Many people wouldn't consider health insurance a wealth related topic. In once that's true: like most wealth managers, we don't broker health insurance.
Still, we've seen how devastating it can be to get it wrong on both a financial and personal level.
Over the last few decades living throughout Asia as an expatriate, we've seen too many fundraisers to pay for medical bills.
Even for those for people we thought were well=paid expatriate managers who somehow didn't plan ahead effectively.
So we decided to talk to a broker friend Carsten Creutzburg from CIC Insurance consultancy to dig into the tips and traps for getting health insurance while living overseas.
Owen: Thanks for your time to talk today.
Carsten: My pleasure.
Owen: I’ll jump right in, what’s the biggest mistake you see expats make people make when buying health insurance while they are overseas?
Carsten: What I can see is that they try to figure everything out by themselves. It can be difficult to trust someone who you don’t know.
Especially insurance agents. Or brokers for that matter. Clients sometimes do not see the difference. But to go through the entire range of insurance products, you know, just for medical insurance, it doesn’t matter what type of insurance. It’s challenging for people to go through… it can be overwhelming to look at all the options.
But on the other hand, it can also be difficult to trust someone. Of course an insurance agent or broker, of course they want to sell a product. How do you know as a client, that the person on the other end doesn’t screw you over. Or doesn’t recommend some rubbish policy.
In South East Asia you have a lot of agents work for local insurance companies who tell you whatever you want to hear, but they will never tell you what’s the downside or the shortfalls. Or what’s the issue with the insurance. Why would they? They want to sell it.
An insurance broker on the other side has a variety of products on hand, no broker has every product, and can make recommendations based on the clients situation, needs and requirements; even though brokers do have their favorite insurance companies that they prefer working with.
In any way, a broker will go through the pros and cons with the client and help to make a decision which makes sense long-term for the client.
In addition, there are also unspoken expectations that can cause problems. If a client doesn’t talk about their expectations with the broker, then the broker can’t help. A broker can only help as much as they have information to work with. If they don’t have the information it is hard. It understandable that clients don’t want to give too much information away, because they don’t trust them a random insurance sales meet somewhere on the internet. It’s not an easy situation for both sides.
To answer your question in short: speak to a broker of your choice and not a direct sales of an insurance company and most importantly, speak about the expectations regarding the insurance you are looking for.
Owen: I’ve experienced that myself on many occasions in wealth management.
But back to health insurance because pre-existing conditions is a question I’ve had come up before with a friend who was a diabetic and had difficulty getting coverage from health insurers that they could work with that would give them the best amount of coverage. What advice do you have for expatriates with a pre-existing condition?
Carsten: Pre-existing conditions are always challenging and I think it links well to the first question about expectations. Pre-existing conditions, particularly if they are more severe, will never be covered by a new insurance company. My advice is actually that if you have existing insurance, stick with it. If you have an insurance company who pays, or covers your on-going condition, then stick with it. If someone tells you they have a great option for you…most likely not.
Any private company or insurance company wants to make a profit, they are not welfare agencies.
They don’t want to give you anything for free. If it is something minor, like, I don’t know, like you have had a broken leg 3 years ago, that’s not an issue. You’ve recovered and it’s not a big deal. When it comes to chronic conditions, then this really is a challenge. It really depends on the severity of the condition. And that’s another point to speak with your broker about. They can usually give you suggestions or advice, to find a suitable solution.
Owen: This is a story a insurance broking friend told me a while ago, and I believe it to be true. It used to worry me when I lived in China. Trying to get urgent care on a Sunday in a severe situation. A client of the broker had a severe heart attack and the hospital refused treatment until the insurance company had provided sign-off for open heart surgery. It happened on a Sunday and it was difficult for the Chinese hospital to get the sign-off from the insurance company. So they were just sitting there while the very sick fellow got sicker when he needed an urgent operation.
Is China the only place, where you can struggle to get urgent care and what can expats do to protect themselves.
Carsten: That’s a great question. It’s not only China where that can happen. I would say almost anywhere in the world, except say Europe or Australia where you will be treated right away. The US, I’m not sure…
Owen: I think they treat you and bill you later.
Carsten: Yeah, at least you will be treated. You won’t necessarily get first class treated, but you’ll get looked after. But let's not focus on the US too much.
In South East Asia. It is similar to China. If they don’t know the money is coming in, then the will wait. What can you do. Most insurers have 24/7 emergency hotline and the insurer will always try to push it as fast as possible and they have specialized teams for that.
But of course it can take a few hours and sometimes even longer if the insurance company is sitting in the UK with the Thailand hospital can be tricky if it’s not a first tier hospital because of the language barriers. If you have a heart attack somewhere remote and you are in a regional hospital and there aren’t many people who speak strong English and it can take awhile for the situation to become clear.
I think usually if it is a life threatening situation, they will usually help you, even without payment. But it is a bottleneck. If it is broken leg and it isn’t life threatening you might sit there for a few hours before they do something substantial until the clearance comes in from the insurance company.
So what can you do? Usually, I’m saying to my clients: because of that situation you can’t really blame the insurance company for it. Have a credit card with you and provide a deposit to the hospital. You don’t normally need to pay; a deposit is enough to get started. The hospital might take one or two thousand dollars as a deposit so they then can start the treatment, and in between they will contact the insurance company.
Owen: I always thought that having a good credit card with a big limit was good option for emergency.
Carsten: Actually there is one insurance company that will give a credit card as a membership card. They are usually act quite fast especially because the membership card is already a credit card. Usually when you call the 24/7 hour emergency line they will load the card right away. If it really is an emergency situation. Then they will get in touch with the hospital and settle everything directly.
Owen: Direct billing, is that important. How important is a direct billing option insurance really for most expatriates?
Carsten: Direct billing and we can link this to the question before again. There is always an option to a local plan that usually are linked to the hospitals in the country where you live. Then there is no issue with emergency treatment. They will treat you right away.
However the issue is, that the local plans, especially in South East Asia are very over priced for the coverage that you get. Very over priced. Maybe even cheat their clients.
One of the problems I see in the Thailand for example. I see this a lot in South East Asia, where a foreign insurer works together with a local insurer. Maybe best I don’t mention any names. And they all want to make all the same amount of profit. Obviously, in that situation it can't work in favor of the client.
To answer your question, for direct billing we need to separate this into hospitalization and outpatient. From a client perspective direct billing is for everything. Doesn’t matter if you are hospitalized or outpatient treatment. Usually all companies will directly settle hospital claims. If you have a planned surgery or an emergency the insurance company will reach out to the hospital to settle it for you. That’s usually always the case; if the client follows the insurers rules (pre-authorization for example).
For outpatient that depends on the company, most international insurers do not have direct billing. Is it really needed? I would say no. It comes down to the question of what benefits the client. At the end of the day you pay for it. Running a direct billing network costs money. You need a third party administration company who is running the entire process and this costs money. If you talk about Passport Card again, that’s a good system but again it is also more expensive with others although it depends on what you compare them with.
One more point: The good thing is if you pay cash you are usually much better treated in the hospital. You pay cash and then you claim it by yourself afterwards. First all, usually you don’t have to wait long; especially in private hospitals. You will be treated right away.
If you say you have an insurance company with direct billing, then this needs to be clarified with them first and it takes longer. Of course, on the other hand then there won't be much hassle with the claim afterwards.
If you do direct billing is an option, then it doesn’t mean you have the client is covered automatically. If they decide it isn’t covered, then they will claim it back from you. If you don’t repay then they may cancel your coverage. Overall, without Outpatient direct billing it's usually a better deal for all parties.
Owen: When I was an expat and before I had a family, I would also pick a big excess of $1,000 so I had hospital cover but I could reduce my premiums. Is that a good way to go?
Carsten: Absolutely makes sense to have an excess or a co-pay or deductible (many words for basically the same meaning). Although a co-pay is more of a hassle to organize. If you have to pay a certain amount of the claim yourself. Both will save cost. To determine if it is worth it you should do some calculations but usually it makes sense.
The question is how big is your deductible? That comes down to the type of plan that you choose. If you have a hospitalization plan only for treatments in the hospital without outpatient then it can make sense to have a deductible of $1,000 or $2,000 or even higher. The rest will be covered by the insurance company. If you are hospitalized, then the costs can easily be $20K, $30K, or even more dollars in cost. I had a meniscus surgery last year in Bangkok hospital that was around USD 10,000 Euros.
My insurance has a deductible for 1,000 Euros but only for outpatient treatments. For inpatient there is no deductible.
Owen: You can break it down that way? Having different hospitalization and outpatient deductibles?
Carsten: Different insurance companies have different offers. Some working with general deductibles, some in-patient only and some for outpatient. It depends on what you choose.
Owen: With the rise of digital nomads over the last decade and particularly since COVID, we are seeing people base themselves in different countries. Are there any countries where people are asking for coverage and from your perspective and experience you don’t think it is a good idea. It’s not a good idea to be there in general if you want health insurance coverage. Are there places to avoid?
Carsten: Not many people have has asked that question that much before. Digital nomads live where they want to see and where they want to live. People go to Bali and Thailand, SE Asia in general, but also South America, or even Africa; anywhere actually. It usually comes down to visa rules and whether they can stay there or not, but travelling; even long-term, became much more easier then it was 20 years ago.
When it comes down to the medical infrastructure and if I have to think about it, then I would think that Laos is not so easy. Not so many hospitals. Cambodia is better than Laos but still you need to be in one of the big cities otherwise you are in trouble. Look, Laos is a beautiful country but there is nothing – sometimes not even not every roads outside of cities. Once you are out of the city and then 5km out of the city and then there might be not much is no real road anymore, except jungle.
Carsten: If you need treatment and you need an ambulance, then you may will die. Hopefully you can get a taxi and take yourself to hospital.
Owen: Any last piece of advice for expatriates or foreigners who are paying their own way and don’t benefit from a full expatriate package and health insurance coverage.
What last pieces of advice do you have?
Carsten: What I would say that it is important to have health insurance. It is less important to be comprehensive and more important thing is to have one so that if something major happens, you have some cover. Even if you have a million pounds in your bank account, it doesn’t make sense not to have health insurance.
The hospitalization only plan maybe costs you around $1,000 per year if you are young and if you are older $2,000-3,000 per year. If you think about how much you pay over the years $60-80,000 over 40 years. If you have a heart attack and you are in the hospital for 2 weeks, then usually it will easily end up $100 to 200,000 USD quite easily. I’ve heard of larger costs too.
If Outpatient coverage is needed is debatable You don’t need to have the out-patient package. Often in Asia you can pay for that by yourself and it is a much easier life for everyone. Just go in and pay rather than pay and claim, which can be a hassle. The only issue with that and the risk can be a chronic condition, which can be quite costly when paying everything out of pocket.
Also, another advantage is that insurance companies have a medical team who can give advice on where to go, and where they will provide service for you, based on the situation of what happens to you, they will find you a hospital that can treat you best.
If you don’t have an insurance, who do you ask about it?
Owen: It reminds me of people I see on Facebook or other platforms and there are expats in Asia that are friends of friends that are fund raising for medical treatment. Maybe they need a kidney transplant or cancer treatment, but it seems they don’t have coverage. I have often wondered, how did that situation arise?
Carsten: If you start as a digital nomad and you want to cut costs, then medical insurance can seem like too much of a cost. A heart attack may seem unlikely for a young person but accidents happen all the time.
You can go to the sea and get stung by a jellyfish, or a road accident. It happens and then you need treatment and it can cost a lot of money. Even if you don’t get an international medical insurance, you can still get long-term travel insurance that have terms of up to 2 years and even up to 5 years for certain nationalities.
Owen: What is the most unusual types of injuries?
Carsten: Spiders happened. Snake bites have happened.
Owen: I think you are just describing Australia.
Carsten: Ha! Scorpions . Well, you asked about unusual things.
Carsten: Motorcycles and road accidents in general causing the most common injuries. It's very important to have the proper license in the country where you drive and wear a helmet. Not having a license might give the insurance company a reason not to pay. Many insurance companies using any reason they can get, not to pay a claim, so don’t give them a reason.
Owen: A huge thank you for your time today Carsten.
Carsten: No problem at all. My pleasure and hope it will help anyone looking for insurance.
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About Carsten Creutzburg
Carsten has more than two decades in the insurance industry in Asia in the health insurance industry as a consultant, broker and now company founder. He currently lives in Thailand and travels frequently throughout Asia and other parts of the world. Thus he has a deep personal understanding of the insurance needs of expatriates and digital nomads alike.
About CIC Insurance Consultants
CIC was founded by Carsten Creutzburg in the beginning of 2018 after more than 20 years of working for and with a variety of different insurance brokers and governmental insurance institutions in Germany, China and South East Asia.
Caterer Goodman Partners relationship with CIC Insurance Consultants.
Caterer Goodman Partners (CGP) does not have any kind of relationship with CIC Insurance Consultancy. This information is purely general and does not constitute investment advice. This article should not be seen as an endorsement of a particular advisor or guarantee of the company or consultant mentioned here.
About Caterer Goodman Partners
Caterer Goodman Partners is a wealth manager specialized in serving expatriate families in Asia with a focus on portfolio construction and discretionary account management. Investors should consider all advice and disclosure documents and consider their personal situation before making any investment decisions.
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