International Private Medical Insurance VS Local Health Insurance Plans

In this iPMI Global Insights article we examine the main differences between international private medical insurance and local health insurance plans. The article focuses on the differences between IPMI and local health insurance plans, the advantages and disadvantages of each, and the implications for both expatriates and insurance providers.

Key Themes:

• Expatriate Healthcare Needs: The article centres around the healthcare needs of expatriates, individuals living and working outside their home country. The discussion highlights how IPMI plans are designed to cater specifically to the unique challenges faced by expats, while local plans often fall short.
• IPMI vs. Local Plans: The core theme revolves around the comparison between IPMI and local health insurance plans. We weigh in on the benefits and drawbacks of each type of coverage.
• Localization of Expatriates: The article explores the trend of expatriate localization, where expats transition from international contracts to local contracts, impacting their healthcare coverage options.
• Top-Up Cover: Given the limitations of local plans in many countries, the article discusses the role of "top-up" cover, where IPMI plans supplement the basic coverage provided by local plans to ensure comprehensive healthcare protection for expats.
• Partnerships and TPAs: The role of joint ventures, partnerships, and third-party administrators (TPAs) in localizing IPMI products and services is examined. The advantages of leveraging local expertise and networks to provide more effective and cost-efficient healthcare solutions are highlighted.

Main Ideas and Facts:

Advantages of IPMI: Global Coverage

IPMI provides healthcare coverage that transcends national borders, ensuring access to quality medical care regardless of the insured's location. International health insurance plans are designed to cover all costs of high-quality medical care regardless of the location of the insured person.

• High Benefit Limits: IPMI plans typically offer significantly higher benefit limits compared to local plans, ensuring more comprehensive coverage for various medical expenses.
• Portability: IPMI plans offer portability, allowing expatriates to maintain coverage even if they relocate to a different country, providing flexibility and continuity of care.
• Expat-Specific Benefits: IPMI plans often include benefits tailored to expatriates, such as evacuation, repatriation, and multilingual assistance services, addressing the unique needs of individuals living abroad.
• Disadvantages of IPMI: Higher Premiums: IPMI plans generally come with higher premiums compared to local plans, primarily due to their broader coverage and additional benefits.

Advantages of Local Plans: Lower Costs: Local plans are generally more affordable compared to IPMI, making them a more cost-effective option for individuals on a tighter budget.

• Tailored to Local Needs: Local plans are designed to cater specifically to the healthcare needs and regulations of a particular country, ensuring relevance and compliance.
• Disadvantages of Local Plans: Limited Coverage: Local plans often have restricted coverage, with lower benefit limits and potential exclusions for certain medical conditions or treatments. As noted by Andrew Apps, Director at ALC Health, local plans often involve “low benefit limits (sometimes the benefits are blatantly only a contribution towards the total cost of treatment).”
• Single Country Coverage: Local plans typically provide coverage only within a specific country, leaving expatriates vulnerable when traveling abroad or returning to their home country.
• Limited Expat Access: Eligibility requirements for local plans may exclude expatriates, particularly in countries with strong state-provided healthcare systems.

Implications:

• For Expatriates: The article emphasizes the importance of carefully considering healthcare coverage options when living and working abroad. While local plans might seem more affordable, their limitations often necessitate the need for top-up IPMI coverage to ensure comprehensive protection and access to quality care.
• For Insurance Providers: The evolving landscape of expatriate healthcare presents opportunities for insurance providers to develop innovative products and services that cater specifically to the needs of this growing segment. Offering flexible top-up solutions, leveraging local partnerships and TPAs, and investing in technology to enhance customer experience are key areas of focus for providers aiming to thrive in this market.

Here are some of the key differences between international and local health insurance plans:

International health insurance plans, also known as iPMI, are designed to cover expats for almost any health issue that arises. Local health insurance plans, however, are designed for the local population and act as a support to the local healthcare facilities.

Coverage: International plans usually have much higher benefit limits than local plans. They may include generous cover for GP visits, chronic conditions, routine pregnancy and childbirth, and evacuation and repatriation. Local schemes, on the other hand, may have low benefit limits, out-of-network penalties, co-pay benefits, and no or limited coverage outside of the country.

Portability: iPMI plans are typically portable, meaning that the policyholder is covered regardless of their location within their area of cover. Local plans, on the other hand, only provide cover in a single country.

Communication: International plans often have multilingual capabilities to help expats communicate with healthcare providers and navigate the local healthcare system. Local plans, on the other hand, may only be available in the local language, which can be difficult for expats6.

Cost: International plans are usually more expensive than local plans due to their more comprehensive coverage. However, they provide peace of mind for expats living abroad. Local plans are less expensive, but the benefits are far less comprehensive.

Target Audience: iPMI plans are designed with expats in mind. Local plans are designed for the local population.

Overall, international health insurance plans are much more suitable for expats living abroad. While they may be more expensive than local plans, the cover levels are usually much higher, and they offer peace of mind and support for expats who are navigating a new healthcare system.

International Private Medical Insurance (IPMI) vs. Local Health Insurance FAQs

What are the key differences between international and local health insurance plans?

International health insurance plans (IPMI) are designed for globally mobile individuals and offer coverage across multiple countries. They typically have higher benefit limits, cover a wider range of medical expenses (including evacuation and repatriation), and provide multilingual support.

Local health insurance plans are designed for residents of a specific country and provide coverage within that country's healthcare system. They are often more affordable but have lower benefit limits and may not cover expenses incurred outside the country.

What are the advantages and disadvantages of a typical local health insurance plan?

Advantages:

• Affordability: Local plans are generally less expensive than IPMI plans.
• Tailored to local needs: They are designed to meet the specific healthcare needs and expectations of the local population.
• Established provider networks: They often have well-developed networks of healthcare providers, which can result in lower costs.

Disadvantages:

• Limited coverage: Coverage is usually restricted to the country of residence, with limited or no out-of-country benefits.
• Lower benefit limits: Benefit limits for specific treatments and overall coverage are typically lower than those of IPMI plans.
• Exclusions for pre-existing conditions: Pre-existing conditions may be excluded from coverage, leaving individuals to pay for those expenses out of pocket.

What are the advantages and disadvantages of a typical international private medical insurance plan?

Advantages:

• Global coverage: IPMI plans provide coverage in multiple countries, ensuring access to quality healthcare wherever the insured travels or relocates.
• Comprehensive benefits: They offer higher benefit limits and cover a broader range of medical expenses, including evacuation, repatriation, and mental health services.
• Multilingual support: They often provide multilingual customer service and claims support, making it easier for expats to navigate the healthcare system in a foreign country.

Disadvantages:

• Higher cost: IPMI plans are typically more expensive than local plans.
• Potential for overlap with local coverage: In some countries, expats may be required to purchase local health insurance, leading to potential overlap in coverage.

How prevalent is the "localization" of expatriate employees?

Localization is the process of transitioning expats from expat contracts to local contracts, often resulting in changes to their benefits, including healthcare coverage. The prevalence of localization varies by country and industry. It has become more common in recent years as companies seek to reduce costs associated with expat packages.

What are the implications of local employment contracts and employee benefits for expatriate employees?

When expats transition to local contracts, they may face changes in benefits, including reduced coverage or eligibility for local health insurance plans. These plans may not meet the expat's healthcare needs, necessitating the purchase of top-up IPMI coverage to fill the gaps.

How do expat needs and expectations differ from "home country" senior and executive staff?

Expats often face unique challenges, including navigating healthcare systems in foreign languages and adjusting to different cultural norms. They may require additional support, such as multilingual assistance services and access to healthcare providers familiar with their specific needs. Senior and executive staff in their home countries may not face these same challenges.

What are the implications for providers offering top-up cover? What issues do providers face when offering "top-up" cover?

Implications:

• Top-up coverage is essential in filling the gaps left by local health insurance plans, especially in countries with mandatory local coverage.
• IPMI providers need to develop flexible top-up plans that complement local coverage and meet the specific needs of expats.

Issues:

• Assessing claims and apportioning liability: Coordinating claims between the local and international insurers can be challenging.
• Understanding local regulations and benefits: IPMI providers must navigate the complexities of local healthcare systems and regulations to ensure their top-up plans are compliant and meet expats' needs.

What role does "top-up" cover have in meeting local cover shortfalls?

Top-up cover plays a vital role in bridging the gap between the limited benefits offered by local plans and the more comprehensive coverage expats need. It ensures that expats have access to quality healthcare without facing significant out-of-pocket expenses.

Is there a difference between an offshore insurance company and an international insurance company?

While both offer international health insurance, the key difference lies in their licensing and regulation.

• International insurance companies typically operate in multiple countries and may have licenses in those countries.
• Offshore insurance companies are licensed in a jurisdiction outside the insured's country of residence.

The choice between the two depends on factors like the individual's needs, the insurer's reputation, and the specific regulations of the countries involved.

Conclusion:

This article underscores the complexities and nuances associated with providing healthcare coverage for expatriates. While both IPMI and local plans have their pros and cons, a well-informed approach, often involving a combination of both types of coverage, is essential to guarantee comprehensive healthcare protection for individuals living and working outside their home country.