Private health insurance: How to choose the best policy and health insurer for you
If you're considering private health insurance, finding the right health insurance plan or health insurance company can be time consuming. This guide explains how to choose the right private health insurance for you.
Health insurance could be your economic lifesaver in an extreme health emergency. But finding the right medicare insurance can be a painstaking task, particularly once you enter the world of private health insurance.
The private health insurance industry is extremely competitve with numerous private health insurance companies offering a complex range of private health insurance plans and supplement insurances, varying conditions for coverage, and restrictions on who and what is approved, meaning you have to read the fine print to know what benefits – or pitfalls – you're getting into.
Alongside this, private health insurance companies offer a number of ways to reduce the cost of your private health insurace, such as co-payment schemes, paying a higher deductible on your healthcare bills, or packaging private health insurance plans or supplement insurances together.
What is private health insurance? This guide takes you through the policies and pitfalls of private health insurance and supplement insurances to help you choose the right private health insurance plan and the best private health insurance company for your situation.
Private health insurance: basic features
Private health insurance policies generally offer one or two major levels of coverage:
- there are private health insurance plans that provide comprehensive coverage, including in-hospital care plus the services of doctors, lab tests, x-rays and other scans in a non-hospital setting;
- a basic private health insurance coverage is typically limited to all care and services relating to an in-patient hospital stay only, not outpatient services.
The common variables within these policies are various limits on reimbursement, a choice of deductibles (how much you pay towards treatment), and where the care is provided. But beyond this, there may be some traps waiting for you unless you look carefully at what is offered. It's also important to understand how 'pre-existing' conditions are classified, which is explained below.
Applying for private health insurance
It's easy to get coverage from guaranteed-issue private health insurance plans – just answer a few easy questions and pay your premium. Beware though, when you submit a claim, you may be asked for proof that the problem you just treated wasn't a 'pre-existing condition' at the time you applied for the policy.
Pre-existing conditions included in private health insurance
A pre-existing condition generally means a medical condition, which is currently being (or was previously) treated and any condition associated with it.
'Treated' is clarified in several different ways:
- Doctor 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).
- 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 private health insurance companies decide it is a pre-existing condition, they may deny the claims. Always remember, the larger the cost the more carefully they're going to examine your private health insurance claim, which is not what you want when you have just incurred a claim for EUR 10,000.
Fully-underwritten private health insurance plans 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:
- Accept you with no exclusions or conditions
- Accept you with an increase the premium
- Accept you with an exclusion for a specific medical condition
- 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 private health insurance application.
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 may drop from EUR 1 million to EUR 100,000, or they may add 25 percent extra to the premium. If this is applicable now or within 10 years, you should calculate how age will affect your private health insurance costs or the continuation of being covered for life; some private health insurance companies specialise in plans for eldery people.
Private health insurance plans: Possible policy exclusions to watch for
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, so be sure to check your private health insurance policy.
Pregnancy and childbirth
Some policies exclude pregnancy and childbirth completely while others exclude them only for a set period, for example, the first nine or 12 months of the policy.
Even if 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, your baby may be refused coverage. Such policies may not be appropriate if you're in the childbearing years, so take a thorough look and ask questions before you choose one of these private health insurance plans.
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). Anyone will a pre-existing condition should undertake extra research to ensure their private health insurance covers them.
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.
Some policies exclude such procedures, some offer it as an additional benefit, and some include it as a part of the regular coverage. If this is important to you, ask private health insurance companies what their structure is.
Some private health insurance plans place no limitations on where you can go for healthcare while others limit the region of the world where they will cover you. Typically, private health insurance companies charge different premiums based on the region(s) you select; in particular, including the United States in your private health insurance plan will increase your premiums, due to the high cost of US healthcare.
Some policies limit the time you can spend in your home country or even exclude it completely. For example, travel to and in the US may be limited to 30 or 60 days for US citizens or anyone born there regardless of their current citizenship or residency.
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 private health insurance claims paid
Many private health insurance plans now require you to get prior approval for a planned hospitalisation, 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 policies also limit the choice of hospitals or doctors you can use. Even if you don't need pre-approval, informing an insurer before a hospitalisation is a good idea since they can confirm if your medical provider is approved and usually pay the hospital directly for your stay.
In most cases, you must pay physicians, laboratories, etc. out of pocket and then submit those bills with proof of payment to your private health insurance company.
Some private health insurance companies require a completed claim form, while others will just ask for the original bill. In almost all cases, you should get the bill in English or supply an English translation (or in whatever language your insurer operates) – it tends to smooth the path to reimbursement.
These points are also factors to consider when choosing your private health insurance plan, particularly whether the process for making a claim is easy, if it be done online or if your private insurance company offers services or support in your language.
Private health insurance in an emergency
Almost all private health insurance plans 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 or hospital and 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.
This is a typical feature or supplement of private health insurance that is often not available in state or local health insurances.
It can be particularly useful if you're in a country/region with a healthcare system which is below par. 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. But, be aware that no policy offers evacuation just because you would prefer it.
The definition of 'nearest' and 'decent' are decided jointly by the emergency help centre and the insurance company.
Cost of private health insurance
Private health insurance is normally payable for each person in a family, although some policies do offer a family premium at a lower price. Others offer free coverage to pre-teen dependent children if one parent is covered, which could be a deciding factor for families when choosing a private health insurance plan.
The cost of your private health insurance will typically be based on where you live or where you want to have treatment, and typically increases with age and pre-existing conditions. You may be offered a choice of currencies for premiums and reimbursements, which can be a beneficial feature for expats.
Renewing your private health insurance
Guaranteed renewability of a private health 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.
Supplement policies to private health insurance
When choosing your private health insurance, there will be a range of supplement insurances offered that allow you to create a private insurance package tailored to your individual situation. Below are explanations of some supplementary private health insurance.
Dental insurance is typically inexpensive, although it depends on how much you are willing to co-pay. A simple dental insurance plan, for example, can be as low as EUR 10 per month in return for free dental cleanings and checkups and discounted treatment costs. Dental insurance is typically offered as a supplement in private health insurance plans, although you can also take out dental insurance independent of any other coverage.
In some cases, 'vision insurance' is a term used to describe what is essentially a discount payment plan for eye care and eye wear. Vision insurance can significantly reduce the cost of your eye exams, prescription glasses and contact lenses, but doesn't necessarily cover medically necessary eye surgery, such as cataract surgery, which is often covered under private health insurance plans. Elective surgery, such as laser eye corrective surgery, isn't usually covered by vision insurance neither, but may be offered at a discount.
Accident insurance covers medical out-of-pocket expenses that result from accidental injuries, including emergency services, hospital stays, medical exams, transportation and lodging, filling in the gaps of certain costs that may not be covered by private health insurance.
Critical illness insurance
Critical illness insurance typically pays out a lump-sum benefit in the event you get diagnosed with a covered illnesses, for example, a heart attack, stroke or cancer. The lump-sum payment can be used to cover medical expenses, lost work time, childcare fees and travel expenses so you can focus on your recovery, and typically
Life insurance, also known as life assurance, provides your partner or family financial security in the event of a premature death, an insurance that can be useful when you have dependent family or large debts. Some life insurance policies have investment features that can provide advtangeous tax benefits, although more complex life insurance policies tend to be more expensive. You can find surprisingly cheap basic life insurance plans, for example, a healthy, 30-something, non-smoking male might find a 20-year term policy with a million euro death benefit for less than EUR 500 per year, with premiums going up 10–20 percent for added features or more complex plans, such as variable or whole life insurance policies.
Short-term health insurance
Some circumstances call for short-term health insurance, which is essentially temporary private health insurance. Short-term health insurance plans can be anywhere from 30 days to 12 months, depending on the insurer, and provide a useful way to cover health insurance gaps or if you have to quickly show proof of insurance.
Compared to other plans, short-term health insurance can have lower premiums and approval is typically easier and quicker, but they also might offer limited benefits, exclude pre-existing conditions, don't qualify for tax exemptions or are not guaranteed-issued.
Travel insurance falls into two broad categories: trip cancellations and travel medical insurance. Travel insurance for your trip typically covers costs associated with cancelled or changed flights, and there are many variations that include coverage for delayed or lost baggage, travel delay, rental cars, flight accidents, ID theft and so on. It does not necessarily cover medical expenses.
Travel medical insurance covers you in the event of an emergency accident or illness abroad, and can include emergency medical evacuation, accidental death and repriation. Travel insurance often includes a combination of both medical and trip coverage – covering both you and your possessions – although check your travel insurance policy to be sure.
Your local health insurance may not be recognised abroad, so taking out a travel insurance plan can cover you in such cases. If you have international health insurance, you will typically already be covered for medical treatment abroad, and some private health insurance plans cover emergency treatment abroad up to certain period (for example, one or three months). However, your belongings will not be insured, in which case you may consider travel insurance.
Private health insurance companies: Making the decision
Finding providers may be easy, but with the different options – sometimes small – offered between various private health insurance companies, how do you make the final choice?
"Many of our clients are aware from their own research, that there are more insurers than ever competing against each other. Therefore they come to us for advice and guidance," says Andrew Wilson, CEO of April Medibroker, an independent specialist broker advising expatriates on international medical or healthcare insurance.
"Expats should seek the advice of an independent broker, who is not tied to one provider and who has access to a large number of insurers, before signing up to any plan," Wilson says.
There are many things to consider when choosing from the many private health insurance companies, and perhaps the most revolutionary aspect of medicare insurance in the last 10 years is pre-existing medical conditions. In the past, pre-existing medical conditions have been excluded from cover, along with all related conditions.
Choosing the right area of cover is another important task. Generally with expat health insurance there are three areas of cover – Europe, Worldwide (excluding USA and Canada) and Worldwide. It is not just the country they are going to be living in that expatriates need to think about. What if they were to get a condition such as cancer?
Would they want to stay in unfamiliar territory, or would they want to return home to be treated, with loved ones and friends? Also what if the medical facilities in their new country leave a lot to be desired? They would need to make sure evacuation was included within a plan to get them to the nearest centre of excellence.
Many expats are now considering local plans in today's economic climate. However, a local plan means exactly that: local care, in a local language and usually restricted to a handful of hospitals where medical facilities may not be adequate or waiting times are long. An expat needs to think about where they would like treatment for more serious conditions, in which case private health insurance or international health insurance becomes relevant.
Should you stick with major private health insurance companies?
Not always, according to insurance broker Wilson, who observes that smaller private health insurance companies can sometimes be much better in their administration and customer service. They also have the ability to treat each customer as an individual rather than a number. As they are smaller, they can be quicker to pro-actively respond to the changing needs within the market place.
That said, larger private health insurance companies can be more widely recognised by medical institutions in some remote places, and may offer wider medical networks or complex online systems for making claims, finding specialists and booking appointments. Other companies will allow claims by email, when others need claim forms.
"There really is a lot to consider," Wilson says. "In the more than 15 years' experience we have gained, things are changing more than ever, and more quickly than ever before in the insurance market. That's when the expert advice and guidance of an experienced broker can help."
Click to go to the top of our guide to private health insurance.
Need advice? Post your question on Expatica's free Ask the Expert service to see if we can help.
Comment here on the article, or if you have a suggestion to improve this article, please click here.