Health Insurance - What pitfalls may await you, unless you look carrefully

Paul Wolf, IBC

 Let’s get one thing straight.....there’s no way this makes exciting reading.  But, one day, what you learn here and what you do about it could save your life or the life of a loved one!!!   So let’s get started...........

You really ought to be thinking about private health insurance if:

•   you’re not covered by group health insurance ;

•    you’re covered by a National Health System or some other Universal Health System;

• you’d like to have the option to have private care where you currently live; or

• you’d like to be able to go for treatment for a specific problem to another country

What are the basic features of private health insurance ?

These policies generally offer one or two major levels of coverage:

q       A comprehensive coverage, including in-hospital care and services as well as the services of doctors, lab tests, x-rays and other scans, etc. in a non-hospital setting; and

q       A basic coverage which is limited to all care and services relating to a inpatient hospital stay only.

 The common variables within these policies are various limits on reimbursement within the policy; a choice of deductibles; and any differences or limitations based on where the care is provided.        

 But beyond this, there are traps waiting for you unless you look carefully at what is offered.  So how do you decide what makes a policy right or better for your specific needs?  Let’s look at some of the things you should be aware of:

Applying for a Policy

Guaranteed-Issue Policies

It’s easy to get coverage with one of these policies - just answer a few easy questions and pay your premium.  Then, when you submit a claim, that’s when the problems can start !  You may be asked for proof that the problem you just had treated wasn’t a pre-existing condition at the time you applied for the policy. 

What’s a Pre-existing condition? 

Generally it means a medical condition, which is currently being (or was previously) treated and any condition associated with it.  Just for clarification:

�      ‘Treated ’ means:

1.      Doctor’s visits, tests, taking medication, or even a special diet for that condition within the past one year, two years, five years, or anytime in the past (each policy has its own time frame); and:

2.      A condition which a ‘prudent person’ would have had treated, even if you didn’t - or, in some policies, even if you didn't know about it but they feel you should have!

�      ‘Any condition associated with it’:  means a medical problem that they deem to be an outgrowth or result of the original pre-existing condition.  For example, a broken leg could be deemed to be the result of brittle bones caused by cancer treatments!

If the insurer decides it is a pre-existing condition, they may deny the claim.  Always remember, the larger the claim the more carefully they’re going to examine it!  Not what you want to go through when you have just incurred a claim for $10,000!  

    Fully-Underwritten Policies

These policies ask very detailed health questions on the application form and may even ask for doctors’ reports.  Based on all the information they get, the insurance company may decide to:

      1.      accept you with no exclusions or conditions;

      2.      accept you with an increase the premium;
3.      accept you with an exclusion for a specific medical condition; or
4.      reject you. 

 It always makes good sense to disclose pre-existing conditions on your application form even if the application  doesn't ask about them; then the insurance company will find it harder to deny a claim for a pre-existing condition if they didn’t exclude it when they approved your application.

Your Age

Some insurers automatically reduce benefits, charge extra premiums, or even discontinue your coverage when you reach a specific age; for example: at 60, 65, or 70, the maximum annual limit under the policy drops from $1 million to $100,000 or they may add 25% extra to the premium.  

Policy exclusions to be aware of:

�      Travel

Some policies exclude travel if it’s specifically to get medical care. Others exclude care if you travel ‘against the advice of a physician’ or ‘while you are on a waiting list for treatment’; in that case, treatment for that specific condition may not be covered while you’re travelling. 

�       Pregnancy and Childbirth

Some policies exclude pregnancy and childbirth completely while others exclude them only for the first 12 months of the policy.  Even if the pregnancy and birth are covered, some policies automatically exclude the first 15 days of a newborn’s life - while others cover only the first 14 days of life.  In these cases, the baby must then apply as a ‘separate person’.  Because many policies exclude birth defects, and congenital and hereditary illnesses, that baby may be refused coverage.  Such policies may not be appropriate if you’re in the childbearing years - take a long, hard look and ask questions before you sign up for such a policy.

�       Chronic illnesses

Some policies specifically exclude or limit the coverage of conditions which are or become chronic after you purchase the policy.  An asthma attack (acute) may be covered but not ongoing asthma problems (chronic). 

�       Limited Coverage

Some policies limit coverage for any single accident or illness to, for example, the first 12 months of treatment following the onset of that accident or illness.

�       Organ transplants

Some policies exclude such procedures; some offer it as an additional benefit, and some include it as a part of the regular coverage.

�       Where you are

     Some policies place no limitations on where you can go for care while others limit the region of the world where they will cover        you (and may charge different premiums based on the region(s) you select).

�       Home Country

Some policies limit the time you can spend in your ‘Home Country’ or even exclude it completely.  For example, travel to/in the U.S. may be limited to 30 or 60 days for U.S. citizens or anyone born there regardless of their current citizenship.  This could apply even if you go for a short visit and then, because of an illness or accident, need to stay longer.  The policy may be cancelled or suspended when you reach that maximum time limit, regardless of your health condition at the time.

Getting Claims Paid

�       Pre-certification

Many policies now require you to get prior approval for a planned hospitalization, with a penalty of reduced benefits if you don’t.  They may be more lenient with emergencies but still require notification as soon as possible after the emergency.  Some may also limit the choice of hospitals or doctors you can use.  Even if you don’t need pre-approval, informing an insurer before a hospitalization is a good idea since they can usually pay the hospital directly for your stay.

�       Non-hospital bills

In most cases, you must pay physicians, labs, etc. yourself and then submit those bills with proof of payment.

�       Submitting Claims

      Some policies require a completed claim form - others, just the original bill.  In almost all cases, you should get the bill in         English or supply an English translation - it tends to smooth the path to reimbursement.

�       Emergency Help

Almost all policies offer the services of an International Help Centre, 24 hours a day, seven days a week.  The Centre can refer you to an English-speaking doctor and/or hospital and/or assist in the event of an emergency requiring medical evacuation.  This is obviously more useful when you’re in a non English-speaking area, but you can use it wherever you are in the world.

�       Medical Evacuation

This is a useful feature if you’re in a country/region with a healthcare system which is below par.  But, be aware that no policy offers evacuation just because you would prefer it.  If the emergency can’t be treated locally, you will be evacuated to the nearest major facility capable of providing a decent standard of care.   The definition of ‘nearest’ and ‘decent’ are decided jointly by the Emergency Help Center and the insurance company.

Paying premiums

Premiums are normally payable for each person in a family, although some policies do offer a family premium. Others offer ‘free’ coverage to pre-teen dependent children if one parent is covered. Premiums may vary based on where you live or where you want to have treatment, and may increase with attained age.  Payment is usually by cheque or credit card and may offer a choice of currencies for premiums and reimbursements.

Renewing Coverage

Guaranteed renewability of an insurance policy is fundamental to the selection of that policy.  If there is no guarantee to renew coverage regardless of your health condition at the renewal date, beware!  Cancellation of coverage is not what you need if you have developed a medical condition which would be deemed pre-existing if you have to apply for another policy.

 This quick look at private health insurance should remind you, once again, that there are no bargains out there.  You should always use the services of an experienced international insurance consultant to assist you in selecting a policy.

 Paul Wolf is president of Innovative Benefits Consultants