The difference between international private medical insurance and travel insurance
For many people, getting the opportunity to work abroad on assignment is exciting news. But they and their employers face a large to-do list in preparation for such a big change. One of the many pre-trip decisions to be made is what type of insurance expats will need — and health care is one of the most important issues.
If you have workers who will be living abroad, they’ll need a more comprehensive range of health benefits to cover ongoing and preventative care – as well as emergency cover — than if they were simply travelling for a few months. You also need to consider whether the country where they’ll be living does or doesn’t have a public or state-run scheme (such as the UK’s NHS) that they can rely on for most of their health needs.
For the globally mobile and the people who manage their assignments, it can be easy to confuse travel insurance with international private medical insurance (IPMI). Let’s take a look at how they differ.
Travel insurance or IPMI?
Broadly, travel insurance is for people who are away from home for short periods — usually six months or less. It generally covers things such as lost luggage, flight cancellations, emergency needs and possibly short-term medical treatment.
IPMI is more comprehensive when it comes to health care and usually includes medical emergency cover, doctor visits, maternity care and treatment of chronic conditions. It can also cover non-medical costs such as transportation to receive treatment or repatriation.
Here are some of the considerations to keep in mind when deciding whether to purchase travel insurance or IPMI.
Living or visiting?
Some countries require IPMI before issuing residence visas. In Switzerland, UAE and Australia, for example, expats need a tailored plan that ensures they’re covered for local mandated benefits in order to obtain a visa or residency permit. Travel insurance doesn't meet those regional regulations – so if your employee will be moving abroad, it’s essential to check this before applying for visas.
Length of stay
Travel insurance is only available for up to six months, and as such, it isn't sufficient to cover all the health care needs of people on ‘secondment’ (temporary assignments that usually last longer than six months). The indefinite or longer stay means that travel insurance won’t be sufficient.
The initial cost of travel insurance is usually less than IPMI because it covers less. IPMI covers the actual cost of health care treatment or service that can occur while living overseas.
Travel insurance typically applies a non-negotiable excess (the amount that plan members have to pay per claim). This means they will pay the same cost upfront regardless of their treatment needs or how often they claim. Because it’s a fixed, flat cost, plan holders don’t have the opportunity to make their payment options more affordable.
IPMI products are more likely to offer choices in the amount individuals pay toward covered claims to help them and their employers keep their costs within a certain budget. Some IPMI providers will customise benefits to suit different employer and individual needs, including offering different levels of excesses and of coinsurance (a percentage payment applied to specific benefits such as covered dental, outpatient treatment, maternity or optical claims). Since that percentage is usually applicable across different currencies and medical rates, it’s popular with globally mobile people who might receive treatment in a number of different countries in one plan year.
Health care costs vary greatly from country to country, and there can be significant variations in the cost of commonplace procedures within the same country or even the same city. People with IPMI cover may benefit from reduced health care costs associated with day-to-day outpatient treatment and long-term condition management.
Medical emergencies and travel for treatment
Employees who only have travel insurance are likely to have less control over their treatment options in cases of medical emergency. For example, they may not be able to fly home or go to a hospital of their choice; they will simply be taken to the nearest place that can deal with their situation. Or their ailment might not be severe enough to warrant flying home, but they might nevertheless need ongoing treatment not covered under their plan.
IPMI gives individuals and their families the ability to choose where they want to receive treatment in an emergency. In most cases, their IPMI provider will be able to arrange the evacuation and ongoing treatment on their behalf, which isn’t always the case with travel policies.
When individuals apply for travel insurance, they have to disclose all pre-existing conditions, which aren’t covered. If they don't disclose a pre-existing condition and then make a claim for treatment for that condition using their travel insurance, their claim will be denied.
IPMI can cover most treatment for pre-existing conditions as long as these are disclosed by a medical declaration.
Mental health cover
Mental health concerns such as stress, anxiety and depression are often overlooked when it comes to health insurance cover abroad – even though they are fairly common among expats. For example, the Mental Health Status of Expatriate versus U.S. Domestic Workers: A Comparative Study (2011) found that Americans who live and work abroad are 2.5 times more likely to suffer from stress and anxiety than their counterparts back home.
Some IPMI providers offer cover for employee assistance programmes, counselling and wellness programmes that can help prevent these issues from taking hold or address them if they occur. Travel insurance usually won’t offer anything in this area.
Beyond health care
Since IPMI providers have experience in both health care and travel considerations, some may offer supplemental support such as travel briefings in crisis situations and emergency safety assistance. This gives you, your employees and their families greater peace of mind when they’re travelling and living abroad. Most importantly, they may offer support with health and wellness needs and travel logistics before they make their move – helping to set them and their families up for a healthy future in their destination country.
This article was provided by Aetna.
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