Why have Medical Insurance?

The most common reason I hear from people who do not have medical insurance is that if they got seriously ill they would fly back to their home country and get the treatment there. Unfortunately, the developed world, where universal medical care is provided is a bit strapped for cash at the moment and so want to make sure you are really resident in their country before providing treatment. In the case of the UK, you need to be resident for 3 months before you become entitled to free treatment under the NHS.

The other objection I hear is that they would use one of the many Government hospitals here in Dubai if they needed treatment. In fact, if you were involved in a car accident or other emergency this is where you would be taken, regardless of whether you had private medical insurance or not. These institutions are best equipped to deal with the trauma cases our roads throw at them on a daily basis. However, contrary to popular belief, treatment is not free and you will be presented with a bill at the end of your stay. Whilst the Government hospitals are very good at providing emergency medical care, you may wish to spend the recovery phase in better surroundings.

So, what are the options?

There is no compulsion on employers within the Emirate of Dubai to give their employees or their dependents medical insurance. This has been discussed for years but nothing has been announced to the industry for consultation as at the time of writing (November 2013.)

Medical Insurance is divided into three geographical areas where elective treatment can be given: regional (e.g. GCC), worldwide excluding elective treatment in USA and Worldwide (ie. including USA.) So if treatment for your illness or condition was not available locally you could go to your home country to have treatment if your plan provides Worldwide excluding USA cover unless you are American in which case you’d need Worldwide.

The types of cover are also split into three: inpatient only (ie. you need to be admitted to hospital before the plan will pay), in and outpatient cover (which usually includes treatment by a family doctor) and comprehensive cover which often includes routine dentistry, maternity benefits and sometimes cover for eye tests and preventive medicine such as inoculations.

The factors that influence the cost of your medical treatment are: your age (as we get older the cost goes up), what level of cover you want and where you would like to receive treatment as the cost of medical treatment is different in different parts of the world.

What is not covered?

No plan covered everything and no two plans are alike and so assessing the merits of each plan is a difficult job No plan for private individuals that is currently on the market will cover you for pre-existing conditions in any meaningful way, so if you have just been diagnosed with a terrible disease and you think you’d better get some insurance because it is going to cost a lot of money, it is already too late.

The cost of medical insurance can be substantial but nowhere near as expensive as not having any in the event of a claim. The cost can be reduced by agreeing to pay part of each claim called the excess or deductible.

I hope the above is helpful and next week I’ll look at an investment idea.