Medical inflation is affected by claiming history, the cost of new technologies, and the medical landscape. And it always seems to be on the increase. Below are some of the reasons why.

Claiming history

When the world is in a recession, more people seem to claim. When times are good, many people don’t bother settling claims for minimal amounts for things like medicines or a trip to the general practitioner. But when times are lean, people claim for every expense they can.

And who can blame them? That is, after all, why you buy insurance.

Recession often also means redundancies, so employees on a company scheme often push through treatment if they think their job is at risk.

Medical evacuation

There are a variety of ways to medically evacuate people. It all depends on where the evacuation is taking place and the condition of the patient.

Most evacuations are carried out via commercial flights. This is only appropriate for medically stable and conscious patients who are able to breathe on their own. If the patient is evacuated in this way, it usually involves buying either an upper-class seat or a couple of extra coach seats.

Other types of evacuation are for patients who are medically unstable. The Lufthansa airline has intensive care units (ICU) aboard some regularly scheduled flights. This option is good if the patient is at a destination that Lufthansa serves.

The ICU units have state-of-the-art equipment, and the costs are controlled, because the flight is part of Lufthansa’s regular activity. However, it does mean the patient has to be at the right place at the right time, and the aircraft must be able to accommodate him or her, because the ICU takes up an area of coach seats.

Alison Massey, of specialist health insurance provider Now Health International, looks at recent developments in health and considers the importance of transparency from insurers in such a volatile landscape.

For those looking to further their careers, experience new cultures or gain a fresh perspective on the world, the expat lifestyle has many appeals. However, the benefits of being abroad go beyond emotional wellbeing, as was shown recently by the British medical establishment’s apparent acceptance that it has been pushing anti-sun exposure too far.

Britons have now been told by a range of medical organisations, including Cancer Research UK and the National Heart Forum, that ‘little and frequent’ sun exposure is good for them. Sunlight is, of course, the best source of vitamin D, which is thought to slow cell growth and spread. Around the Mediterranean, cases of prostate, colon and breast cancer are less common than in northern European countries.

But there is, of course, a great deal more to consider than the effects of the sun when it comes to expat health. When arranging your move abroad, extensive planning of the medical insurance needed is essential. What’s covered by the policy, and what isn’t?

One important point to keep in mind is the volatility of life away from home. Personal plans regarding location often change, and the medical landscape is anything but predictable. You need to be confident that the insurance covers the things you didn’t see coming.

By way of a recent example, the deadly cholera outbreak in Haiti marks what medical director at Bupa International Dr Sneh Khemka calls “a new era in modern medicine – the war on re-emerging diseases”. With the growth of cities, globalisation of world commerce and increase in air travel, he says, “Health professionals are fighting a constant battle to keep the spread of big killers at bay.” Particularly in developing economies, diseases such as tuberculosis, cholera, polio and dengue fever are “back and on the rise.”

The advice from Dr Khemka is that, as well as ensuring they’ve had the necessary vaccinations before moving to another country and giving their children the right childhood immunisations at the right ages, expatriates should familiarise themselves with the local healthcare system. How do they access care in an emergency? Are they insured by an organisation with good local knowledge?

Evacuation cover, a possibly dubious expense in developed countries with decent medical services, is critical in underdeveloped, high-risk places, particularly when disaster strikes, as in Haiti. Even if expats can afford the bills for a medical evacuation – which can exceed £50,000 before treatment even begins – they certainly won’t know how to negotiate their way to instant treatment at the right hospital. As medical journalist Peter Pallot puts it, “The ability to call in medical assistance specialists, contracted to insurers, saves lives. Swift intervention, that is not available locally, avoids or minimises long-term damage to health.”

It’s also important to find out exactly what constitutes an emergency to the insurer, and what evacuation would mean for the expat’s dependants. Portability – cover that can be continued in another country without re-underwriting – requires similar consideration. Will cover endure if the expat moves?

In such a complex, transient world, it’s absolutely imperative, when planning to move abroad, that you choose a health insurance company which is completely transparent about what is and isn’t covered, and at what cost. You shouldn’t have to sift through reams of small print to find out where you stand. The insurer should also demonstrate local knowledge and an understanding of the ever-shifting sphere. From that comes peace of mind, which means you can focus on the benefits of the expat life, relax a little, and perhaps soak up a few rays. As we now know, sunlight, like most things, is great in moderation.

Now Health International is strategically placed to serve the main expat hubs and global emerging markets, having offices in Hong Kong, Dubai and the UK.

For more information, see www.now-health.com

April Medibroker’s business development manager, Paul Bolam, explains how growing medical costs affect international health insurance premiums.

We have all heard of inflation; basically, it is the increase in the cost of goods and services this year compared with last year.

Many governments issue a monthly inflation index, which tells us how much the cost of living has increased over the last 12 months. Healthcare also suffers from inflation, commonly known as medical inflation.

What is medical inflation? Why is it different from standard inflation, and what causes it?

We are getting older, and need more medical treatment the older we become. We are also living longer, so the medical treatment we need has to continue longer. Medicine has made huge advances in the last few years; we are not dying from conditions as we used to, so we need medical care to treat them. For example, more people survive a heart attack than ever before, and cancer is now being treated, unlike ten to 15 years ago, when a diagnosis of cancer might have been a death sentence.

The advancement of medical research must be paid for: drug companies and medical supply companies spend a fortune in developing new drugs and medical equipment. They do not pay for this development – funding comes from government grants, insurance company funding, and the charge when selling the drugs and equipment.

Throughout the world, new hospitals are being built. The cost of accommodation and nursing also is reflected in the charges made by hospitals; they are, after all, businesses, and want to make a profit at year end.

Doctors, however, control the cost of treatment; they decide what treatment to recommend, and they want to be thorough. Tests can include blood tests, X rays, CT and MRI scans, ECGs, echo scans – the list is endless. Surgical procedures are also more complex, or, in some cases, less complex (for example, keyhole surgery) but the equipment used costs more to manufacture. Less-invasive techniques, such as colonoscopy or gastroscopy, assist in the diagnosis of conditions which, previously, would have involved surgery but still involve using expensive equipment.

Who pays for all these costs?

Mostly, we do, if we pay for treatment ourselves, or if we have expat medical insurance.

International medical insurance companies usually do not specify the hospital or doctor you may use. There are so many across the world that it is not possible to dictate a specific hospital or doctor in a particular country. In the USA, insurers use networks which have specified hospitals and doctors who have agreed to charge set fees. It is not like this in the rest of the world.

An international health insurance company will contact a hospital when a patient requires inpatient treatment, and arranges for bills to be sent directly to them. When a bill arrives, the international medical insurance provider will assess the costs and may query the charges. International health insurance companies know how much a procedure costs and what a hospital will charge. They will challenge bills that they consider to be too high, but, at the end of the day, the invoice has to be paid.

All these increased costs are assessed by international medical insurance companies when they review their premiums, which usually end up being higher than last year.

How do you know what is best for you?

First of all, speak to a specialist international medical insurance broker, who knows which of the plans they have available will suit you. International health insurance providers have different ways of developing and charging premiums – it is a complex issue. Each insurer publishes premiums rates, and, as I said earlier, the premiums reflect our age.

The older we are, the higher the premiums. The younger we are, usually, the lower the premium. Once 50–55 is reached, things start to change. Some international medical insurance companies start to increase premiums at this age, so, by the time you retire, international health insurance may be the highest monthly or annual cost you pay.

Once you are insured and you have claimed for treatment (after all, that is what international medical insurance is for), you may have little choice but to stay with the same insurance company, otherwise your condition may not be covered by a new international medical insurance company, so you will want to ensure that your future premiums are manageable.

Some international health insurance companies, such as InterGlobal, offer a no-claims discount, so if you have not claimed on your plan in the previous policy year, they will give you a discount of, usually, 10% of your renewal premium. Taking this into account along with any excess you have chosen, you need to assess whether a small claim is financially necessary. You may find that a small claim will cost you more than the value of the treatment.

IMG Europe will give 15% no-claims discount on your renewal premium, but it is not automatic. You have to claim it, and the premiums offered at renewal are not the same as in the first year. They are usually higher, so the no-claims discount can be very important when your renewal offer is made. This will also need to be considered when making a small claim.

IHI Bupa does not increase premiums for your age once you reach 60, but they will still increase premiums for medical inflation. If you apply for a new plan over the age of 60, they will apply a premium loading. We have found that this is still competitive compared with other insurers in the long term.

Nordic Healthcare does not increase premiums as you get older, and they have historically only increased premiums by 5% per year to cover increasing medical costs. The premiums may be higher in the first few years, but, overall, there may be significant savings compared with other plans.

Moving to live in a new country is about enriching your life and fulfilling your potential. However, the single biggest cost you could face abroad is healthcare – whether the incidental doctors’ visits and the medication they prescribe or the unexpected events that can result in a long hospital stay and a huge bill.

At April Medibroker, we have many years’ experience of providing international private insurance solutions to expatriates from our extensive database of the international providers/insurers, enabling customers to make an informed selection of medical insurers to suit their needs.

Paul Bolam, of international medical insurance broker April Medibroker, illustrates the importance of having the right health insurance policy in place before you move abroad.

Moving to live in a new country is about enriching your life and fulfilling your potential.

However, the single biggest cost you could face abroad is healthcare - whether the incidental doctors' visits and the medication they prescribe, or the unexpected events that can result in a long hospital stay - and a huge bill.

When moving to another country, it is absolutely essential that you have not only medical insurance but the correct kind of medical insurance.

Medical insurance request case study

We were recently contacted by a gentleman looking for medical insurance to cover his sister-in-law in the USA. The wording of the request, though, did appear to suggest that not only did she require treatment but she was, in fact, already in hospital.

When we contacted the gentleman for further information, he told us a sadly familiar story. His sister-in-law had purchased some medical insurance, but opted for the cheapest-possible cover. As it turns out, it was a plan that covered emergency events, and the stabilisation of emergency situations, only. When she was rushed into hospital several days after arriving in the US, she did have the initial emergency stabilisation covered.

However, that's where the cover ended. His sister-in-law was now still in need of treatment, and was attached to medical equipment, but with no insurance for the necessary followup treatment. The hospital would not begin the treatment until they were provided with a 'premium insurance' plan to cover the cost.

The gentleman was now desperately trying to find a medical insurance plan to cover this. Unfortunately, it was too late. No medical plans would be prepared to cover this treatment, as it was effectively now a pre-existing condition. However, if she had bought an international private medical insurance plan before travelling, her treatment would have been covered without any problems.

This is a desperately sad situation for this lady and her family, but it just goes to show why having the correct medical cover is essential. There is no point being wise after the event: it's too late then, so be wise before the event.

When it comes to expatriate healthcare insurance, less definitely isn't more; medical problems abroad can result in hefty bills.

For further information, go to www.medibroker.com

Over a third of Britons are risking their health by putting off essential medical checks, according to the results of a new survey commissioned by HSF Health Plan and conducted by YouGov.

The survey found that 38% of UK residents are putting off medical checks, such as the dentist or optician, because of the cost. Many more women than men are delaying finding out if they need treatment or not (43% of women compared to 32% of men).

Stephen Duff, deputy chief executive of HSF Health Plan, says that this is a false economy, and that delaying essential treatment usually means more cost, pain and damage in the long run. "Putting off visits to the dentist or optician increases your chances of preventable diseases, like mouth cancer and glaucoma, not being discovered until it's too late. Many conditions unrelated to your mouth and eyes are detected by dentists and opticians in routine checks. Discovered early, these illnesses are usually simply treated, but, if left undetected too long, they can become life-threatening problems. For example, NHS Choices says that two out of every 100 people over 40 are affected by glaucoma, and Mouth Cancer UK says that mouth cancer kills one person every three hours in the UK because of its late detection."

David Wright, chief executive of the International Glaucoma Association, says, "It is not just sight and eye conditions, such as glaucoma and defective vision, that can be picked up by the optometrist; other health issues can also be detected, such as high blood pressure, multiple sclerosis, brain tumours, blood clots and diabetes, so it is extremely important to not put checks off."

Putting off dental checks, says HSF Health Plan, can delay the detection of serious conditions like osteoporosis, oral cancer, acromegaly (pituitary gland tumour), leukaemia, Hodgkin's Disease and diabetes.

HSF Health Plan provides a special combined optical and dental option, providing contributors with an annual pot of money that can be used flexibly, depending on their needs, on either optical or dental care, privately or paying costs that the NHS does not cover.

Visit hsf.co.uk for more information.

International health insurance provider MediCare International has some advice for assignees and their managers on how to recognise, and deal with, these two potentially serious diseases.

Most people have had chickenpox – usually when they are children. Sometimes, children are deliberately exposed to it, the main reason being that it is thought preferable to have chickenpox early in life so as to build immunity to the infection. It is considered to be less painful when you go through the infection at a young age, and there is usually little or no damage to longer-term health, whereas, for example, men who are exposed to chickenpox later in life can suffer from reduced fertility.

After you have had chickenpox, the varicella zoster virus remains in nerve cells in your spinal cord for life. Normally, the virus lies dormant and doesn't cause any problems, but if your immune system, which normally protects your body against infection, is weakened, the virus can become active again. If this happens, it causes shingles. Shingles can be very painful and dangerous, particular if the rash occurs near an eye.