how does international health insurance work

What Is Health Insurance?

Health insurance is a contract that requires an insurer to pay some or all of a person’s healthcare costs in exchange for a premium. More specifically, health insurance typically pays for medical, surgical, prescription drugs, and sometimes dental expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees, with premiums partially covered by the employer but often also deducted from employee paychecks. The cost of health insurance premiums is deductible to the payer, and the benefits received are tax-free, with certain exceptions for S corporation employees.

Following the introduction of the Affordable Care Act in 2010, the number of people without insurance fell by over 20 million to reach the lowest ever level in 2016, according to the Kaiser Family Foundation (KFF).

However, from 2017, the number of adults without insurance rose again by 2.2 million, from 26.7 million in 2016 to 28.9 million in 2019. Between 2016 and 2019, the percentage of people without insurance rose from 10% to 10.9%. However, the rate of people with health insurance is still higher than it was before the introduction of the Affordable Care Act.

2012 report from the Commonwealth Fund states that one-quarter of all U.S. citizens of working age have experienced a gap in health insurance coverage. Many people in the survey lost their health insurance when they became unemployed or changed jobs.


What is an international health insurance cover?

An International health insurance cover is a health insurance plan designed to cater to individuals, couples, and families working and living overseas for more than 1 month. Policies are designed to protect your healthcare needs when you are living abroad and provide access to local health care services, emergency cover, maternity care, treatment of ongoing conditions, and repatriation if needed.


How does international health insurance work?

International health insurance works the same as the health insurance you have in your country. You decide on a plan, decide on the coverage you want, and then you pay monthly or annual premiums (sort of like a subscription).

Important Insurance Terms and Concepts:

  • Out-of-pocket expenses: The terms “out-of-pocket cost” and/or “cost-sharing” refer to the portion of your medical expenses you are responsible for paying when you actually receive health care. The monthly premium you pay for care is separate from these costs.


  • Annual deductible: The annual deductible is the amount you pay each plan year before the insurance company starts paying its share of the costs. If the deductible is $2,000, then you would be responsible for paying the first $2,000 in health care you receive each year, after which the insurance company would start paying its share.


  • Copayment (or ‘Copay’): The copay is a fixed, upfront amount you pay each time you receive care when that care is subject to a copay. For example, a copay of $30 might be applicable for a doctor visit, after which the insurance company picks up the rest. Plans with higher premiums generally have lower copays and vice versa. Plans that do not have copays typically use other methods of cost-sharing.


  • Coinsurance: Coinsurance is a percentage of the cost of your medical care. For an MRI that costs $1,000, you might pay 20 percent ($200). Your health insurance company will pay the other 80 percent ($800). Plans with higher premiums typically have less coinsurance.


  • Annual out-of-pocket maximum: The annual out-of-pocket maximum is the most cost-sharing you will be responsible for in a year. It is the total of your deductible, copays, and coinsurance (but does not include your premiums). Once you hit this limit, the insurance company will pick up 100 percent of your covered costs for the remainder of the plan year. Most enrollees never reach the out-of-pocket limit but it can happen if a lot of costly treatment for a serious accident or illness is needed. Plans with higher premiums generally have lower out-of-pocket limits.


What it means to be a ‘Covered Benefit’

 The terms ‘covered benefit’ and ‘covered’ are used regularly in the insurance industry but can be confusing. A ‘covered benefit’ generally refers to a health service that is included (i.e., ‘covered’) under the premium for a given health insurance policy that is paid by, or on behalf of the enrolled patient. ‘Covered’ means that some portion of the allowable cost of health service will be considered for payment by the insurance company. It does not mean that the service will be paid at 100%.


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