Bridging the Gap in International Healthcare Benefits: The Emerging Market Perspective

A new perspective from the international benefits market

Private Medical Insurance (PMI) or Voluntary Health Insurance (VHI) has become one of the most popular health benefits that corporate employers in emerging markets offer to their workforce. International Private Medical Insurance (IPMI) emerged a long time ago, but it is still a relatively niche product, reserved to a rather narrow segment of the employee base. Primarily, this is due to the prohibitively high cost per IPMI policy. On average, the annual IPMI cover for an individual ranges from 3,490 USD in Angola to 9,818 USD in the US (Pacific Prime, 2017).

As a result, IPMI is typically reserved as a benefit for high net-worth individuals, expatriates (as per duty of care of the employers that relocate them) and higher levels of management, leaving the vast majority of the employees dependent solely on the offerings of the local healthcare system.

While IPMI plans provide very comprehensive coverage on a global basis, they might not necessarily be the best fit for some customer segments.

Of course, there are vast differences in the quality and availability of healthcare across all markets, which is why many people prefer to travel abroad for certain medical treatments. When it comes to innovative cancer treatments, for instance, the US, the UK, Germany and Singapore have become some of the most popular destination countries for patients from China, Russia, and the Middle East. The digital revolution empowered patients to inform themselves about possible medical treatments, a trend that employers have chosen to support.

Bridging the gap

One recent related trend is the unbundling of benefits, such as IPMI, allowing employers flexibility in choosing the most relevant benefits, and thereby bringing down significantly the average cost per employee. The novelty lies in customization: it is possible to dissect such plans to extract the benefits that the employees need the most, and further enhance the value proposition in those areas.

Modular health benefits programs take into account the different healthcare needs and lifestyles of employees. The IPMI remains a great fit for employees who live abroad and often travel internationally for business, such as management consultants, who spend long periods of time at the client's site and might live in several different countries throughout the year.

However, for mid-level managers of large corporations, who travel internationally for meetings or conferences every now and then, but usually only for short periods of time, an IPMI cover could be unnecessary. The same holds even more true for all employees who don't travel internationally, and traditionally their employer wouldn’t consider providing them with any type of international health benefits.

However, the unbundling of the international health insurance provides employers with a greater variety of options at their disposal. A large employer in China might, therefore, decide to change their health benefit offering by:

1. Continuing to offer PMI/VHI to all employees based in China, to reduce copayments and provide options beyond the public healthcare system.
2. Limiting IPMI to employees stationed abroad for extended periods of time in order to allow them access to healthcare in their places of residence, in the home country and during international travel.
3. Providing comprehensive business travel insurance to employees based in China that travel internationally and might require emergency care while abroad.
4. Offering for the first time access to international healthcare for all employees, through a very affordable overseas critical illness treatment insurance, which will provide cover for planned care abroad when they might need it most.

Overall, such a modular approach might offer them a better, more customized level of coverage that matches the individual employee lifestyles and results in cost savings for the employer and greater appreciation and loyalty among all employees.

Product and service innovation is urgently needed to bridge the global healthcare gaps - people need access to treatment, regardless of where they live or where the best treatment for their condition may be.

Previously, the privilege of medical treatment abroad was reserved for those with IPMI or with sufficient funds to pay for treatment out of pocket.

By unbundling IPMI, we can provide international treatment coverage to the "masses" by focusing on areas where the gaps between local and international care are most visible.