ARTICLES TO HELP YOU UNDERSTAND INTERNATIONAL HEALTH INSURANCE
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UNDERSTANDING RISING INSURANCE COSTS |
WHAT DOES IT COST TO BE UNINSURED?
THE DIFFERENCE BETWEEN GAMBLING AND INSURANCE
GOOD HEALTH IS MORE IMPORTANT THAN GOOD HEALTH INSURANCE
WHAT DOES IT COST TO BE UNINSURED?
One study concluded that the uninsured are three times likelier to die earlier than those insured. The study, by the Center for Health Policy at Georgetown University, involved 592,598 hospitalized people nationwide in 1987. It concluded, ". . . in 13 of 16 patient groups matched for age, sex, and race, researchers found the uninsured were sicker when they arrived at the hospital, as evidenced by their 44 percent to 124 percent greater likelihood of dying at that time."
Even more startling was the finding that the uninsured were ". . . 29 percent to 75 percent less likely to undergo each of five medical procedures that were costly or that allowed a wide degree of discretion in deciding whether they were needed." Doctors and hospitals hesitate to perform expensive tests or procedures if the patient can't pay.
It is definitely "healthy"' to have health insurance. No one wants to find himself or herself in a hospital unable to receive the treatment necessary because they do not have an insurance policy or because their current policy has numerous exclusions.
"Well, it's not important. I'm healthy (never been sick), my wife is healthy and also my children. Insurance is a rip-off, a waste of money! I don't really need it!" If you were 100 percent sure you or your family will never get sick or injured tomorrow, next week or next month, it would be a rip off. Are you 100 percent sure? Do you know the future? If you are 100 percent sure that you will never get sick, you should "never" get insurance!
Unfortunately, no one is brilliant enough to see what tomorrow holds. But you say, "I will take my chances." Okay, but if you or your family gets ill or is injured, who will pay for it? Do you have $50,000 or $100,000 set aside for such emergencies? It could take $25,000 just to med-evac an injured family member to your home country. And what if the care was life long? What if a family member developed Crone's disease or diabetes, etc.? Now you need tens of thousands of dollars for life-long care.
I have a friend in Phoenix who, as a young college student, made a simple jump from a hillside and broke his back. He has been in tremendous pain for years. His medications are now costing him $2,000 a month. (By the way, he strongly believes in insurance.) Now, if you don't have money set aside for medical expenses, you will have to turn to your friends and family, or to your donor base if you are a volunteer worker. How will they feel? Will they consider you a good steward? And will they be able to finance your medical needs for years to come? Won't their charity eventually be exhausted? These are all very real questions of real situations that happen every day. The very existence of insurance companies is proof that insurance is meeting very real needs. It is important that all of us, especially overseas workers, have good health insurance.
THE DIFFERENCE BETWEEN GAMBLING AND INSURANCE
Risk is the possibility (uncertainty) that a loss might occur, and it is the reason people buy insurance. Some people think the risk you take with insurance is the same as the risk involved with gambling.
The risk in gambling is "speculative" risk. Gambling creates a risk situation that offers an opportunity for gain as well as for loss. Insurance deals with "pure" risk. With pure risk there is the possibility that a certain event will occur, e.g., accident or sickness.
What is the difference between insurance and gambling? The purpose of insurance is to restore the insured to his original position, not to afford the injured person the possibility of making a profit. There might be gain in gambling. In insurance there is no possibility of gain.
GOOD HEALTH IS MORE IMPORTANT THAN GOOD HEALTH INSURANCE
I've always tried following a healthy life-style, but on January 1, 1998, I made a serious resolution to really focus on my health for that year. What did I do? I lost some weight, became consistent in my exercise program, started taking some anti-oxidants, got a complete medical and dental check-up, started learning a bit about naturopathic medicine and organically grown foods, applied for a better health insurance policy, and took out Long Term Care insurance.
Our most valuable asset is our health, and we are the real experts on our body. There are many things we can do to improve this "temple" that we live in. We all know that smoking, drugs, drinking, and over-eating are detrimental to good health. Why not give ourselves a Christmas gift every day by dealing with those problems.
On the positive side we know that exercise is a plus. Many books and articles tell us that taking anti-oxidants is helpful. Since childhood we have had the importance of a balanced diet drilled into our heads. What about alternative medicine? Dr. Andrew Weil of the University of Arizona publishes a regular bulletin called “Self-Healing.” Interested in how to subscribe? Write me. Then there is the matter of natural foods grown organically. In many places our fruits and vegetables are permeated with insecticides, etc. I know that in Indonesia, where I worked for over 30 years, chemicals that were banned in the USA were readily available for all farmers to use.
Health insurance is certainly important to have, but good health is even more important. Start today getting your body healthy by focusing on healthy living for the rest of your life.
DEDUCTIBLE IS NOT A DIRTY WORD
INSURANCE WAIVERS/RIDERS, RATE-UPS, & CAPPED COVERAGES
WHAT’S A “RIDER”? WHAT’S A “WAIVER”?
WHAT’S A “PRE-EXISTING CONDITION”?
WHAT IS CO-INSURANCE?
EXCLUSIONS
WEIGHT, WEIGHT CHARTS AND HEALTH INSURANCE
AGE AND INSURANCE PREMIUMS
UNDERWRITING - WHAT IS IT?
TRIP OR HEALTH INSURANCE -- WHAT'S THE DIFFERENCE?
AMERICAN PPOs & HMOs - WHAT'S THE DIFFERENCE?
HMOs (Health Maintenance Organizations) and PPOs (Preferred Provider Organizations), to say the least, are not the best of friends! One thing HMOs do in their marketing is to claim that they have "no deductibles." Of course this is a slam at PPOs that have deductibles. Yet HMOs don't mention that if a client goes into the hospital on many of their policies there is a co-pay of $250 or $500. This large co-pay in some ways is similar to and often larger than some deductibles.
Also, most people don't realize that even though you may have a $500 deductible with a PPO you still have small co-pays if you visit a doctor. Generally, the doctor's office visit, lab work, and x-rays are all covered with just the co-pay with no extra charge to the insured. This is very similar to how HMOs work.
So, when does the deductible kick in? Usually for outpatient surgery, emergency room, and in- hospital stays.
"Deductible" is not a dirty word. In many ways it is just a variation of a large co-pay.
Most international policies are "classical" PPOs, and, according to my knowledge, none have co-pays. They could all be classed as “traditional” insurance; that is insurance that works from a deductible, co-insurance, and then total coverage.
INSURANCE WAIVERS/RIDERS, RATE-UPS, & CAPPED COVERAGES
Not one of us likes a "waiver” or “rider" on our health insurance coverage. A waiver/rider is an insurance company's method of excluding certain pre-existing conditions from coverage. For example, you have had surgery on a knee due to a soccer injury. The company places a rider on the knee, which means a recurring problem to that knee will not be covered.
What about a "rate-up"? Some companies will "rate-up" the amount of premium charged for the policy instead of using a rider, but this is not a general practice with international insurance companies.
The other method of covering pre-existing conditions is "capped coverage." In this situation the company does not cover the pre-existing condition for the first 24 months, and then limits coverage for the condition to $5,000 a year for the next ten years. This is better than no coverage on a pre-existing condition.
The best option is to accept a "temporary" rider. Often a company will remove a rider after 24 months if you have had no recurring problems with the pre-existing condition. Overall, a rider is preferable to capped coverage if there is a possibility the rider can be lifted at a later date.
WHAT’S A “RIDER”? WHAT’S A “WAIVER”?
These are terms insurance companies use to explain special exceptions to coverage in their insurance plans. For example, you may have injured your knee playing tennis and needed some minor surgery. Six months later you applied for insurance. On the application you mentioned your knee surgery. The underwriters at the insurance company decided that since the surgery was recent there was a notable risk of recurrence. Otherwise you were healthy, and they wanted to offer insurance, but they felt they could possibly lose money due to your knee problem. What do they do? They put a “rider” (“waiver”) on the knee, which simply means they will insure you but waive covering anything that happens to the knee. In other words they will insure your whole body except your knee. They will exclude covering anything that happens to the knee.
Sometimes these “riders/waivers” are permanent. Other times the company will issue a two-year, three-year or five-year rider. If the condition does not deteriorate or recur over a period of time, often they will “lift” the rider and give you full coverage. The option of using “riders” is good for the insurance companies and for the general public because it enables the companies to insure people whom they would otherwise decline to cover.
When purchasing insurance read the fine print relating to "Pre-Existing Conditions." This may determine whether or not the insurance will meet your needs.
Each company has their own definition of a pre-existing condition. Here is the definition of "Pre-Existing Conditions" taken from a policy that gives medical coverage for foreign nationals visiting the USA:
A pre-existing condition is defined as an injury or illness which was contracted or which first manifested itself; or for which manifestations of symptoms would have caused a prudent person to seek medical advice or treatment; or for which a licensed physician was consulted; or for which treatment or medication was prescribed within the five years prior to the effective date of the insured person's coverage."
The following is a “Pre-Existing Conditions” definition for a domestic policy offered in the USA:
Any injury or sickness, or any complications there from which is present or manifest itself, or for which medical care, treatment, advice or consultation was rendered to a Covered Person with the 12 months period prior to the Effective Date of Coverage. Any injury or sickness shall be considered to be present or manifest if the condition or symptoms exist prior to the Effective Date of coverage, even though no diagnosis, care or treatment were sought or received.
Different companies put a time limit on what is considered a pre-existing condition. The first company above gives a five-year look-back as the time span for determining a pre-existing condition. Among the various policies we handle the following time limits are given: 6 months, 12 months, 24 months, 5 years, 24 months, 60 months, etc.
Having pre-existing conditions does not mean that your insurance rates will be higher. But, if the pre-existing conditions fits into a company’s definition for such, it may mean that those conditions will not be covered by your insurance.
Before you buy insurance get information on the "Pre-Existing Condition” clause. Otherwise, you may think some medical problem will be taken care of even though it is clearly excluded from coverage because it is a pre-existing condition.
WHAT’S A “PRE-EXISTING CONDITION”?
Technically, any medical condition that you have had prior to your application for health insurance with a given company can be considered a pre-existing condition. If you have been to a doctor about a sore elbow, even though it was four years ago and even though you received no treatment whatsoever, an insurance company could consider that a pre-existing condition.
Maybe you never went to a doctor, but had been aware for some time of a pain in your elbow. It didn’t bother you continually, but every once in a while you took an aspirin to alleviate the pain. The pain in the elbow could also be considered a pre-existing condition.
Insurance companies vary on coverage for pre-existing conditions. Some will cover pre-existing conditions that were treated three years ago, others four years ago, still some even five years ago. You can generally find a statement about how an insurance company will handle a pre-existing condition by going to the “Exclusion” page in the insurance brochure.
WHAT IS CO-INSURANCE?
Co-insurance generally relates to insurance companies that work through Preferred Provider Organizations (PPOs) that are networks of doctors that have contracted with insurance companies to provide health care at reduced costs.
How does co-insurance work? After you meet your deductible, the co-insurance factor kicks in. If your co-insurance is listed as 80/20 (80%/20%) to $5,000, you will pay 20% of the medical costs up to $5,000 after you have paid the deductible. That extra 20% would be $1,000. The insurance company will pay the other 80%, which would be $4,000. The company then would pay all costs beyond $5,000.
There are many formulas for co-insurance, e.g., 90%/10%, 70%/30%, 60%/40%, 50%/50%, but 80%/20% is the most common. There is also co-insurance that goes to $10,000, which means if your plan was 80/20, then you would pay $2,000 after the deductible.
Of course, as your percentage of the co-insurance goes higher, the monthly premium you pay will decrease. This is true of the deductible too. The higher the deductible, the lower the premium. The function of co-insurance is to keep those few people who might misuse their insurance from doing so, and thus keep the rates lower for the rest of us.
EXCLUSIONS
Most of us, when we look at an insurance policy, ask, "What is covered?" That's a good question. Another good question is, "What is excluded from coverage?" Sometimes by studying the “Exclusion” section you will quickly determine that the policy will not work for you.
I have listed a few of the 34 items on one company’s “Exclusion” list that say a lot about the policy: Pre-existing conditions; dental examinations; expenses of normal pregnancy; care of a new born child; treatment of acne; treatment for mental, nervous or emotional conditions or sickness; and treatment of Substance Abuse.
Often the "Exclusion” list is printed in such a way (small print, no paragraphs, etc.) that it is not easily read. Yet it is important that you check it out. Remember the old insurance adage: “The large print giveth and the small print taketh away.” The originator of the adage must have been thinking about the “Exclusion” list.
Often a person will take for granted that a condition is covered, only to find out that the condition was specifically excluded in the "Exclusion” list.
WEIGHT, WEIGHT CHARTS AND HEALTH INSURANCE
As insurance brokers, the first thing we do after asking a person for their age, is to ask for their weight. Most of us don’t enjoy divulging that information, but in order to suggest an insurance plan for you, it is absolutely necessary.
Insurance companies know that a person’s weight has a great bearing on their overall health. Therefore, they have all generated “Weight Charts.” The charts are similar but not identical. According to the chart of one company you might be considered uninsurable, whereas another company would consider your weight within their guidelines. So don’t be discouraged if one company declines you for coverage due to weight--just contact another company.
Sometimes companies will not give weight charts to brokers, therefore, in some cases we can only guess if the company will consider you overweight. And by the way, they also have minimal weight guidelines. You can actually be declined if you are underweight.
A few companies will accept you for coverage if you are overweight, but they will rate up your premium by 15 or 20 percent. That is certainly better than being declined coverage. What happens if you lose weight? If you have a doctor’s report that you have lost weight, you may be able to get the company to discontinue the rate up on your premium after you have been on the plan for a year.
Sometimes if your weight is still acceptable, but you have high blood pressure and cholesterol problems, you will still be declined. The correlation between weight and certain diseases may make an insurance company cautious about offering coverage.
The good news is that we have some three-year plans that are “guarantee issue” plans and never ask concerning your weight. If you feel you may be overweight for health insurance coverage, contact us, and we will help you sort through the weight charts and options for health insurance coverage.
AGE AND INSURANCE PREMIUMS
Often we receive requests for a health insurance quote with no age given. It is not possible to give a quote without knowing a person's age. Why is age so important? Because your medical needs vary depending on your age. For example, women ages 22-40 will be charged a higher premium because these are childbearing years. Young men in their twenties will pay lower premiums because they tend to demand less medical care. Men over 55 will begin paying higher premiums than women of the same age because of men’s tendency toward high blood pressure, stroke, etc. Insurance companies have done very detailed studies over the years, and know which ages will demand more medical care. They adjust the premium charged to make sure they do not lose money on any age group.
Some insurance companies increase the rates they charge each year you advance in age. Others only increase rates every five years or ten years. For example, one company breaks down the various age levels as follows: 14 days-18 years, 19-29, 30-39, 40-44, 45-49, 50-54, 55-59, 60-64, 65-69, 70-74.
As long as you get your application in and ask for an effective date, even a day before your birthday, you will get the rate for your requested age. Thus if a person is turning 60 on January 1, and he get his application in and asks for a Dec. 31 effective date, he will get the rates for a 55-59 year old. According to one of my plans, that would save a person who is 59 years old approximately $1,200.
UNDERWRITING - WHAT IS IT?
Underwriting is no more than a process to determine if you are an insurable risk. The people who do the research and make the decisions about your insurability are called underwriters. In a sense all of us do underwriting every day, for it is no more than an evaluation of risk. Every time you cross a street, you underwrite the situation first by determining if you can get across without being struck by a car. In other words, you determine if there is any risk involved.
Insurance is a business with a bottom line. When a person applies for insurance, and has a medical condition, i.e., bone cancer in his left foot that the medical profession has been treating for ten years at a cost of $3,000 a month, will an insurance company insure him with a premium of $100? The underwriter will look at the records, and if good reason indicates that medical treatment will continue at $3,000 a month, the insurance company would be foolish to insure the individual. By so doing they would lose at least $35,000 a year. If they insured many cases like that, they would go bankrupt or have sky-high premiums.
As a rule the companies with the tightest underwriting guidelines have the best rates and are the best companies to insure you. Because they are careful who they insure, they will remain stable and be able to keep their rates lower than average.
The underwriter has one task--to determine risk, to determine what possible financial outlay may be necessary to care for a person's medical condition. If they calculate the possible outlay as excessive, the applicant is declined medical coverage. You wouldn't insure a burning building; likewise, underwriters make sure that their companies do not insure us if it is certain that we have a medical condition that might cause the company to lose money.
When they do insure us, and we then develop medical problems, they are required by law to cover our expenses. But the underwriters made a decision before the medical condition arose (or with the knowledge of a present medical condition), that we were an insurable risk.
"Short-term Health Insurance" can be very similar to "Trip Insurance." Here is the main difference: "Trip Insurance" focuses on insuring the cost of your trip, e.g. airline tickets, hotel reservations, etc. It may include minimal health insurance and medical evacuation coverage, but first and foremost the goal is to make sure you are reimbursed money you will lose if your trip is cancelled.
"Short-term Health Insurance" focuses on insuring you in case of illness or injury. It usually has good medical evacuation coverage and maximum medical coverage up to $1,000,000. Sometimes Short-term Health Insurance also includes minimal trip cancellation coverage, lost baggage coverage, etc. If you want to see a "Trip Insurance" policy, please go to <www.onlinetripinsurance.com>.
In an HMO (Health Management Organization) you must choose a PCP (Primary
Care Physician). This physician will be your "Care Manager" in the health care system. Your PCP, if he finds it necessary, will generally refer you to a specialist working within the HMO. He directs all of your medical care, making sure you don't receive unnecessary services. Sometimes the PCP is referred to as the "Gate Keeper" because he opens the gate and directs you to other providers within your HMO system.
A PPO (Preferred Provider Organization) is a network of medical and health care providers who agree to provide services for a specific amount and adhere to medical utilization guidelines. In a PPO you do not have a Primary Care Physician (although you may choose to have a physician function in that way). Instead you are given a list of physicians that work within a network. You can choose any physician you like and a different physician every time you have a medical need as long as you choose them from the list of doctors provided by the PPO, that is, as long as the physician is in the PPO network. Some PPOs have thousands of physicians in their network.
Some people feel HMOs are better than PPOs because they generally hold down the cost of premiums. They do this because the physician controls the extent of the care given. Others feel PPOs are better because the patient has more freedom and say in the choice of physicians and treatment.
HIPAA / PORTABILITY INSURANCE
Several years ago the Federal Government in the USA passed the Kennedy/Kassenbaum Law. This law required insurance companies to offer health insurance coverage to US Citizens that met several conditions. If the individual had been on group health insurance for 18 months, did not have a gap of more than 63 days in coverage between the end of his group coverage and his application for HIPPA coverage, insurance companies were required to offer him coverage.
This is a wonderful benefit for a person who has major health problems and would not otherwise be insurable. Without this option many Americans would not be able to get insurance at all.
But there are a few caveats. The companies that offered HIPAA (Health Insurance Portability and Accountability Act) were allowed to rate up the HIPAA plans by 400 percent compared to their regular plans. Also, if the person had not been on group insurance, they did not have to offer coverage.
We have found that sometimes insurance companies will offer the HIPAA coverage even if the person has not been on group coverage. We have also found that international health insurance companies will provide COIs (Certificates of Insurance) explaining the dates a person started and discontinued group or individual insurance. We have found that individuals seeking to go on HIPAA coverage have had little difficulty apart from the rates.
I should also mention that companies seldom rate up their plans by 400 percent. Usually the increase is about 200 percent over standard plans.
Always get a “Certificate of Insurance” when you discontinue a job or lose your insurance. And make sure you apply for further coverage right away. If you exceed the 63-day window, they can refuse you coverage.