QUESTION: I need a health insurance plan for my family. There seems to be so few choices locally. Can I get coverage overseas? Would you suggest this course of action? What are the risks if I were to choose this option? Can those risks be avoided? Finally, do you have details about any overseas plans and their costs?
S.T.J., Kingston 8.
Answer: The local health insurance market of today is like the telephone market of the past. Demand is greater than supply. Prices face little or no competition. As a result, coverage is beyond the reach of the average person. Less than 20 per cent of the population is insured. Service is non-existent. Customer-insurance-provider contact is very limited. Service centres (open 24 hours per day, in some cases), now the norm with phone service providers, have not been invented as yet in the health insurance business! All but the biggest consumers get the same one-size-fit-all product/service. This is not much different from phone utility customers in the old days who all received 'plain old telephones'.
BUYING ABROAD
There are no laws against buying insurance abroad. Rule 143 (1) (d) of Part XIII of the Insurance Regulations, 2001, states "that it [the rule] shall be liberally construed and ap-plied to promote its underlying purposes." One of these aims includes "providing a system through which persons may purchase insurance from unregistered insurers" Unregistered entities are not licensed under the Insurance Act, 2001. So, in spite of the JMA's 'Buy Jamaican, Build Jamaica' campaign (which refers to quality goods), there is nothing to stop you from buying an overseas health plan.
LOCAL PLANS ARE NO MATCH
Overseas plans are cheese to chalk when compared to local plans. The former are flexible, offer add-ons to suit individual needs and often provide options to reduce premiums, unlike local plans that are very rigid. Some of the benefits of foreign plans include:
Worldwide coverage.
Emergency medical
evacuation.
Physical therapy
Chemotherapy and radiology.
Prescription drugs.
Inpatient/outpatient treatment.
24-hour assistance.
Physicians' services and office
visits.
Policy limits are stated in
foreign currency.
There are, however, some drawbacks to buying foreign plans. Some of the insurers could turn out be rogues. They are quick to accept your money but find every excuse not to pay when claims arise. Secondly, they could have 'black holes' in their balance sheets.
This would cause them to run in trouble at the same speed that Parmalat did. These risks can be largely avoided. Ignore insurers that are not rated by agencies such as A.M. Best and Standard & Poor's. Apply the following rule: the higher a company's financial strength rating, the better is its reputation and ability to pay claims.
The other minus is that the overseas insurers will not accept payment in local currency. This means that unless you have a stream of income in U.S. dollars, for example, you could find it difficult to pay the premiums.
The premium for a family plan along these lines for someone in my age group would be equivalent to the price (in Jamaican dollars) to the price of a 'deportee' or $500,000 per annum. Of course, if you are younger, the cost would be much less. There are literally thousand of companies on the Internet that offer health insurance services. Because of this, there is simply no reason to stick to the local evils. If the veteran talk-show host is correct, our leaders have set the example.
Cedric E. Stephens provides impartial advice on risks and insurance. If you need free information or advice to
solve a problem, write to
The Financial Editor or,
contact Mr. Stephens directly at aegis@cwjamaica.com.
