Why Does Your Expat Health Insurance Premium Go Up Each Year?

So this is the time of the year. You receive your health insurance bill and are frustrated to find that you need to pay more this year. As a matter of fact, health insurance premiums seem to increase so naturally each year that you may stop asking why. But have you ever wondered, other than inflation, what are the other factors that affect the cost of health insurance globally?

This article was written exclusively for Expat Network by Pacific Prime


Health insurance costs differently in various countries

If you are an expat jetsetter looking for comprehensive coverage to ascertain access to quality medical treatments no matter where you are, international health insurance policy is your top pick. However, what you may not be aware of is that the costs of international private medical insurance (IPMI) vary drastically in different countries.

Our annual Cost of International Health Insurance report has gathered data on insurance costs in 100 countries from seven global insurers to rank the most expensive countries for IPMI. Below is a simplified version of the results.

RankCountryAverage Cost – USD% of US Cost
2Hong Kong$12,92755.9%

As shown in the above ranking table, the average cost of international health insurance in 2018 ranges from USD 6,021 in Angola to USD 23,120 in the US, making a vast difference of 73.2%. As with previous years, the US and Hong Kong continue to be among the most expensive locations for IPMI.


What causes IPMI premiums to go up?

Among the numerous factors that affect the premiums, our team of experts has identified four primary trends and drivers that influence the cost of health insurance the most.

Increased demand for international quality private care

We observed that international health insurance is getting more common especially in developing countries. The maturing middle to upper class and aging population in these countries are mounting pressure on the local public healthcare system. They are also demanding more quality medical equipment and facilities, which are something the public sector may not be able to provide. As a result, more people turn to the private sector for better health protection.

The growing prevalence of medical tourism pushes up the demand for IPMI as well. It has become a norm for wealthy individuals to travel overseas to receive more sophisticated medical treatments. Singapore, for instance, is one of the hotspots for medical tourism in Asia.

Increased cost of healthcare

This is probably the single largest driver of health insurance premiums increase. The medical cost has been on the rise consistently for many years, and we believe this trend is not going to abate in the foreseeable future. We have also noticed that the overall cost of health insurance increases at a similar rate with the cost of healthcare.

Increased regulation

We have seen more regulation of either healthcare or health insurance in countries where IPMI plans are popular, such as China, Dubai, Singapore, and the US. These are two major types of regulations that affect the premiums the most.

Implementation of stricter insurance licensing

Some governments, such as China and Singapore, have implemented stricter regulations around licensing of insurers. These regulations require them to hold immense capital, comply with more requirements and execute extensive due diligence, so it is getting more expensive for insurers to enter the local market. In consequence, the insurers will shift the increasing operating costs to the policyholders by incurring premium hikes.

Implementation of mandatory cover

Dubai is the prime example of mandatory cover regulation, which requires local and foreign citizens to acquire compliant health insurance plans to stay in the country. Since compulsory cover also includes the most expensive types of care like maternity, cancer, and diabetes, should the population covered have more of these health conditions, the cost of healthcare will get higher, and the insurers will increase the premiums.

Continued challenges with fraud regulation

Health insurance and healthcare fraud have attributed to the rising premiums because insurers have to devote extra resources to detect and investigate the fraudulent claims. For example, insurers have been investing in data analytics tools and AI technology to identify any abnormal or inconsistent claim patterns. It is estimated that fraudulent acts, such as unnecessary referrals and procedures, misdiagnosing patients to justify additional costs and false claims for services, cost the insurance industry billions each year.


Check out where your country of residence ranks in IPMI premiums

If you’re curious whether the premium you are paying is expensive vis-à-vis other countries, you can download a free copy of our Cost of International Health Insurance report 2018 for complete ranking tables and full-length analysis. It is an essential read for anyone on the lookout for reliable data and digestible information on the international health insurance solutions.


Email Pacific Prime at info@pacificprime.com today, or visit www.pacificprime.com to get answers to any questions pertaining to insurance, a free quote, or a plan comparison!