While investigating healthcare options, many people will have noticed that there is a great variety of health insurance options. Depending on the local healthcare system of the country you’re looking for health cover in, the local private health plans will be similarly varied in order to meet the needs of the populace that may be going unfulfilled by the healthcare system.
However, while each country may have their own local health plans, there are also global health insurance plans that can provide health coverage around the world. Local plans will be typically limited to covering healthcare in their own country, although some insurance providers are looking into plans where medical tourism may help keep costs low. Global health plans on the other hand will provide health insurance coverage internationally; depending on the quality of the local healthcare system, this would allow the policyholder to seek treatment somewhere where they feel the facilities could provide satisfactory care.
Given that local health plans will only cover the policyholder in the country it was taken out in, if the policyholder relocates to another country, they will have to take out a new policy in the country they have moved to. Should the policyholder have developed a long term illness prior to moving, then this illness will probably not be covered under new health policies as it will be a pre-existing condition. Global health insurance plans will typically only require the policyholder to file a change of address form, whereby coverage will continue. This is often referred to as the portability of the insurance plan.
While many of the differences between global and local health plans come down to their geographic areas of coverage, there are other areas in which how the plans are structured diverge. One such divergence is how local or global health insurance plans will renew policies, or more specifically for how long. Often times, both local and global medical insurance plans will place age limits on applicants that they will accept, with 65 being the general cut off point, although some insurers may allow people up to the age of 80 to apply. What sets the local and global plans apart is that most local health insurance plans will often not renew the policyholder’s plan when they get older, whereas most global plans will guarantee the ability to renew the plan for as long as the policyholder wishes.
Local and global health insurance companies also typically have a different system for assessing and adjusting their premiums every year. Most global health insurance plans are referred to as being ‘community rated’ meaning that when the insurance company is reviewing their plans, they decide how much the next year’s premiums will cost based on the age of everyone on the plan and the growth in medical inflation. Most local insurance plans will typically be ‘experience rated’ meaning that while they also take medical inflation into account, the majority of your premium will be calculated based on your claims history. This means that when you first take out the local private medical insurance, it will likely be quite inexpensive as you haven’t made any claims. Once the plan comes up for renewal, the insurer will look at your claims history for the year and raise your premiums accordingly.
While this highlights the biggest differences between local and global private medical insurance plans, there are other differences such as the typically higher annual limits on benefits with global plans. While some plans may be similar, the exact coverage of benefits will vary by insurer. It is important to make sure that as a policyholder one understands what coverage their plan offers them, whether it is a local or global policy.