For some countries, health is a real business. Indeed, when comparing the costs of an MRI in the Netherlands and the United States, the difference is striking: $200 (euro equivalent) for the Netherlands compared to $1,500 in the United States. According to a report by the Organization for Economic Co-operation and Development (OECD), the various countries would have to review the coverage of health, without this, the costs should explode by 2050-2060. Also, the second factor of this medical inflation is the aging of the population. Indeed, health expenditure increases with age, which generates a certain cost.
Consequences for international insurance
If costs in the medical sector increase, the insurer is forced to pass on its prices upwards in order to be able to continue to cover the needs of its policyholders while remaining profitable. In addition, the cost of health expenses for expatriates can be higher because they have different requirements from those of local populations. They often expect services, even medical skills in line with their country of origin. However, it is possible to act on health costs. Sometimes, some international health insurers form partnerships with local insurers, offering their customers a network of health professionals who are just as competent but more accessible in terms of cost. In addition, some insurances reward customers who have taken a responsible approach to health spending.
The Tower Watson study (an Anglo-American multinational risk management, insurance brokerage and consultancy company), which analyzes the medical inflation rate of local populations, is taken as a reference in the absence of a specific study concerning expatriates. Since 2009, international medical inflation had generally been on the decline. In 2020, it had even reached its lowest rate with only 5.88%, a change which was foreseeable given the pandemic which plunged several countries into more or less strict confinements. The figures for 2022 are not yet up to date, as the year is still in progress, but for the year 2021 medical inflation had reached 8.12%, which represents an increase of 2.24% in just one year.