The ability to access world-class treatment means senior executives will find an international PMI plan attractive whether they work overseas or not says Sam Barrett
Global mobility and greater healthcare transparency will make it easier to access medical treatment anywhere in the world. And, with the trend likely to start among the more affluent, advisers need to consider the healthcare benefits they recommend for senior executives.
The international medical insurers are already responding to the changes. Although some still prohibit treatment in the UK, more and more are dropping this restriction or launching products that give access to healthcare anywhere in the world.
Cross border cover
A good example of this is Allianz Worldwide Care’s Signature plan, which was launched in the summer of 2012. The plan, which is available as Signature Prime and Signature Plus versions, gives policyholders all the benefits typically found on a high-end international policy but with the ability to use them wherever they are in the world.
Allianz Worldwide Care chief executive Ron Buchan says the plan has sold well, especially among professionals such as lawyers and hedge fund managers. He explains the company’s thinking. “It’s illogical to restrict cover to the country of residence. People do travel a lot more for business and it is possible to work from anywhere in the world now. I expect to see the difference between domestic and international policies blur so we just have healthcare policies that cover you wherever you are.”
But while this product is aimed specifically at the executive market, employees have been able to access cover that includes the UK for some time. Many insurers including Aetna International, Axa PPP International, Bupa International and Morgan Price allow you to include UK domestic cover within a plan.
Axa PPP International head of direct sales and marketing Matt Aston says: “We did have a restriction but there’s no legal or regulatory requirement that restricts where you can cover on an international plan. The choice between a domestic or international plan comes down to suitability of cover rather than simply where you will be based.”
The increase in demand for true global coverage also fits with the way that healthcare delivery is developing. Rather than provide general medical services, healthcare professionals and facilities are specialising in particular disciplines. “People are getting used to travelling to see a specialist and while it might not be so far in a large country, if you’re somewhere smaller you can find yourself having to go abroad for treatment,” adds Buchan.
On top of this, there’s now much transparency around the quality of healthcare. As an example the NHS has started to publish data on around 3,500 consultants this year, giving details of the number of times they have carried out a procedure, mortality rates and whether clinical outcomes were within expected limits. The availability of this type of data makes it easier to compare the quality of healthcare, allowing employees to access the best specialists if required.
Additionally, as the economy starts to pick up, employers are finding it’s more important than ever to pull together an attractive remuneration package for their executives. “Employers are looking for benefit rich policies to cover their senior employees. Even where someone isn’t particularly globally mobile they may still consider an international policy as it offers better benefits than a domestic plan,” explains April Medibroker sales manager Steve Nelson.
Going international does offer a much more generous array of benefits than sticking with a domestic plan. “UK domestic plans are designed in conjunction with the NHS so there are natural exclusions. Conversely an international plan must ensure that all aspects of an employee’s health are taken care of, wherever they are in the world,” says Aston.
One of the main examples of this is cover for chronic conditions. While a UK plan would cover an acute incident, it would expect an employee to access the NHS for medication for the ongoing maintenance of conditions such as high blood pressure, diabetes and asthma. “Senior executives don’t want restrictions on their cover,” says Aston. “Knowing they can be seen in a private clinic at their convenience and that the bill will be picked up is important.”
Private GP services are another benefit commonly included on international plans but not UK domestic ones. Although most people do have an NHS GP, there is a huge appetite for private GP services. For instances Polish dental and medical centre My Medyk has more than 30,000 patients on its book, with around 20 per cent of these being Brits who are happy to pay the £70 consultation fee.
Another key benefit additional is routine maternity. While the NHS provides this service, including it on an international plan means that executives, or their wives, can choose a private maternity service while in the UK.
Filling benefit holes
Although an international policy provides additional benefits in the UK, it really comes into its own when it travels overseas. Where someone has a domestic plan and purchases separate travel insurance for their overseas trips, there can be a substantial hole in the cover as Aetna International global head of distribution Nic Brown explains: “A business travel policy is more focused on the needs of this market than a standard individual plan but you would still have gaps in the coverage such as prescription drugs and limits on the benefit that you just wouldn’t see on an international plan.”
As well as less comprehensive cover, executives on a travel policy also miss out on some of the support services developed to assist policyholders. These can include translation services, country-specific health information and networks of hospitals where direct settlement arrangements have been put in place so the policyholder doesn’t have to foot the bill themselves initially.
Additionally, given the trend towards travelling for elective treatment, this idea wouldn’t be entertained on travel insurance. Brown adds: “On a travel insurance policy it’s about treating an emergency or an unexpected health problem but an international policy would allow you to travel for better treatment. This choice is a key benefit to executives.”
But these additional benefits do come at a price. Although an international policy can replace the health benefits of a travel policy as well as the domestic medical insurance plan, employers are still looking at a significant price hike. “It will cost more and there are some eye watering premiums out there but you do get what you pay for,” says Nelson. “There is plenty of demand for the extra benefits on offer and, if an organisation’s senior executives do travel, it’s definitely worth considering an upgrade.”
The broader cover may mean the price is higher but, as these products are flexible, it is possible to match the domestic price by taking out some elements of cover. For example Buchan says that on Signature if you take out the GP benefit and exclude treatment in the US, the cost would be comparable to a top end UK domestic plan. “The cover will be slightly broader but there’s no real reason why it should be any more expensive than a UK plan just because you can have treatment abroad. There are very few places in the world where healthcare is more expensive than in the UK,” he says.
While the insurers are keen to grow this market, there is reluctance from some UK advisers to extend into the international medical insurance market. With different regulatory and compliance requirements around the world, it can appear complex and complicated.
As an example Aston says advisers need to understand where an executive may be based and how this might affect the cover. “More and more countries have mandatory health insurance requirements for expatriates based there and you also come across a variety of different state systems in operation. You do need to understand these requirements to be certain there will be a smooth continuation of cover when someone moves countries, especially when you’re arranging cover for an executive,” he says.
Although getting to the grips with the differences can seem daunting, often the peculiarities of each country’s healthcare system is taken care of by the insurer. And certainly this would be the case where an insurer is marketing a high-end product for UK executives.
However Brown says a big education piece is required to help advisers feel more comfortable about recommending international cover. “As medical tourism becomes more commonplace I do expect to see growth in this type of international arrangement. There are plenty of opportunities for advisers keen to explore the market.”
There’s also plenty of assistance from insurers for those keen to develop this part of their business. As an example Aetna International can provide support with technical training on compliance and regulatory requirements as well as the finer details of the products.
There is also scope for international to form part of a wealth manager’s overall proposition to high net worth individuals.
And, for those who have already built up their international business, the benefits are clear. “The 2008 credit crunch taught many businesses that they couldn’t rely on the domestic market and that they had to explore opportunities overseas,” says Nelson. “The same is now true for advisers with international medical insurance.”