Voluntary excess options like MediCare’s can slim down insurance premiums, but can also lead to huge medical bills.
Health insurance premiums increase like clockwork every year–lately the pace of medical inflation has been in the double digits. Now MediCare International is helping ease the burden with “voluntary excess” options for its International, International Plus, Executive and Executive Plus plans. By taking one of these options, expats stand to save 10-50% on their premiums.
It sounds great. A little too great, in fact–and you know what they say about things sounding too good to be true.
To understand MediCare’s deal (and whether it’s right for you) you first need to consider some private insurance basics. Usually a policy specifies “compulsory excess,” a base amount a customer must pay before it begins covering medical costs. In some countries, like the US, this is known as the “deductible.” As a general rule, the higher the compulsory excess, the lower the insurance premium. That’s because the expat is paying more toward his care.
Voluntary excess is added on top of that base amount. And again, the more voluntary excess an expat agrees to pay the lower his premiums will fall.
The MediCare plans bear this out. If for example you were to choose the GBP 500 option, you would pay GBP 500 more toward each claim and your premium would come down 10%. If you choose the GBP 10,000 voluntary excess, your premium comes down 50%.
If expats want to preserve their flexibility to make smaller claims, the voluntary excess discount is certainly not for them. Depending on how much they claim it could actually end up costing them more than the original premium! If, on the other hand, they’re purchasing a policy as a kind of catastrophic safety net or to fulfill a local insurance requirement, they may see more value.
When shopping for international health insurance it’s important to carefully consider not only your current health, but what might happen in the future. As we all know people’s health can change drastically for the worse with very little notice. In a situation of sudden, serious illness an expat with a high voluntary excess could end up with crushing medical costs.
for expats determined to opt for one of these voluntary excess structures–either with MediCare or another insurer–we recommend they choose one on the lower end of the scale.