Embarking on the expat journey is thrilling, but navigating health insurance abroad can feel like deciphering a foreign language without a dictionary. Whether your passport country provides government-backed health coverage, employer-sponsored plans, or requires personal policies, the rules often change once you cross borders. Your existing coverage might not extend overseas, leaving you pondering: Do I need a new policy, an extension, a supplement, or perhaps nothing at all?
To unravel this complex web, I consulted with Timur Kao, an experienced expat and insurance broker, to craft this essential guide. Together, we’ll explore the necessity of health insurance, the types available, potential benefits, regional coverage considerations, and any special terms pertinent to your new locale. Let’s demystify expat health insurance and equip you with the knowledge to make informed decisions.
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Do you need health insurance?
The primary benefit of health insurance is to cover the cost of medical bills, especially hospitalization. Getting quality medical attention, particularly as an expat, can be costly if it’s not covered by your health insurance. Having insurance, though, enables you to get quality medical care without the cost hanging over your head. One of my friends ran an adventure tourism business; when a customer fell gravely ill during their trip, insurance covered the cost of the helicopter ride to the nearest airport, then the chartered medical evacuation plane that took him to the hospital where emergency surgery saved his customer’s life. Imagine having to make life-or-death decisions like that when you have to pay for those medical services.
Insurance is something that all individuals should consider, regardless of age or health, since insurance can cover not only medical expenses related to illnesses but also caused by accidents, such as getting hit by a careless scooter, being injured while playing sports, or being involved in a traffic accident.
If you already have an insurance policy in your home country—whether government or private—you may think you don’t need a local insurance policy in your host country. That’s possible—but before you assume this is so, make sure to specifically check whether your policy covers residency in your specific country/region (and not just travel through it). Some policies may have exclusions for duration (e.g. they cover travel/vacation, but not residency, based on number of days) and some policies may have exclusions for certain countries/regions of the world. Make sure to check the coverage specifics of your policy with your insurance provider before concluding you don’t need health insurance.
What kind of insurance should you get?
When getting health insurance locally, the main options are social insurance, private insurance through an employer, or individual private medical insurance. The main advantage of an insurance policy local to your host country (instead of just keeping your insurance policy from your home country) is that the local direct billing network will probably be much wider, and customer service will be in the same time zone and country/region code as you—eliminating the need to wait until the middle of the night to address issues with your insurer. On the other hand, the English level of customer service for your local insurer may leave much to be desired.
When using local private medical insurance, it’s important to know how the insurance service fits into the health system in your specific country/region. Taking China as an example: anything you do in a hospital or clinic—consultation, getting a prescription, getting an X-ray, etc.—must be paid prior to service. After paying, you receive your medical services, and then submit those bills afterward to your insurance provider, who reimburses you. If you’re in a situation like this, it’s not enough merely to have health insurance—you also need to have enough cash on hand to prepay the hospital bills and meet your bills until your insurer reimburses you. Alternatively, a hospital may accept a Guarantee of Payment by the insurer; this is a letter from your insurer that guarantees the insurer will pay for a procedure, in which case you don’t have to pre-pay for an expensive procedure (e.g. childbirth).
As another example of why you need to understand how insurance fits into the local hospital situation, consider that some countries (and insurance policies) distinguish between public hospitals & private hospitals. If you go to the latter one—an international hospital—it might be classified as a High-Cost Provider by your insurer, meaning that you’ll have to pay higher insurance premiums in order for it to be covered. While most international hospitals aren’t High-Cost Providers, it’s important to check in advance with your insurer to make sure you don’t get unexpected bills.
What types of medical care are covered?
Medical insurance distinguishes between inpatient & outpatient benefits (inpatient care is when you’re “checked in” to a hospital, typically overnight; outpatient care is when you visit, get care, and then leave). The cheapest form of insurance typically covers only inpatient care (since most people won’t ever need to use it); it will cover the costs of the hospital room, exams, surgeries, nursing, prescribed medications, evacuation, etc. in case of hospitalization. Getting outpatient care covered by your insurer will increase the amount you pay for your premium substantially (double, triple, or even more compared to inpatient-only coverage).
Most plans allow wellness visits (e.g. vaccines and health-check) and dental benefits to be added individually, each one costing 50–60% of the benefits it offers. It’s also common to have 20–50% co-payment for dental coverage.
Some policies may have waiting periods, during which certain benefits are not available until the waiting period is over. For example, maternity coverage often has a waiting period such as 6 months. This means that pregnancy expenses won’t be covered unless you get pregnant 6 months after your insurance starts. You definitely can’t get pregnant and then buy health insurance covering pregnancy! Maternity coverage may also have significantly higher fees, given the cost of medical care for childbirth.
Pregnant? Check out other essential information to know about an international pregnancy in the article: Babies Without Borders, Part 1: Preparing for Birth at Home or Abroad and Babies Without Borders, Part 2: Dispelling Birth Assumptions.
Emergency coverage will usually use the inpatient or outpatient insurance limit. Life-threatening emergencies may also be covered outside the insurance’s region of coverage.
Common regions of cover are: single country, home country and country of residence, world-wide excluding USA (WWE), or international. Note that including medical coverage in the USA will significantly increase the premium you pay.
An insurance policy may also require that you pay part of the medical expense, often by requiring you provide a co-payment, deductible, or excess fee:
- A deductible is the amount that you must pay in the insurance year before the insurance company will start covering their medical expenses. If your policy has a $5,000 deductible, you’ll pay the first $5,000 of medical expenses, after which your insurer will start covering the bills.
- A co-payment is a percentage of the medical expenses paid by you (e.g. 10–20% of the total bill). Some insurance companies also have a co-payment of 100% for some procedures, meaning that you pay for 100% of that expense.
- Excess is a fixed amount of the medical expenses paid by you, typically applying to consultations.
Watch out for: Pre-existing conditions
With the exception of government-provided insurance, insurance companies are businesses and so seek to profit as they provide you a service. If people only bought insurance after they experienced a serious accident or health condition, insurance companies would go bankrupt and be unable to cover anyone’s bills. This means that insurance companies are strict about accepting clients with pre-existing conditions and may even outright refuse to accept applicants with more serious pre-existing conditions. If any pre-existing conditions are not declared during application, a patient risks having the insurer refuse to pay for a related treatment even if a policy is started. Applications with pre-existing conditions can be treated in any of the following ways:
- Rejection of application
- Exclusion of the pre-existing condition, but provide cover for anything else unrelated
- Lower limit of benefits for a pre-existing condition, but normal cover for anything else
- Loading (charging an additional fee) for full or limited cover of a pre-existing condition
- Moratorium, where the condition is not covered at first, but may be included in the cover after a certain number of renewals
How can you get insurance as an expat?
Searching online for insurers and requesting quotations is pretty straightforward. Note that many international insurers have local branches which have a different website and will offer different local plans. For most purposes, these branches are separate entities altogether: their customer service is local, the premium is paid locally, the direct billing network will more comprehensive in the specific country, etc. The only connection with the international branch is some insurers offer portability from their international branch’s plan to a local one, and vice-versa. Just make sure that, in choosing a plan, the benefits you want are covered and that your intended region is included. Get estimates from multiple companies so you can compare their costs and benefits.
Using an insurance broker
If you don’t want to figure everything out on your own, consider finding a trusted insurance broker who can help you find and compare policies. Brokers are licensed and independent from insurance companies so they can work with many different insurers to find the type of insurance that is your best solution. Their services are covered by the insurers in the form of a commission so they won’t cost you extra.
An experienced insurance broker knows the advantages and disadvantages of every policy, saving you the trouble of having to research and compare yourself. They are also familiar with how insurance companies operate and can help resolve disputes or problems under policies you bought with them.
A good insurance broker should communicate with you to learn what you are looking for and will need feedback in order to provide relevant insurance options. A bad insurance broker may try to push you towards a specific plan and will ask few or no questions on what type of cover you would like to have; the plan a bad agent may recommend may not be the best solution for you, but it might be the one that gives them the biggest commission.1
How much does it cost?
The answer is: it depends. Age is an important factor and one of the main reasons your insurance premium will increase over time (since, as you age, you tend to require more medical care). Aside from age, the premium will also be affected by factors such as the benefits offered, types of hospitals available, region of coverage, pre-existing conditions, deductible/co-pay/excess policies, number of people in the policy, etc.
There are two ways to get an insurance plan quote: you can first choose your type of coverage and see how much it will cost, or you can set a budget and then check what coverage can be purchased with that amount. Either approach will give you an initial quote to start with, which can be adjusted or used as a reference when searching for a more suitable option. Again, brokers can help in this process.
How to use insurance internationally
Depending on the country/region in which you get medical care, you may prepay for your medical care (and then submit those expenses to the insurer to be reimbursed) or you may provide your insurance to the hospital which bills the insurer’s network directly. In the case of the latter, the hospital will accept your insurance card as proof of insurance; however, the fact that the hospital will bill your insurer directly does not mean that your insurer will pay for your coverage. It merely means that the hospital will file an insurance claim on your behalf; the insurance company will still analyze and approve the expense. It’s not uncommon for some expenses not to be approved by the insurer (such as vitamins prescribed by a pediatrician), at which point either the hospital or insurer will contact you for payment.
Patients may also be required to request pre-authorization from insurers before undergoing more expensive treatments or exams; the most common example is hospitalization. This is so that the insurer can do a preliminary evaluation of this particular case and warn you if they will not be covering the costs of this treatment. Knowing this in advance is helpful so that you can select a less expensive hospital or alternative treatment, rather than being surprised by the bill afterward. For example, a hospital may request either prepayment for childbirth or a letter from the insurer confirming coverage for the procedure under your insurance policy. Another example would be finding that a stomach-reduction surgery for weight loss is rejected by the insurer, so the patient may choose less expensive alternatives.
Make sure to check out The Prepared Expat’s guide to visiting hospitals internationally: Death by Assumption: The Expat’s Hospital Survival Guide.
Watch out for: Waiting periods
If you purchased your insurance policy recently, check if it has any waiting periods. They are common for benefits such as maternity or dental; lower-end policies may even have waiting periods for hospitalization due to illness. The good news is that waiting periods only apply to new policies, so you don’t have to worry about them when renewing your insurance.
Conclusion
Health is something that many of us take for granted until we need medical care, but insurance can give you peace of mind that you and your loved ones can get quality medical care even in the case of an emergency. When living overseas, it’s a good idea to learn how the local health care system works, how to navigate it, and how insurance fits into the system.
Timur Kao is from Brazil and has been an expat in China for nearly 30 years. Fluent in four languages (English, Chinese, Spanish and Portuguese) and with wide experience as an insurance broker, he helps foreigners and locals, individuals and organizations, to find health insurance plans to suit their specific needs. He also offers individual travel insurance policies and company insurance policies.
In his free time, he enjoys playing sports and spending time with his children.
Thanks Timur for an informative guide! If you have other questions for Timur, or would like to consult with him about your insurance needs, you can reach him via email t.kao@asian-risks.com.cn or via the messaging app WeChat. Timur’s username is timurkao, or you can scan the QR code below:
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Footnotes
- Mark’s note: I haven’t used this technique specifically with insurance brokers, so I can’t comment whether it’s helpful specifically with insurance—but, when someone gets paid a commission from a sale made to me, I will often ask them what their commission is for a specific product/recommendation versus another one. Some agents may feel the amount of the commission is personal information (it is their salary, after all), but good agents will be willing to tell you that they get a higher commission from product A than product B. That doesn’t mean product A is worse—it may be the best fit for you—but it does help inform your decision. On the other hand, if an agent refused to answer the question, even refusing to disclose whether the commission is higher on one product than another, then this makes me suspicious and I usually take my business somewhere else. Someone who is honestly trying to serve you won’t fear full disclosure; that’s the kind of person you want to trust with your business. ↩︎
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