wherever you are, if the available local facilities are inadequate you are evacuated to the nearest place where you may be properly treated. They will also often pay for travel of a close relative to be with you and will always allow for parents to travel and be with their insured children.
Many British expats think their ultimate fallback is to travel to the UK to receive any necessary medical treatment. This is perfectly feasible provided they understand that in most cases they will face a bill for the services received. This will be in addition to the travel costs they incur.
Contrary to apparent popular belief, once you have lived outside the UK, in a non-EC country for more than one year, you are not necessarily entitled to free UK National Health Service care.
If this is a surprise to you, please take it seriously. If you are in the UK you are entitled to walk-in emergency treatment for accidents and emergencies free of charge. Once you are admitted to a hospital, for whatever reason, you are liable to pay for any medical services you receive if you are non-UK resident. Payment of national insurance contributions or UK taxes has no influence on this. It is a question of your residential status. It may be unfair but these are the rules.
Of course the dodgers, divers and cheap Charlies will make an effort to maintain a UK address and if they need to go back they will claim that they are UK residents and can receive free health care. They may get away with this but they will also take a risk that the central UK database ties up their claims for residence and free NHS health care with their tax status and puts them in a Catch 22 situation overall. If you are one of these people, the system will eventually catch up with you.
There was recently a case of a British couple who were living in Turkey and the wife returned to the UK for medical treatment. The treatment was not refused but the NHS levied a charge for all treatment administered. After lengthy legal battles it emerged that the patient was to be charged no matter the status of previous contributions to National Insurance and UK taxation.
Some readers asked whether an insurance deductible applies to each visit to the doctor and whether there is such a thing as an annual deductible. Yes, there are medical insurance policies available with an aggregate annual deductible. To claim, you would need to submit several individual claims, which would not be payable but would aggregate as the deductible. All further costs will be then be fully reimbursed. This facility is the exception rather than the rule.
Some readers also seem to think that the deductible applies to each and every visit to the doctor, which is not the case. If treatment is received for the same condition over several different visits, then that constitutes a single claim that will only bear a single deductible.
There have also been many responses and questions on age limits and pre-existing conditions. It is now becoming more the norm to extend the entry age limits for medical insurance and several companies now accept initial applicants into their seventies. Once you are insured, companies usually continue to extend your policy on an annual basis, sometimes for life and always for periods well beyond applicant entry points.
The question of pre-existing conditions can be tricky. These aspects are difficult to discuss on a general basis. They will all depend on the individual and the conditions that currently exist.
As a general rule, a pre-existing condition is one where you have seen a medical specialist, taken drugs or otherwise had any form of treatment for a condition within the previous two years. If you have a specific case to be considered, it would be best to see a professional adviser so that he can talk to various insurance companies on your behalf before you actually make a decision about what you should do.
One of the alarming things about expats globally is that their health is deteriorating more rapidly than any other group. There are two factors that are contributing to this more than any other. First are the socialising aspects of the expat life. This leads to a heavy consumption of alcohol and often heavy smoking, which will adversely affect your health if not kept under control. Second is the fact that many expats have stressful jobs or businesses.
These two factors combined tend to give way to a high incidence of hypertension and obesity. They are deadly and statistics show that there are more incidents of heart attack and other stress-related conditions among expats than in other groups. Make sure you have adequate medical insurance for any eventuality.
Andrew Wood has been an expat in Asia for 33 years and is executive director of PFS International. His articles, which cover the complete A-Z of financial planning, are available through the PFS library to readers on request. Questions to the author can be directed to PFS International on 02-653-1971 or emailed to email@example.com.
About the author
- Writer: Andrew Wood