_____________________________________________________________ The
Journal
Publication Date: June 2002. Feature Story. Page: 30
The Right Scheme
There are lots of choices when it comes to health insurance schemes that are affordable and effective. Of course, always check the fine print.
By Mindy Harris “Always wear clean undies, just in case…” To that fundamental advice your mama should have added: “And always, always read the fine print on your medical insurance.” Watching paint dry may be more fun, but failure to read the ream of 6-point type in your medical policy can result in much worse than momentary embarrassment in the emergency room. Didn’t realize mountain climbing was considered an extreme sport? Hadn’t occurred to you that western Nepal was a war zone? Never realized that taking your asthmatic son to emergency would not be covered? Spend a day—heaven help you!—reading medical insurance policies and you will find dozens of loopholes that could leave you up the proverbial creek.
Are you sure you’re not up the creek?
If you’re here as an expatriate, chances are you have good coverage (but have you read your policy?). But what if you work for a smaller foreign outfit or a Japanese firm? Or what if you are here on your own steam? The easy answer is to trot down to your local ward office and spend five minutes enrolling in kenkou hoken, Japan’s national health insurance. We did just that for our first stint in Japan. But moving back here, this time with two kids in tow, we were determined not to make the same mistake.
Can you escape it?
Monthly premiums depend on your income, but if you’re earning a decent salary you’ll quickly find yourself paying the normal maximum of ¥63,600/month. And what do you get for all that money? You still pay 30% of the cost yourself. You are only covered in Japan. And if you decide that’s a raw deal and try to unenroll, your ward office will inform you that you can’t. Moving to another ward and forgetting to re-enroll is usually the only way out of the system. What concerned me most about kenkou hoken was that it ties you to Japan’s medical system. Instinct told me that in case of serious illness, I wanted to go straight home. Learning more about Japan’s medical system cemented that.
What’s wrong with the system?
I always knew about some of the negatives in the Japanese medical system like kusurizuke, the rampant, fee-driven over-prescription that results in 2% of humanity consuming 16% of the world’s pharmaceuticals. And I once visited a friend with a mysterious stomach ailment who was cozily tucked into bed beside a patient just out of heart surgery. In researching this article, I was truly shocked to discover how poor the quality of care can be in many hospitals here. “Japanese hospitals have huge overcapacity and no incentive to get people well and out of the hospital,” says Mark Colby, president and CEO of IMA, a medical accreditation firm. “The average stay in a hospital in Japan is 27 days versus 3 to 4 in the U.S. and 4 to 6 in Europe.” And there’s nothing more dangerous for your health than being in a hospital. Dr. Arne VolstrupPetersen, chief regional representative of International Health Insurance danmark s/a (IHI danmark) does not mince words: “Primary care versus other OECD [Organization for Economic Cooperation and Development] countries is very substandard. People die because of lack of hygiene. You could easily end up in a surgery where a doctor has not washed his hands. ICU [intensive care units] wards are filthy and packed with dangerous bacteria. Even the Ministry of Health [Labor and Welfare] acknowledges that the screening of donors for blood stock in Japan is grossly inadequate. Blood stock in Japan is often tainted with hepatitis B and C, and a transfusion means a definite risk for viral infection, rampant in Japan. If the treatment involves surgery or blood transfusion, we prefer to get people out of Japan if possible.”
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The Right Scheme
But aren’t there good doctors in Japan? “Yes, there are some very skilled doctors in Japan,” says Dr. Volstrup-Petersen, “But doctors are not required to do regular professional training.” IMA’s Colby agrees that there are very good physicians here, but that it’s hard to know who is and who is not good. “You need to ask questions. For example, a doctor in the U.S. needs to put in 250 pacemakers a year to maintain his accreditation,” he continues. “But you might find your surgeon here put in [only] seven last year.” Convinced? I was. When searching for a private insurance policy, we had treatment outside Japan as an option to be paramount. Here’s what else was on our list:
What do you need?
Comprehensive insurance. We’re a family with two young children. Who knows what could happen? We don’t just want inpatient coverage, though we can cover some outpatient visits ourselves. Emergency dental care. This can cost a small fortune. But we all have good teeth, so a routine dental plan won’t be worth the cost. Cover for pre-existing conditions. Every company’s underwriters have their own way of looking at these, but the definition normally includes any symptom or condition that can be linked to a previous accident or illness. Our preference is a company that will cover pre-existing conditions from day one once they’ve reviewed the details of our medical history. Maternity. Just in case, we want maternity and newborn coverage. Deductible. We’ll definitely take one to keep the costs down. Some companies apply this to per illness/accident. Unless it’s very low, we want a plan that applies to us per person or per family, so we know how much we’re in for. Claims. We want prompt payment, preferably directly to the doctor, hospital or clinic. Responsiveness. We want a 24-hour help-line and quick, complete answers to our questions. Payment of premiums. It’s nice to pay quarterly, if it doesn’t cost too much more than annually. And the premiums for our young children should be inexpensive or automatically covered because the adults are. Application form. Some insurance companies merely want to know your name and credit card number. But giving details of your medical history is the only way to make sure the pre-existing conditions clause doesn’t trip you up, so we’ll go through the exercise. Insurer. We want a solid company that’s been in the business for a long time and that is going to be around as long as we are. And the more experience they have in Japan, the better. Exclusions. If you like to live on the edge in any way—that means you go heli-skiing or drive race cars, or you’re a journalist in a war zone—most policies will not cover your injuries. Ditto if you happen to be an innocent bystander when a bomb goes off. Renewal. We want a policy that cannot refuse to renew us because we were too expensive the previous year. And we only want to read all this fine print once, so a policy that will cover us as we get older without costing the earth after age 60 is sought.
Help sorting through the fine print?
Bad news is there isn’t any help. You have to read it yourself. And probably ask for it too, since it’s not on most Web sites. Don’t rely on your broker or the human resources department because, amazingly, you may find that they have not read it themselves. Every broker I questioned learned something new about the policies he was selling after I asked for clarification. “Aha,” says William Cole, vice president of an awardwinning International Medical Group, Inc. (IMG) broker, “I see it now and that’s a very good question. So good, you stumped me.” Nonetheless, a broker who works with these companies everyday can be an invaluable source for finding out about claims service and responsiveness. “Global’s policy says they won’t pay for claims not submitted within 30 days,” says Chris Cleary of Banner Japan K.K. “But they usually will still pay if you submit the claim in a reasonable amount of time. And they know that it can cost ¥5,000 and take two hours to get a hospital to fill out a claim form, so they will work with the receipts themselves.” Cleary says they dropped Allianz AG “because they were hopeless. We still have questions they never answered. And Medicare was slow and obstructive on claims.” Banner Japan finds ExpaCare Insurance Services, a division of Jardine Financial Consultants Ltd. and a member of the Jardine Lloyd Thompson Group, “a little slow, too.” We couldn’t have learned any of this ourselves, no matter how much time we spent with the fine print.
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The Right Scheme
How they stacked up
BUPA Insurance Ltd. (www.bupa-intl.com) They have a great reputation in the UK, and British expats just love this policy—but we couldn’t figure out why. They will cover sports injuries, but they will not cover any pre-existing conditions period. Only their Gold plan offers emergency dental, and it’s very expensive. ExpaCare Insurance Services (www.expacare.net) Routine dental to about $1,000 and some coverage for complementary medicine are nice features, but make sure you don’t have a premature baby, or need a pacemaker or prosthesis. No age limit, but premiums go up quickly as you get older. They require doctors to complete claim forms, the cost of which can quickly eliminate the benefit of the low deductible. Global Healthcare Ltd. (www.globalhcare.com) With a toll-free line in Japan, they are serious about this market. Banner’s Cleary says they settle claims in a week. Comprehensive cover with lots of extras thrown in: travel insurance, hospital cash and some total disability coverage. Unlike most policies, you can cancel it mid-year and get a refund. But if you want them to cover you for elective treatment in the U.S., premiums are very high. Plus, they won’t cover you past age 69 and premiums really escalate as you approach that. Goodhealth Worldwide Ltd. (part of The Primary Group Ltd.) (sales@goodhealth.com.hk) The ability to select various modules and choose a high deductible can really drive down the cost with this one. Good reports on claims handling and responsiveness. But bizarrely, they only cover emergency dental if you complete the treatment within seven days of the accident. And nowhere in their literature could we find reassuring information about who they were backed by. International Health Insurance danmark s/a (www.ihi.dk) Less ifs, ands or buts than anyone else. Once they insure you, they do so for life—anywhere in the world, with no lifetime limit. The tricky bit is that they have a myriad of different policies priced in U.S. dollars, Swiss francs, Danish kroner, Euros and the like. All provide 100% for inpatient coverage, but outpatient coverage differs and sometimes you have to take out a separate module to cover drugs, dressings and the like. With a similar deductible level, we could pay between $5,000 and $8,700. Much as we love fine print, even we had a hard time sorting out the apples from the oranges. International Medical Group, Inc. (www.imglobal.com) Solid company providing worldwide coverage at a reasonable price and a high deductible that can drive the cost down. They paid out $40 million in claims last year and haven’t increased premiums for almost five years. But they were the strictest underwriters we encountered. One person told us IMG insisted on giving him a physical. And they told us they would not pay more than $5,000 a year if anything related to an illness one of us had more than 20 years ago happened. InterGlobal Insurance Services Ltd.’s Health Care Ultracare Plan (www.interglobalpmi.com) Good comprehensive coverage may be worth looking into, especially since they only charge you for one child. But for us, it was a non-starter because maternity was a separate module that would cost us over $2,000 a year on top of our family premium of over $6,800.
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The Right Scheme
Multinational Underwriters, Inc.’s International Citizen Series (www.mnui.com) Comprehensive worldwide coverage is at a reasonable price and very responsive. One of the few that cover routine physicals. Senior citizen plan available after age 75 if they’ve been insuring you all along. Like IMG, they have this annoying clause that won’t cover the cost of the emergency room if you go there for an illness and are not admitted. Even their staff agree it’s a conundrum, but say there’s nothing they can do about it. Morgan Price International Healthcare, Ltd. (www.morgan-price.com) This policy is probably a dream to sell: coverage for complementary medicine, routine dental and optical care, and the price isn’t much different. But there’s a £15,000 lifetime limit for chronic conditions and no coverage for organ or bone-marrow transplant or AIDS. William Russell Ltd.’s Global Health (www.global-health.co.uk) Even weirder than Goodhealth, this one only covers emergency dental if you have the treatment within 48 hours. But they do have a plan that covers you for 30 days in the U.S./Canada for elective treatment. May be a good compromise if you want to keep costs down while still maintaining the option for some treatment in North America.
Loopholes
A few of the most common: • “You had a CAT scan without telling us in advance? Sorry, you’ll have to pay for it yourself.” Most plans require you to get pre-approval for surgery or expensive tests. Communicate, communicate. 24hour help-line staff are just waiting for your call to alleviate the boredom of a long night shift, so help them out. Don’t take a chance: always call ahead. If this brings visions of frantically trying to make a call from a cell phone in an ambulance, don’t panic—insurers don’t expect you to delay treatment if you are in an accident, but do call them, or have someone else do it, as soon as possible. • Okay, so two years have gone by and you can breathe easy because those pre-existing conditions of yours are covered. Or are they? Some companies require you to formally apply to have these covered, and it’s in the fine print so they can deny your claim if you don’t. “It’s been more than six months since you had this treatment. Sorry, it’s too long ago to cover it.” If you don’t send receipts and claim forms in promptly, you could end up footing the bill yourself. And most insurers will not pay fees for doctors and hospitals to complete claim forms. One more thing: don’t lie on your application form. If you conveniently forget to mention that you had a polyp removed two years ago and you need another one removed, you may quickly discover that you are paying for it yourself.
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Insurers can be good guys, too
While there are plenty of loopholes to look out for, we were pleasantly surprised to discover that some health insurance companies believe in supporting the spirit of their products and will occasionally look beyond the fine print to meet their clients’ needs and the lofty aims their brochures proclaim. “I have had claims paid that IMG clearly were within their rights not to pay,” says Cole, an IMG broker. “One instance, the employee had not satisfied a waiting restriction on maternity—IMG paid the claim and all of the prenatal care.” And when asked if he had ever had people go over the annual limit of around $1 million, VolstrupPetersen of IHI danmark says, “Rarely, but the cases I can think of were neonatal care in the U.S. and we went over it.”
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The Right Scheme
So what did we decide?
For our needs, it came down to a choice between two policies: Multinational Underwriters’ International Citizen Series (ICS) and one of the IHI plans. Both offered: • worldwide coverage, including maternity (after one year) and elective treatment in the U.S. • coverage for pre-existing conditions • very responsive service • free coverage for children until age 10 ICS had more limits and exclusions, but were also less expensive by at least $1,500 a year. But in the end, we decided we’d sleep better with IHI danmark, and here’s why. My husband and I may be expats for many years to come, so lifetime coverage where premiums don’t escalate hugely as we age is a big plus. IHI danmark’s top bracket starts from age 60. IHI danmark has representation in Japan, and knows the ins and outs of the hospitals here and the skill levels of individual doctors and surgeons better than we do. They are more likely to fly us out of Japan in the event of serious illness or if surgery is required. Now, we just have to fill out the application form. After having gone over the fine print in the policy, this should be a breeze. Mindy C. Harris is a certified financial planner who lived and worked in Japan from 1985-1993. She has recently returned with her husband and two children to live in the wilds of Boso-hanto.
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