Here, James Cooper, sales director at expatriate insurance specialist William Russell, examines the inevitability of rising health insurance premiums and explains how, if they make the right decisions, insurance providers can make their premiums more sustainable for their clients.
As the end of the calendar year approaches, health insurers across the board undergo the process of establishing their premium increases for the forthcoming year. The seemingly ever-increasing costs of international medical treatment have rendered the announcement of these premium hikes as something of an annual event - an unfortunate yearly inevitability.
Even within the domestic market, managing the impact of these spiralling healthcare costs is a challenge grudgingly faced by all health insurers. Yet it is one that is certainly exacerbated for international providers, due to the wildly divaricating costs of healthcare globally, with variables including specific countries, regions, facilities and regulatory requirements amongst others. The widespread issue of high healthcare charges is a headache for all, not least the HR professional looking to ensure that expatriate employees have sufficient medical cover in place, within budget. So what can insurance providers do to combat the problem?
Initially, keeping premium increases controlled relies upon having a thorough claims procedure in place. International providers are required to demonstrate vigilance when handling claims, and exhibit a comprehensive understanding and familiarity with differing overseas claiming cultures.
Experienced providers know the importance of developing tried and tested claims auditing systems. The logic is clear - if bills can be scrutinised and challenged effectively, medical claims can be settled accurately and claim costs can be kept controlled. Insurers should always utilise their experience to negotiate effectively with providers to keep costs reasonable, customary and necessary - ensuring the claimant is not overcharged. However, it is crucial that this remains a staunchly 'behind-the-scenes' process, taking place without any compromise to the quality and care provided to the client.
This claims management needs to happen on a constant basis, but, in our experience, it has proven to be a worthwhile, mutually beneficial endeavour. As well as controlling costs, it also has the effect of helping to minimise fraudulent claims, thus ensuring premium increases for clients can be minimised. The key word is sustainability. Insurers must strive to take every measure possible to ensure premiums remain at reasonable levels into the future.
In the case of employee benefits specifically, this entails taking the time to listen carefully to the needs of the business prior to cover commencing. At this stage, insurers must propose a solution that meets these needs, addressing the individual requirements of each business - before pricing the policy in a considered, sustainable fashion.
Less experienced providers have been known to enter challenging international markets, inattentive towards fluctuating medical provider costs and prevalent claiming cultures. The competitive nature of these markets elicits flawed pricing policies, which leads to these providers falling fowl of aggressive market conditions and being forced to withdraw. Adopting a sustainable pricing strategy prevents this, which ultimately benefits the client - most notably their HR team, given the time, effort and risk associated with transferring insurance provider.
The rising cost of healthcare internationally is an issue of genuine concern for medical providers, insurers and clients alike. However, measures can be put in place to assist - so it remains vital that insurance providers acknowledge their responsibility to their clients by making the investment required to put the necessary mechanisms in place to prevent soaring premium increases.
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