International health insurance for expats set to get more costly

by Ray Clancy on October 19, 2015

Expats around the world are paying more for their health insurance as a number of governments increase Insurance Premium Tax.

The IPT, which is probably not even known to many expats, has increased by more than half in France to 14%, is 19% in Germany, 21% in Holland and will rise to 9.5% in the UK in November.

healthcareEUSome expats are lucky enough to have their international health insurance paid for by their employees, but many, including retirees on a fixed budget, have to fork out the monthly premiums themselves and it is getting more and more expensive.

But it is also complex. Some premiums are affected by the tax and others are not. Insurance companies may adjust their premiums to cover the increased cost but others are absorbing the extra cost and not passing it onto customers.

All this means that shopping around for health insurance has become even more important for those on a budget. There are already confusing different levels of coverage, sometimes called gold or premium by insurance firms, and this is set to get even more complex.

Some international insurance providers apply a global tax average on their international plans and for these firms their policyholders are likely to see an increase in their premiums.

Expats should not cut back, according to experts.

“It is surprising how dependent and childlike an intelligent person can be when unwell in an unfamiliar environment. So it’s important to choose cover that you can rely on when abroad,” said Colin Boxall, commercial director of employee benefits company ADVO.

In the United States expats can face paying up to US$11,000 a year for a family for health insurance and the choice is indeed complex. Some doctors will accept some policies but not others, for example.

In Europe where the European Health Insurance Card (EHIC) is available for immediate cover, people staying long term have to subscribe to the local healthcare system and take out top up insurance.

Many people think, for example, in France that the healthcare is free, but it is not and people living in the country habitually take out top up health insurance. If you visit a GP that might cost around €25 but only €22 of that is paid back, the rest is covered by top up insurance and this is the same throughout the system with only a proportion being paid back.

Also in Europe the effectiveness of the EHIC and limits are interpreted differently among the 31 member states, with generally emergency treatment being covered automatically so that if you break your leg you aren’t going to be asked for your credit card before being treated. But many conditions are not covered.

In some countries, top up health insurance is mandatory, such as Turkey and Qatar and in others, such as Germany, the premiums go up as you get older, reflecting the extra cost of care for the elderly.

Boxall believes that expats will get used to the higher premiums. Rather than cost, people and employers should take into account reliability and dependability, he added.

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