- It’s important to understand all factors relating to the medical insurance premium you pay so you can make the most informed decision about your insurance policy.
- Health insurance is now mandatory in some regions of the UAE such as Dubai and Abu Dhabi.
In the past, many people previously have just paid ‘as they go’ for their healthcare as they saw purchasing insurance as an unnecessary expense. However, having health insurance helps you contain the amount you spend on looking after yourself and your family, as well as protecting you from unexpectedly high medical bills should someone become seriously ill. When considering health insurance policies, it is essential to understand how premiums are calculated and how you can reduce the amount you pay.
So, what influences medical insurance costs?
Aside from your health, several factors influence the amount you pay for your medical care.
Gender vs. Age
Both gender and age will influence the amount an insurer will charge to cover each individual on the policy. For example, a woman of childbearing age is much more likely to make a claim for childbirth, and any conditions that the newborn may have, than a woman in her late 50’s. This cost does not apply to men in the same age bracket meaning a healthy 25-year-old male is likely to have a lower insurance installment than that of his 25-year-old wife.
However, as we age our bodies are naturally more prone to wear and tear and therefore require medical intervention. So, although premiums may see peaks and troughs depending on the age and gender of the insured, both men and women will see an increase in their premiums as they grow older.
The introduction of mandatory health insurance
The introduction of the health insurance law in Dubai saw a change in the health insurance whereby policies on offer must meet the requirements set out by the health authority.
This change in the provision of healthcare insurance had a knock-on effect on health insurance premiums for several reasons:
- Firstly, providers were exposed to a more significant number of potential claims as the number of people now covered under mandatory insurance increased. Lack of historical claims data for those previously uninsured meant that there was some uncertainty in exposure for the provider, so they factored a buffer into their premiums calculations to allow for this.
- Secondly, insurers, and the insured, previously had the choice to choose to cover for pre-existing conditions (pre-ex), and the new provision means that this is now mandatory under the policy schedule.
Insurance was intended to cover the risk (cost) of unforeseen medical conditions, once a person has a pre-ex condition they are more likely to claim for this again, and therefore Private Mortgage Insurance (PMI) providers need to cover the costs of claims that they know are more likely to be submitted.
A prime example of this is diabetes, which would have been excluded from cover unless there was a chronic flare up that requires immediate medical attention to prevent a further deterioration in the patient’s health. The International Diabetes Federation (IDF) revealed that, in 2017, 17.3% of the UAE population between the ages of 20 and 79 have type 2 diabetes, with the UAE also seeing a faster increase in the prevalence of diabetes than other areas of the MENA region. This trend looks set to continue in the near future, so insurance payments will most likely be inflated to cover this.
Healthcare professionals influence premiums in their ways such as over-prescription of medication and requesting unnecessary tests. Patients may also unwittingly increase their premiums by going straight to specialists instead of their general practitioner or visiting a hospital when they only needed to attend a clinic. In both cases, higher fees than necessary would have been charged.
Overuse of medical care
As mentioned previously, healthcare legislation in the region changed with the rollout of the new law. This means that individuals who were previously uninsured and were paying for medical costs themselves are now more likely to visit the doctors for non-emergencies than they would have already.
Medical inflation varies by provider and is influenced by several factors in the local economy. According to Pacific Primes latest IPMI inflation report, Dubai recorded the highest average premium inflation in 2017 at 9.6% compared to the global percentage increase of IPMI premiums was 7.0%. The reports also state ‘we have seen an increased demand for health services due to the increase in the number of residents covered. This will result in higher premiums.’
Science and technology are continually providing us within insights into the human body, how we can cure or prevent disease, or treat conditions more effectively. Both diagnosis and treatment are becoming more reliant on technology and being at the leading edge of medical advancement hospitals, and clinics are heavily investing in the expensive technology used in fields such as imagery (MRI and CT scanners).
How can I decrease my medical insurance premium?
Aside from looking after your health, there are many ways you can reduce the amount you pay for your health insurance:
- Increase your deductible. Essentially the deductible is the amount you pay ‘out of your own pocket’ before your health insurance starts to cover costs, so by paying a higher deductible you can reduce your premiums.
- Co-insurance. This is how much you will pay for your care once you have met the deductible. It is generally represented as a percentage, e.g. 80/20 which means you pay 20% while your provider covers the rest.
- Go ‘in-network.’ Health Insurance companies will work with chains of clinics etc. to agree a preferential (lower) rate that they charge for their services. So, by going in-network, you are getting medical care at a lower price and therefore ‘cost’ less regarding your claims.
- Shop around. The market is highly competitive, and it is now easier to find a health insurance policy at a lower cost than you are currently paying. Aqeed, a leading insurance agent in the UAE provides you with a comparison service making it easy to compare several quotes at any one time, so you can plan as to what is the right policy for you.