Expats medical coverage – buy local or global?

By Robert Tillotson

How and when to choose global health insurance? While global health insurance is usually the first choice for some expats, local health insurance (or even public health care) might be a better fit. It usually comes down to price. The fact is you will always be able to find cheaper – sometimes “free” – local options. The question is at what cost?

Our conclusion is that you can always save money. In one case you might save $100 a month by gambling on and never needing an organ transplant, cancer treatment or recovery from a major accident. In another case, you can save $20 a month by simply agreeing to deal with local language and bureaucracy.

Here is your checklist:

Do you keep moving?

If you are not 100 percent convinced that you will stay in a single country the rest of your life, then local health insurance is typically not a good option. Local health insurance will not provide you with continuous coverage for major medical issues once you move on to another part of the world. This means that when you move abroad or even to another region, you will have to change insurer. This might not be a problem when you are 21 years of age, but with age and more pre-existing conditions or life incidents, you might be denied partial or full coverage. In the best case scenario, your annual cost will go up significantly.

Do you travel?

If you travel, you need coverage abroad. Yes, some local health insurance plans include travel insurance but most do not. It is best to check; sometimes coverage would only include “life-threatening emergencies.” However, normal travel insurance does not include any major medical coverage — at best, you would be covered for an acute episode, like a heart attack. If you purchase a travel insurance plan with major medical coverage (which is de facto a “global health insurance”) you might end up paying as much as you would when purchasing a decent 12-month renewable global health insurance to start with. Also, travel plans are not typically renewable. A few offer a second year renewal but have the ability to “rate up” in the way they feel necessary. In other words, a travel plan that cost $1200 for the year could be rated up to $4200 or higher after a serious medical issue.

Do you like to choose freely?

Most local health insurance will only provide coverage for the hospitals and doctors in their local and/or regional network. This might not include the “best-rated” providers or “hospitals of excellence” or “providers of choice.” Even worse, if you ask around, many expats find out after the fact and get stuck with tremendous hospital bills. Global health insurance does not have as many limitations as a local or regional plan. Now, if you understand and are OK with the restrictions, and also satisfied with a restricted network of hospitals and doctors, then local health insurance might be an acceptable choice.

Do you need entry flexibility?

To start many local health insurance plans have stronger restrictions on age. It´s very common to allow only a person to join up to the age of 60 and then he or she might get kicked out by the age of 64. This is also the case with many pre-existing conditions at renewal time. Global health insurance usually offers more flexibility.

Do you need an advocate?

Any insurer, local or global, will be happy to take your money. The question is will they pay your claims. Again, both types of insurers could have both good and bad track records; research and testimonials tell the story. Now, traditionally, local health insurance does not work with brokers to handle claims. This means when it comes down to it, you are on your own. With global health insurance you always have the option to work with a broker. Never buy any insurance directly. Your likelihood of getting a claim paid is significantly lowered if you don’t have anybody that guides you through the process and can go to bat for you when called upon. A broker can leverage the existing client base and that means “power.”… especially with large claims.

Do you know the local language?

Health insurance is a complex issue: insurance jargon is complicated. Medical terms do not make it any easier. Now add 40 pages of fine print in foreign language and you really have a challenge in front of you. If you are fluent in the local language and OK with the layers of member services, then a local health insurance might be the right option. If you tend to get lost and frustrated with unclear decision-making and unclear claim translation with a local language, then a local plan may not be the choice.

Do you meet the requirements?

Global health insurance typically does not cover local nationals. It requires an applicant (or your husband/wife) to hold a passport from a foreign country in order to receive coverage. This does not necessarily mean that a global plan will not cover you and your family in your home country, but you might be infringing on certain regulations of your home country. (i.e: ACA in the States).

To qualify for local health insurance you might need a work visa or permanent residency. You might also need a proof of residency like local utility bills or others. Check the requirements for every insurance before you apply.

Have questions? Join in on the conversation at “One Hundred Expats” on Facebook or email robert@tilloglobe.com.


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