If you are an expat looking for international health insurance that protects you when you’re living overseas, findings from the Cost of International Health Insurance Report 2016 recently released by leading insurance advisor Pacific Prime Singapore reveal how much you can expect to pay.
Based on the average cost of international private health insurance in 95 countries, the main findings are detailed in this article and include the average cost of health insurance for expats, standout countries, factors driving the cost of health insurance and future trends in international health insurance.
The average cost of health insurance for expats
The findings generated from Pacific Prime Singapore’s report reveal that the US continues to top global rankings as being the most expensive country for international private health insurance with an average cost of USD 17,335. This figure is 32% higher than Hong Kong, which came second on the rankings with an average cost of USD 11,780. The countries also ranked within the top 5 include China (ranked 3rd), Canada (ranked 4th), and Singapore (ranked 5th) with average costs of USD 5,780, USD 5,359, and USD 5,036 respectively.
Four regions have stood out in the rankings this year: Dubai, Canada, Japan, and South America.
In Dubai, the introduction of mandatory health insurance by the Dubai Health Authority has led to a drastic increase in the number of insured residents, including expats. This has led to a noticeable increase in private hospital visits and claims, boosting average costs of health insurance in the country.
Canada has jumped from 7th to 4th place in this year’s rankings, replacing Israel. The main reasons include the higher percentage of increased rates compared to 2015 as well as the emergence of plans with premiums that are grouped with the US.
Japan has also jumped up in rankings from 23rd in 2015 to 17th place in 2016. This is mainly due to a significant increase in one of their provider’s premiums, which brought the rates in line with other providers within Japan.
Three South American countries including Chile, Argentina, and Costa Rica have emerged in the top 20 this year. The reasons for the overall increase in this region include increasing regulations and the increasing cost of healthcare worldwide. Additionally, many South American countries experience a higher level of health insurance fraud. Another reason is increasing unrest in South America, which may have contributed to an increase in insurance plans purchased as a way to mitigate risk.
Primary factors driving the cost of international health insurance
This year’s report has found that there are four main factors driving the cost of international health insurance:
- Increased demand for quality private care – Many of the top ranked countries in the report are major expat destinations and in most of these destinations, demand is increasing for quality international care that is comparable to that of an expat’s home country. Also of interest is the increase in demand for quality healthcare from local populations who are becoming increasingly wealthy.
- Increased cost of healthcare – With an observable increase in spending on healthcare worldwide, the main reason behind premium inflation is the increasing cost of healthcare.
- Increased regulation – With increased regulation of health insurance, many countries are seeing an increase in premiums as well as the cost of plans, due to the new capital requirements that the insurers must meet in light of the new regulations.
- Rising health care fraud – According to a 2014 report by BDO, “Since 2008, global average fraud and error losses in healthcare have risen 25% from 5.59% of expenditure to 6.99% [in 2014].” One of the main methods that insurers are using to combat this is by raising premiums.
The future of international health insurance
The report has found that the difference between the cost of health insurance in the countries included in the report is decreasing when compared to the US. This is an interesting trend that will likely dictate the future of international health insurance. As such, Pacific Prime believes this trend will be driven by the following 3 factors.
An overall increase in private healthcare costs worldwide
Many of the higher ranked countries have seen rising costs in private hospitals over the past couple of years, making them on-par with, or even more expensive than facilities in the US. This has led to an inevitable increase in premiums especially in the higher ranked countries,
bringing them closer to the cost of insurance in the US.
Increasing number of quality healthcare in historically cheaper countries
Interestingly, countries like Turkey, Romania, and Mexico are making substantial investments in private healthcare with an eye on American and European clientele. As a result of the increased number of high quality yet relatively cheaper private healthcare facilities available outside of the US, many people have opted out of including the US in their international healthcare insurance coverage, this has subsequently led to health care providers in these countries increasing their prices.
Tighter ACA regulations in the US
As a result of the new Affordable Care Act (ACA) regulations introduced in the US, all citizens including most expats in the US must secure an ACA compliant health insurance plan. However, ACA plans differ from international insurance plans because most private international health insurers do not currently have ACA compliant plans. Therefore, residents in the US would have to purchase international health insurance on top of their ACA compliant health insurance if they are living abroad for an extended period.