Why is My Medical Insurance Getting Another +11% Increase this Year?
If you are an expat in Vietnam, one of the biggest expenses you will have is for world-class health treatment. However, you may have noticed that your medical insurance premium is getting an +11% increase this year. You are not alone; many expats are experiencing this same issue. In this article, we will explore the reasons why medical insurance premiums are increasing and how it affects everyone involved.
Inflation because it is good for us: insurer, hospitals and patients
When it comes to medical insurance, everyone wants to get the best treatment available. Insurers want to provide coverage for the latest treatments and procedures, while hospitals want to offer state-of-the-art facilities and technologies. Patients want access to the best doctors and specialists. However, all of these come at a cost, and the inflation in medical costs is driving up insurance premiums.
Insurers need to show growth to Wall Street or their investors
Unlike life insurance, medical insurance is based on an annual profit and loss calculation. Insurers collect premiums from clients for the year, pay the claims of all their members, and then the rest is their profit. If the premium is mis-calculated or underestimated, it results in a loss that is reported over the next year in the pricing. Therefore, insurers need to show growth to their investors, and that drives up premiums.
Hospitals need to show ‘sales growth’ to get paid what they are worth
Hospitals and doctors tend to charge the full price to the insurance company as they don’t feel guilty overcharging the patient, knowing that a bigger, anonymous and ‘rich’ financial institution is paying anyway. In Vietnam, an expat doctor’s visit averages $200 to $250 when the insurer includes the tests, imaging, and medicines. Hospitals want to offer the latest technologies and best facilities, but these come at a high cost, and they need to show ‘sales growth’ to get paid what they are worth.
Patients insured pay ‘enough to get the best’ that medical specialists, science, and technology can keep them healthy
Patients who are insured pay a high premium and, therefore, tend to use the best doctors and facilities available. As a result, inflation increases by scarcity. Excellent doctors are rare, and they are not cheap, especially with an expat lifestyle. Technology is also not cheap, and an MRI that can detect early cancer and emergency evacuation to the best neurosurgeon in Asia is costly. Therefore, patients insured pay enough to get the best that medical specialists, science, and technology can keep them healthy.
International hospitals import their doctors, machines, and latest medical equipment, genuine medicines and lab test supplies: no fakes allowed, some indispensable supplies are even taxed as luxury goods.
For a Vietnamese to consider Vietnam as a medical tourism destination, it is essential to have world-class facilities and treatment. Therefore, international hospitals import their doctors, machines, water treatment, electricity generators, and the latest world-class medical equipment. Genuine medicines and lab test supplies are used, and some indispensable supplies are even taxed as luxury goods.
Medical inflation by social and technology progress
With modern medicine, the world’s expat population gets better health monitoring, and seniors live longer. More treatments can cure past deadly diseases, and medical costs increase for new prevention, detection, procedures, medicine therapies, and longer life expectancy. As a result, life expectancy is now over 80, and senior recovery takes longer, resulting in longer hospital stays and rehabilitation periods that cost more to health insurers. Now, technology and pharmaceutical research and development to screen, test, and treat to detect early signs of sickness, like cancers, are released regularly.
Another factor that contributes to medical inflation is social progress. As society becomes more aware and accepting of mental health issues, there is a growing demand for mental health services. Insurance providers are now required to cover mental health services and treatments, which can add to the cost of insurance premiums.
In addition, as medical technology advances, more complex procedures and surgeries become available. While these treatments can save lives and improve health outcomes, they also come at a higher cost. For example, a heart transplant can cost upwards of $1 million, and an MRI scan can cost hundreds or even thousands of dollars.
Despite the rising cost of medical care, there are ways to mitigate the impact on your budget. One of the most important steps you can take is to carefully review your insurance policy and understand what is covered and what is not. Make sure you are not paying for services you don’t need or want, and consider a higher deductible if you are willing to take on more risk.
Another way to save on medical costs is to be proactive about your health. This means eating a healthy diet, exercising regularly, and getting regular check-ups and screenings. By catching health problems early, you can often avoid more expensive treatments down the road.
Finally, it is important to shop around for medical care. Prices can vary widely between providers, and you may be able to save money by choosing a lower-cost provider. You can also negotiate with providers to get a better price or ask for a cash discount.
Conclusion: take steps to manage medical inflation
Medical inflation is a complex issue that is driven by a variety of factors, including economic needs optimization, the need for insurers and hospitals to show growth, the cost of excellent doctors and technology, and social and technological progress. While the rising cost of medical care can be challenging, there are steps you can take to manage your healthcare costs and protect your budget. By understanding your insurance policy, being proactive about your health, and shopping around for medical care, you can help ensure that you receive the care you need without breaking the bank.