I’m angry and bewildered, and I’m not alone. The cost of medical insurance keeps increasing, and options for we older expats in Bali are shrinking with every year we age.
I went shopping for medical insurance a few years ago as a resident of Indonesia, aged 64, in robust health and with no pre existing conditions. I had just discovered (not from them) that my Singapore-based insurer of 25 years planned to ditch me at age 65. After much research and several interviews with an advisor, I selected a package from a British insurer. It was affordable then but the premiums have been increasing at 25% a year.
The Government of Indonesia requires retired KITAS/KITAP holders to have private medical insurance and indeed we should, but it is becoming unaffordable. The government program BPJS is only available to working KITAS holders and those married to Indonesians. Most local insurance products are designed for the local market based on costs here and usually do not cover evacuation or, if they meet our needs, are expensive. Some local insurers like Asialife offer affordable products with fewer benefits. We need to compare carefully, decide what’s important to us and what coverage we can live without.
Medical insurance is a profit-driven business like any other and we elders are not a good business risk. We fall down and break things, need our joints replaced and arteries stented.
Many insurers won’t accept new clients after the age of 65, a few accept clients to age 70 and one will accept new clients to age 79; once you are on a plan it usually continues to end of life. The premiums with nil deductible after 65 are very high and increase at 5 year intervals.
I spoke to my insurance advisor Nick Hayes, who represents 16 insurance product providers in Indonesia. He’s seen a marked trend in the past few years of expats aged 65 and over downgrading their policies, reducing their benefits and taking on more of the risk themselves. “On average, a 70 year old will pay between US$5,000 and $16,000 a year nil deductible for inpatient care only,” he told me. “More are electing to have outpatient procedures in Asia where they are more affordable.”
By reducing benefits and increasing the deductible to the maximum $5000, premiums can come down to under $3000 if you’re under 70. After that, it’s going to be $5000 and up up up each year.
One of the reasons for high premiums is the ‘Bali Effect’ or higher costs associated with going to Singapore for treatment instead of the cheaper options in Thailand or Malaysia. This of course drives up costs for the insurer and increasingly, insurers try to save money by insisting that we have treatment in Indonesia instead of overseas. Yes, we have lots of shiny new hospitals with impressive hardware in Bali and Java now. But the software has not improved much; the standard of medical care still lags behind that of Thailand, Singapore, Malaysia and India, though it is highly priced. (Building modern hospitals is extremely expensive; when they started appearing in Bali, doctors began to apply international rates.). Because of the Bali Effect some insurers increase premiums of people living here, which is why my premiums have been increasing at 25% a year. Most medical insurance increases at 8 – 10% a year.
I spoke to Richard Flax, Managing Director of International Global Health. A long time Bali resident, Richard has witnessed some horrendous shortfalls in medical insurance and care over the years. He has a good understanding of what happens when things go wrong in Indonesia and has become an expert in evacuating patients when specialist care was needed. In 1990 he approached Australian medical insurer International Global Health (IGH) with a proposal to provide an insurance package specifically tailored to the needs of expats living in Indonesia. After much negotiation he created a package called ‘Sapphire Go Anywhere’, which is designed to help us through the major medical crises in life. Its premiums can be discounted up to 70%, with an extreme deductible of $15,000.
Not everyone has $15,000 under the bed, but Richard points out that if you are paying high premiums at the present you will soon be able to save it. The package accepts new clients up to the age of 70 at present, though Richard is negotiating this with the insurer to extend that. With the $15,000 deductible my premiums would be $3992 now, $5000 at age 70 and $6000 at age 75 not including inflation. Annual premium increases average 6%. This plan includes ongoing chronic illness cover which most other plans do not. Richard has offered a group discount of 10% if three or more people quote the Bali Advertiser when applying, so be sure to mention this column if you decide to insure with them.
Legality is becoming an issue. As with so many situations in Indonesia, buying medical insurance is something of a grey area. On paper, medical insurers and brokers should be legally registered here in Indonesia, but they are only allowed to sell Indonesian insurance products. International products are still being sold here but this grey area, as we well know, could someday become black and white. When that happens, our options will shrink again. Of the international insurers, International Global Health and William Russell are legal entities here because they are underwritten by Indonesian companies.
Like so many others, I downgraded my coverage this year to keep it affordable. Nick is very knowledgeable about the different insurers and together we explored my options. I still have some wiggle room since I’m not yet 70, when most insurers won’t accept new clients. I decided to stay with the same insurer but went from the Standard Plus plan with a deductible of $1,000 to the Standard with a $2,500 deductible. So instead of paying $4306 I will pay $3206 next year. I’ll probably stick with this plan until I am 69, then seriously consider moving over to International Global Health with its 70% discounted plan and $15,000 deductible.
But I’m really angry about this. If I may express myself inelegantly, medical insurers have us by the short hairs. Ours is a growing demographic and some of us have many healthy years ahead. Who is going to be the innovator in this constipated industry, finding affordable ways to protect us in Bali as we lurch through our 70s and 80s and possibly 90s?
One friend with a pre-existing stomach condition and a cancer scare has been healed with Chinese Traditional Medicine. Others are using nutritional therapy, yoga, pilates and other alternatives to treat inflammation and manage scoliosis and degenerative disc disease. Increasingly, we need to look outside the box, especially when the medical industry has a vested interest in delivering surgical and pharmaceutical interventions that may not actually be required.
I’ve read that we incur half of our lifetime medical expenses in the last 30 months of life. But who knows when that will be? A medical insurer has to assume it could be any time after 65, but my DNA indicates that I probably have another 25 or 30 years. Who knows what the premiums will be when I’m 80, still going strong but unable to afford insurance? And why am I paying the same premiums as a smoker?
So here we sit on our rock, looking at the hard place, with our silver hair blowing in the tropical breeze. Stay well.
The Boomer Corner is a column dedicated to people over 60 living in Bali. Its mandate is to cover topics, practicalities, activities, issues, concerns and events related to senior life in Bali.
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