What expats need to consider when buying international medical insurance
By Mark Rostron · June 12, 2014
International medical insurance can be quite a considered decision for many people. Perhaps not as considered as buying a house or a car, but when the financial health and well-being of you and your family is at stake by virtue of what your insurance plan does and doesn't provide cover for, it can suddenly escalate up the ranks.
There are many things that you'll need to consider when you buy expatriate health insurance. For example, whether your plan will provide cover wherever your job takes you, if you're covered should you need to be evacuated for life-saving medical treatment, or even if you and your family are free to be treated in the hospital of your choice.
However, would you know the difference between moratorium underwriting and full medical underwriting? More so, would you understand why the type of medical underwriting you choose could potentially affect the success of your application or your ability to claim for treatment in the future?
So what exactly is medical underwriting?
Basically, medical underwriting is the process that a health insurer uses to decide at what price and with which terms to offer its insurance plans, based on known or anticipated medical needs. People with pre-existing medical conditions present financial risk to the insurer because they are more likely to claim. Health insurance is essentially about covering unforeseen illness, not necessarily about providing cover for known medical conditions.
Moratorium underwriting sets a waiting period for pre-existing medical conditions to limit risk to the insurer. This way insurers can do their utmost to keep premiums affordable for plan members. A moratorium will therefore exclude all pre-existing medical conditions for a set period, often two years, but may then cover the conditions after that. Many health insurance providers, including Aetna, use moratorium underwriting.
In Aetna's case, we underwrite plans on a 24-month moratorium basis. This means that any medical conditions, or related medical conditions, that have existed in the 24 months before your plan starts, will not be covered until you have been free of symptoms and treatment for 24 months after the start date of your plan. Pre-existing medical conditions and related medical conditions are those that have one or more of the following characteristics:
- was foreseeable;
- clearly showed itself;
- you had signs or symptoms of;
- you asked for advice about;
- you received treatment for;
- to the best of your knowledge, you were aware you had.
Pre-existing medical conditions or related medical conditions may be covered after you have had 24 months' continuous cover under the plan and within that time you have not
- experienced symptoms;
- asked for advice; or
- needed or received treatment, medication, or a special diet.
On the other hand if you have experienced symptoms; asked for advice; or needed or received treatment, medication, or a special diet; then you will have to wait until you have completed a continuous 24-month period when none of these apply to you. Pre-existing medical conditions or related medical conditions may then be covered. This is the rolling part of the moratorium.
The main advantages of moratorium underwriting are that international health insurance plans are usually quick and simple to set-up and can be cheaper. However, you should consider carefully what medical conditions you have previously needed or received treatment for, or had signs or symptoms of in the past, and whether you would like to try and insure these conditions.
The disadvantage of not fully understanding the restrictions of moratorium cover regarding pre-existing medical conditions is that you could find yourself undergoing expensive treatment for a medical condition that will not be covered by the insurer.
Full medical underwriting (FMU)
With this underwriting type you would have to disclose medical history to the insurer and they would decide if they are able to offer cover for those medical conditions.
As far as InterGlobal we are concerned, FMU is the process that we use to assess an applicant's medical history to decide the special terms that we are prepared to offer. Should you elect to go down this road, you will need to submit a full medical declaration. The underwriting department will then agree to either accept all or some of your pre-existing medical conditions and may charge an increased premium, exclude all of your pre-existing medical conditions, or decline cover altogether. Any special terms that have to be applied will be shown on your certificate of insurance and cover will be governed by the benefits, terms and conditions of your plan.
The advantage of full medical underwriting is that you may be able to get cover for a pre-existing medical condition that would normally be excluded through a moratorium, giving you the peace of mind that you will be able to undergo treatment for that condition. On the other hand, even if your pre-existing medical condition is excluded from cover, you'll know from the outset what you can and can't claim for. So there'll be no nasty surprises, giving you the opportunity to financially plan for any treatment that you may need.
The disadvantages of FMU are that it can increase your insurance premiums and that enrolment can be a lengthy process, especially if you have family members on the same plan.
To moratorium or to FMU, that is the question?
The final decision on the best route to go down would essentially depend on you and your medical history and indeed your own personal choice.
If you have seen a medical practitioner in the last five years then it is very wise to run through the best course of action with an independent broker as the adviser can contact various insurers to establish which method of underwriting would benefit you most. This is often good practice as many international health insurance companies are not regulated to provide advice to customers and as such perform what the industry terms as non-advised sales.