Jan
12
Cigna and US Physician Group to Launch New Health Care Initiative
Filed Under CIGNA, USA Health Insurance | Leave a Comment
US health insurance giant CIGNA Corp. is launching a new collaborative medical care initiative with a New York-based physician group that aims to deliver improved medical access and outcomes at reduced cost for members and will work in a similar manner to the accountable care organizations outlined by the Obama Administration’s health care reform law.
Accountable care organizations, commonly referred to as ACOs, were introduced as part of the Patient Protection and Affordable Care Act in 2010. ACOs function as patient-centered networks of private healthcare providers that all agree to be made accountable for the overall care of their health plan members in exchange for additional compensation if they are able to improve health outcomes and reduce medical expenses.
On Wednesday, CIGNA announced that the Weill Cornell Physician Organization would be their partner in what will become the first accountable care initiative in New York that encompasses both a health plan and a physician organization. The move follows the establishment of a similar collaborative initiative between CIGNA and independent physician group Partners in Care in New Jersey last month. Nationwide, the Bloomfield, Connecticut-based health insurer is now running 11 accountable care programs across 10 states, with patient-centered initiatives now encompassing more than 170,000 Cigna policyholders and 1,800 primary care physicians. The insurer also participates in six multi-payer medical home initiatives across the USA.
According to a press statement released this week by CIGNA, the goal of all these ACOs is to ultimately provide a better service for policyholders through improved access to care and better coordination between medical providers. The statement outlined the company’s “triple aim” of raising member satisfaction, improving health outcomes and reducing the overall cost of medical care. Those who are already covered by Cigna and use Weill Cornell primary physicians will not need to do anything to receive the benefits of the program.
Under this new collaborative program, all nurses employed by Weill Cornell’s 71 primary care doctors will serve an additional role as clinical care coordinators for CIGNA policyholders. These registered nurses will use the patient-specific data provided by the health insurer to identify and reach out to patients discharged from their hospitals who might still be at risk for readmission, overdue for an important health screening, or someone who may have simply missed a prescription refill. These care coordinators will also work to help patients schedule doctor appointments, provide them with appropriate health information, and refer individuals to CIGNA’s disease and lifestyle management programs, the statement said.
Dr. Alan Muney, CIGNA Chief Medical Officer, declared in the statement that these programs were working to transform medical practices nationwide by changing the payment system to reward for quality and outcomes rather than pay for volume. “We believe that initiatives such as this will help transform the way medicine is practiced in the United States from a system that’s focused mainly on treating illness and rewarding physicians for volume to one that’s patient-centred and emphasizes prevention and primary care. We’ve already seen very promising early results in locations where we’ve implemented this type of program, and we believe these initiatives ultimately will lead to a healthier population and lower medical costs,” Muney commented, saying in addition that CIGNA has planned to continue increasing the number of such patient-centered initiatives nationwide throughout 2012
Weill Cornell’s chief contracting officer, Dr. Michael Wolk, was on hand to confirm the sentiment. “Providing value-added, patient-centred health care is our number one priority. We look forward to collaborating with Cigna to deliver the right care at the right time in the right place,” Wolk said, adding that patients that have needed greater help and communication in managing their chronic conditions, including diabetes and heart disease, would be the most likely to see the immediate benefits of the program.
This collaborative accountable care initiative between Cigna and Weill Cornell demonstrates perhaps the steps now necessary for health insurers and providers to encourage greater patient participation with healthcare professionals while keeping costs manageable. Health insurance in the United States has been primarily provided through private sector employers, who bear a large portion of the nation’s healthcare costs. In times of limited economic growth it has thus become increasingly important for those involved in the country’s health system to find a model that can lower costs while maintaining and improving overall employee health and productivity. Added to this has been the continued fervor over the Obama Administration’s upcoming healthcare reforms. Under the Patient Protection and Affordable Care Act (PPACA) nearly all American citizens will have to carry health insurance by 2014 or else face a fine. The US Supreme Court has agreed to rule on whether the United States government can make its citizens engage in such commerce, with their verdict likely to be a critical issue in the run up to the country’s general election in November. The individual mandate, if deemed legal, will put the US insurance industry in a bind, with insurers having less control over whom they cover, which is predicted to drive up their medical expenses and drive down profits. Many insurance companies are therefore deciding look outside the country in order to offset the relatively low premium growth forecast in the USA.
Indeed, Cigna has proven to be one of the more proactive American insurers looking to develop their footprint in overseas markets. As BRIC economies in particular continue to grow, Cigna plans to be at the forefront with an aggressive strategy to take advantage of the increasing demand for insurance and savings solutions in these countries. Industry analysts predict Cigna’s international operations could grow to become a third of the company’s total business within the next three to five years.
Insurance Company Mentioned
Cigna
CIGNA Health Insurance is a global health service company dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world.
Oct
26
Industry Consolidation and High Prices Pose Concerns for American Health Insurance
Filed Under USA Health Insurance | 1 Comment
American consumers who have noticed the dwindling number of private health insurance coverage options made available to them in recent years have perhaps had their concerns verified this week. A new report released by the American Medical Association (AMA) has found that four out of five metropolitan markets in the United States lack a truly competitive commercial marketplace for health insurance. This fresh analysis could go a long way in explaining why insurance industry performance in the US has stagnated while international markets continue to grow.
For the AMA’s 2011 edition of ‘Competition in Health Insurance: A Comprehensive Study of U.S. Markets’, the leading US trade body for physicians examined private health insurance market shares against new federal concentration measures in 368 prime metropolitan markets across 48 states. Researchers incorporated the most recent insurance enrollment figures from Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO). The dataset excluded research relating to public healthcare programs, such as Medicare and Medicaid, was excluded, but included Americans who choose to pay for private coverage on their own.
The AMA study revealed that there is a “significant absence” of competition amongst American health insurance firms in a staggering 83 percent of all domestic metropolitan markets surveyed. According to the AMA, these health insurance market environments would be classified as ‘highly concentrated’ based on the recently revised Horizontal Merger Guideline that was issued by the U.S. Department of Justice and the Federal Trade Commission last year. Under the previous version of the federal market concentration measures the results would have been even worse, with 98 percent of metropolitan markets classified as ‘highly concentrated’ due to one player holding at least a 42 percent market share. Clearly, the AMA argues, years of industry consolidation has had the effect of restricting competition and limiting consumer power, and could in fact raise anti-trust implications for several of these large companies.
Broken down more succinctly, the AMA report found that in about half of all metropolitan markets surveyed, there was at least one health insurance company with a majority commercial market share of 50 percent or more. Indeed, in 24 out of the 48 states reviewed, the two largest health insurers in their sate would have a combined market share for health insurance consumers of at least 70 percent or more. According to the data, Alabama was the state with the least competitive health insurance market and had two insurance companies controlling roughly 95 percent of the marketplace. In order, the next nine states with the least competitive health insurance markets were Alaska, Delaware, Michigan, Hawaii, Washington DC, Nebraska, North Carolina, Indiana and Maine. Oregon’s health insurance market meanwhile was the most competitive in the US, with the top two insurers only controlling a 39 percent share combined.
So competition in the US health insurance industry is deteriorating as more commercial markets across the country becoming dominated by one or two insurance groups. In 2009 AMA found that just 18 of the 42 states it polled had two insurers with a combined market share of 70 percent or more. In markets that are dominated by only a few health insurers, company revenues have been growing faster than the average health inflation index. Insurers have been able to maximize the rates they charge employers and families in these markets and ultimately create real cost barriers to healthcare. The authors of this year’s report believe that the monopolistic tendencies of large health insurers have been largely ignored and that this would continue to restrict marketplace competition without more critical oversight. “New data presented by the AMA demonstrates the degree of anti-competitive market clout that some health insurers have gained through mergers and acquisitions,” said AMA President Dr. Peter Carmel, in a news statement, adding that “our new report is intended to help regulators, lawmakers, researchers and policymakers identify markets where mergers among health insurers may cause competitive harm to patients, physicians and employers.”
The concentration levels now present in US health insurance markets have been largely the result of heightened consolidation efforts taking place within the American health insurance industry. Indeed, according to some reports there have been over 400 mergers involving health insurance companies over the past fourteen years in the United States. While merger and acquisition activity can yield improved industry performance, it can also lead to the exercise of market power and this in turn can negatively affect both healthcare providers and consumers. The AMA believes that healthy competition in the marketplace is a key way of keeping costs and premiums down. The numbers present in their report, meanwhile, should raise anti-trust concerns for the US health insurance industry.
It cannot be argued that Americans are paying more for health insurance and healthcare today than ever before. A report released by the Kaiser Family Foundation in September showed that the average annual premium for family coverage through employer-sponsored insurance hit US$15,073 in 2011, a 9 percent rise over the previous year. Kaiser noted that the overall cost of family coverage in the US has doubled in the past decade; health insurance premiums in 2001 averaged out at US$7,061 per year. The steep hike in insurance rates has come in conjunction with only a 34 percent gain in real wages over the same period, leaving many to absorb healthcare costs through debt or having to avoid vital medical treatment altogether. In a recession with high unemployment rates, many employers find themselves in a position where they no longer need to provide cost-effective health benefits to attract or retain employees. Employers have also attempted to shift rising healthcare costs to workers, making insurance less affordable. According to the recent US Census Bureau data, 14.3 million Americans, or 15 percent of all full-time employees, were uninsured last year.
It is unclear how the Obama Administration’s Affordable Care Act will impact health insurance costs, coverage and competition concerns at present, as many important facets of the healthcare law are still being debated on a political level and in the courts. Under the Affordable Care Act nearly all American citizens would have to carry health insurance in 2014 or else face a fine. The federal law requires that the general public have insurance policies which meet certain minimum benchmarks, more sufficient than basic catastrophic coverage and preventive services. This individual mandate is currently facing legal challenges in 26 states which contend that the United States government cannot compel its citizens to engage in such commerce. Several federal courts have already ruled that the individual mandate violates the US Constitution, and the US Supreme Court is ultimately expected to decide upon the controversial issue soon.
Cost and competition concerns have not been as apparent for companies focused on providing international insurance policies. While American health insurance policies face a bevy of restrictions based upon the insurer and available health network, including limited choice of medical facilities, doctors, and treatment options, many international health insurance plans feature two areas of coverage, worldwide and worldwide excluding the US, to avoid the skyrocketing healthcare costs in America. In general, these international health and medical insurance plans will offer access to any hospital or healthcare professional available, no age/pre-existing condition refusals with guaranteed renewals, and even provide emergency cover in the United States if certain events come to pass. Indeed because the market in the international health insurance industry has remained more open, health inflation is kept down and plans have become more competitive when compared to what has happened with traditional local American plans. US-based insurers have taken note of the demand for this type of product and are expanding into international markets themselves through merger and acquisition activity in emerging international insurance markets.
Company Mentioned
The American Medical Association
The American Medical Association (AMA) is the largest physician organization in the United States and plays a key role working on the most important professional, public health and health policy issues facing the world. The AMA was founded in 1847 to establish a code of medical ethics and today has some 228,000 members.
Sep
26
More Young Americans Insured
Filed Under USA Health Insurance | Leave a Comment
While the United States’ political class continues to feverishly debate the merits of government involvement in healthcare and insurance, one key demographic has seen a considerable improvement in coverage since several provisions from President Obama’s contentious Affordable Care Act were put into place in 2010. According to two recently released surveys, one by the government and another by Gallup, nearly one million young adults have gained health insurance in the US within the past year.
Health insurance in the United States is primarily provided through private sector employers. This has meant that citizens classified as young adults, aged 18 to 25 and traditionally the most likely to be either be unemployed, underemployed or still in school, have been the demographic group with the lowest proportion of health insurance policyholders in the country. A key provision of the Obama Administration’s Health Care Reform Act has given citizens in that age range more coverage options. Starting in September last year, young adults can stay covered as a dependent under their parent’s family health insurance plan until they are 26 years old, enabling the mass of college graduates encountering a difficult job market to maintain some valuable security. Young adults are able to stay on a family plan even if they no longer live with their parents, are not a student, listed as a dependent on a parent’s tax return, or even married.
Under the previous law, dependent children were generally removed from a parent’s coverage when they reached a cut-off age (usually 19) or graduated college. These young workers would then largely abstain from coverage as starting positions frequently do not have extensive health benefits nor adequate wages to afford an individual health insurance policy.
According to data released by the Centers for Disease Control and Prevention (CDC), by the end of the first quarter of 2011 the number of uninsured adults in the 19-to-25 age bracket had decreased by 900,000 over the same period last year, moving from 33.9 percent of all young adults (10 million) in 2010 to 30.4 percent (9.1 million) this year. The CDC report, the National Health Interview Survey, interviewed more than 20,000 people from January through March and noted that the increase in insurance coverage amongst younger working-age Americans may continue through the remainder of the year. For every other age group surveyed, the proportion without health insurance actually increased, in conjunction with rising unemployment figures and contracting employer margins. The CDC noted that for the first time in over a decade, the 18-to-24 year old group was not the least insured group in the United States, having now been overtaken by other working-age Americans who are between 25 to 34 years old.
The CDC report reinforced findings made by the US Census Bureau last week, which reported that the percentage of young adults without health insurance cover dropped by 2 percentage points in 2010, to 27.2 percent overall. The Census Bureau uses different testing methodology to the CDC but that result still translates to 502,000 fewer uninsured 18-to-24 year olds in the United States over the past year. The Census numbers further revealed that young adults were the only group who gained coverage through private employer policies (possibly though their parent’s plans), and not government programs. A separate forecast by the Department of Health and Human Services last year, came between both government surveys, projecting that 650,000 young adults would gain coverage in 2011 due to the healthcare reform act.
A survey conducted by independent polling firm Gallup found similar rates of insurance amongst American young adults in the second quarter of 2011, giving valuable credence to the government’s assessment. Gallup’s data incorporated 89,857 interviews between April 1 and June 30 and found that the number of uninsured Americans ages 18 to 25 went down to about one in four (24.2 percent) from upwards of the 28 percent last reported in the third quarter of 2010. According to Gallup, this is near the lowest rate measured for this age group since the firm started to monitor health insurance coverage rates in 2008.
Neither survey explicitly linked the rise in insurance coverage amongst young adult Americans to the recent changes in healthcare law. However, when paired with stagnant unemployment numbers and falling health insurance rates elsewhere, it becomes more apparent that lifting age-restrictions to family cover has had a profound affect on the statistics. Allies of the Obama Administration’s agenda have been quick to use this data to demonstrate the positive role more proactive government policy can have in increasing insurance coverage in the USA. Last week, Kathleen Sebelius, Health and Human Services secretary, explained in a statement that young Americans would now be able to choose their career path without fear of dropped coverage or inadequate benefits. “This is a reminder the difference the Affordable Care Act is making in the lives of Americans …Where would we be if the inventors of Facebook had taken a desk job just to get health insurance,” Sebelius said.
Young adults, when given appropriate information and resources, are certainly interested in buying insurance and taking the necessary steps to protect themselves and their future. The rise in insurance awareness amongst younger working-age people is a trend being experienced worldwide. According to recent studies commissioned by Swiss Re and ING, the next generation of consumers in emerging Asian powerhouse markets India and China have become increasingly risk averse, more aware of the benefits of insurance, and willing to purchase cost-effective policies. For the international insurance industry, these younger clients are not only the future buyers of insurance, they also represent a tremendous business opportunity right now.
Organizations Mentioned
CDC
The Centers for Disease Control and Prevention (CDC) is a part of the U.S. Department of Health and Human Services. The CDC is the primary Federal agency responsible for executing and supporting public health initiatives in the United States of America.
Gallup
Gallup Inc. was founded in 1935 and has grown to become one of the world’s leading polling, research and consulting organizations. The firm today employs thousands of industry specialists and provides its services through the internet, Gallup University campuses, and through 40 offices stationed around the world.
Sep
16
US Census Shows Little Change in Number of Uninsured Americans
Filed Under USA Health Insurance | 2 Comments
New Statistics released this week by the U.S. Census Bureau reveals that health insurance has remained stagnant in the United States, with citizens failing to increase their coverage due to more pressing economic concerns.
According to the report, titled Income, Poverty and Health Insurance Coverage in the United States: 2010, 49.9 million Americans or 16.3 percent of the total US population had no health insurance in 2010. That percentage represents a slight increase on 2009’s figures, when 49 million citizens or 16.1 percent of the population was uninsured. The Census report noted that their 2010 data represents the first full year after the recession that officially ended in June 2009, and could thus be compared to similar periods after the end of other recessions in the past. The report noted that the year following the most recent recession showed no major difference in the uninsured rate, while in the years following the recessions that ended in 1991 and 2001, the uninsured rate in the US increased more substantially.
While there was no significant shift in numbers this year, the percentage of Americans covered by private health insurance policies has continued along its decade long decline. The Census data showed that the rate of private coverage decreased from 64.5 percent in 2009 to 64 percent in 2010. The number of people covered by private health insurance in the United States stands at 195.9 million people, still the largest insurance market in the world but the rate of private coverage has been decreasing since 2001.
The increased number of uninsured Americans has been largely attributed to the continued decline in the availability of employer-sponsored health insurance. Private sector employers have long been the bedrock provider of health insurance benefits for working Americans and their families. Although the US population has grown from 279.5 million to 306.1 million in the past decade, the percentage of employment-based healthcare coverage has decreased every year since 2000, from 64 percent and 179.9 million people, down to 55.3 percent covering 169.3 million people in 2010.
The proportion of job-related coverage available in the US has been dropping due to rising insurance premiums, unemployment and adverse economic conditions. Employers have also attempted to shift rising healthcare costs to workers, making insurance less affordable. Furthermore, in a recession with high unemployment rates, many employers find themselves in a position where they no longer need to provide cost-effective health benefits to attract or retain employees. According to the census data, around 14.3 million or 15 percent of all full-time employees were uninsured. Of those Americans not working, 28.5 percent were without healthcare coverage in 2010, roughly the same percentage as 13.7 million part-time workers in the country.
The number of uninsured may in fact have been greater had it not been for the increased presence of US government insurance programs (including Medicare, Medicaid, TRICARE and Children’s Health Care Program), which have mitigated the coverage shortfall considerably. According to the Census report, the number of Americans covered by government health insurance programs increased to 95 million people in 2010, up from 93.2 million in 2009. The percentage of people covered by these programs has now increased for the fourth consecutive year, rising to 31 percent in 2010 from 30.6 percent in 2009. Last year Medicare and Medicare enrolled a record number of beneficiaries, with 48.6 million and 44.3 million incoming people, respectively. These state coverage programs are set to expand further through upcoming healthcare reforms but it is yet to be determined whether or not they can handle the influx of people who now lack employer-based coverage.
According to the Census data, the rate of health insurance coverage in the US remains divided by ethnicity, geography and income. Nationwide statistics remained relatively unchanged this year with 30.7 percent of all Hispanics uninsured, followed by 20.8 percent of blacks, 18.1 percent of Asians and 11.7 percent of whites. The South continued to lead all regions with 19.1 percent of its resident population lacking health insurance. Those with household incomes below US$25,000 accounted for the highest rate of uninsured, at 27 percent, while households earning over US$75,000 annually comprised only 8 percent. Why these relatively wealthy 8 percent have not purchased health insurance is not answered.
The Census Bureau did note one demographic that managed a notable increase in cover over the past year and that is young people. The number of uninsured among 18 to 24 year olds, commonly the least likely to be employed and have coverage, declined by 2 percent from 2009 to 2010. The US Secretary of Health and Human Services Kathleen Sebelius attributed this promising statistic to one aspect of the federal Affordable Care Act that had already been put into place. Starting last year, dependents could stay covered under their parent’s health insurance plan until they were 26 years old, which has enabled graduates encountering a difficult job market to maintain some valuable security. “The report showed that the percentage of young adults with insurance increased from 70.7 percent in 2009 to 72.8 percent in 2010. That translates into 500,000 more young people with insurance. We expect even more will gain coverage in 2011 when the policy is fully phased in,” Sebelius noted on the department blog.
It remains unclear how the remaining provisions in the Obama Administration’s Affordable Care Act will impact these coverage stats, with many important facets still being debated on a political level and in the courts. Under the Affordable Care Act nearly all American citizens would have to carry health insurance in 2014 or else face a fine. The federal law will require that the general public have insurance policies which meet certain minimum benchmarks, more sufficient than basic catastrophic coverage and preventive services. This individual mandate is currently facing legal challenges in 26 states which contend that the United States government cannot compel its citizens to engage in such commerce. Two federal courts have already ruled that the mandate violates the Constitution, and the US Supreme Court is ultimately expected to decide upon the contentious issue soon. As we get closer to the inception date for these important healthcare policies, expect the annual Census reports to reveal more telling data that determines whether in fact such reforms will work for the average American.
Jul
4
Sun Life Develops Long Term Care Plans
Filed Under Income Protection, Philippines, USA Health Insurance | 1 Comment
Canadian insurer, Sun Life Financial has launched a single premium, whole-life insurance product for its US-based clients with a new linked benefit rider that enables owners to contribute towards vital long-term care. The new policy, named Sun Care Whole Life, can be used to pay towards in-home/assisted-living care or nursing home facilities and will hope to address the substantial number of Americans who are finding themselves unready to cope with the costs of medical treatment after retirement.
A recent study conducted by Sun Life found that almost two thirds of Americans currently do not feel financially prepared to meet the growing costs of late-in-life healthcare (regarding either in-home help, assisted living, or nursing care options) with only 16 percent of respondents actually confident they could handle these financial burdens. According to the study, the most consistent problem mentioned when preparing for late-in-life care has been the lack of understanding most Americans have about what the true costs of said care will be. Even accounting for the most conservative estimates of inflation over the next 30 years, the average cost of long term care calculated was more than double of what respondents were expecting. Medical inflation can be between 2 to 4 times the general inflation in any given country and this was reflected in the results. According to the Consumer Price Index, the current nursing home rate for a private room is US$85,000 and the projected rate by 2030 is US$190,000, not the mere 56 percent rise to US$125,000 most respondents anticipated. The figures also reveal that 24/7 in-home care rate will currently cost US$184,000 a year, and an estimated US$272,000 by 2030 and 40 hour a week in-home care runs US$44,000 a year, rising to $65,000 by 2030. An OECD report issued earlier this year confirmed that aging populations will cause global spending on long-term care to double or even triple by 2050.
Despite the continued development of assisted living and nursing homes in America into more reverent and autonomous healthcare institutions for seniors, the vast majority of those surveyed still wanted to live out their lives in their own homes. Most (83 percent) would prefer to be cared for by their families if the financial burden wasn’t too great, and would object to staying in long-term care facilities even if this option prolonged their life.
Janet Whitehouse, VP and general manager of Sun Life’s Individual Life Insurance Division, explained in a press statement that the insurer had used these interesting statistics about the financial preparedness of many Americans to develop a new type of insurance program. According to the 2008 report from the U.S. Department of Health and Human Services, around 70 percent of American citizens over 65 will eventually require some form of long-term care, often for such necessary daily activities as eating, washing or getting dressed. “We want to help people prepare, so if they ever need long-term care, they have more freedom to pick the level of care that suits their needs, and the costs don’t have to erode their retirement savings or estate assets,” Mrs. Whitehouse, said in the statement.
Through the new Sun Care Whole Life policy, users pay premiums like any other insurance plan, but the collected funds can then be allocated towards either late-in-life care (through assisted living options, nursing homes or in-house care health plans), or the benefits can all be passed on to selected beneficiaries income-tax free once the policyholder passes away. For an additional fee, the whole life policy provides an optional ‘return-of-premium’ feature, which allows holders to recoup the value of their original premium. The plan is currently available in 39 US states.
Sun Life officials assert that the Sun Care Whole Life policyholders and their beneficiaries will get sizeable value out of the contract. The plan estimates to provide long-term care benefit between three to seven times the initial value of the premium, dependent on factors such as riders selected, age, gender and the smoking status of the policyholder. Bob Klein, VP of strategic planning for Sun Life’s Individual Life Insurance Division, detailed that “once the policy owner pays the single premium, the policy is guaranteed to provide a benefit, either to the individual or the beneficiaries.”
This is an improvement over traditional long-term-care or similar life insurance plans, which don’t benefit the holder unless he or she makes a long-term-care claim, require unending premiums or provide no death benefit if a holder never needed long-term care amenities. Making benefit options available while alive gives policyholders’ greater flexibility to act on healthcare bills and assess whether they are eroding planned estate savings.
Bob Klein concluded the statement, encouraging Americans to plan, not panic. “Since being a family caregiver can exact a huge toll, and given average annual nursing home rates projected to rise to $190,000 by 2030, you raise your odds of getting excellent long-term care by planning for it,” he said.
This past week, Sun Life also involved itself in long-term-care issues in the Philippines. The insurer is planning to expand into the country’s emerging retirement planning industry and is sounding out the prospective creation of a stand-alone trust corporation to accomplish this.
Currently only 2 percent of Filipino citizens are financially independent upon retirement. Most retirement plans are provided through employers and Sun Life recognizes the potential for growth in this sector. Without a trust license however, it would be difficult for the insurer to enter this sector because it would be unable to offer competitive returns without the same tax treatment enjoyed by entities with trust functions in the country. Recent regulatory revisions drawn up by the Filipino central bank will allow non-banking institutions to apply for a trust license and Sun Life would now be considering this option.
Sun Life is the second-largest insurance company operating in the Philippines in terms of assets and wants to continue being strong player in the market. In February, the company signed a deal to acquire a 49 percent stake of Filipino insurance business Grepalife Financial Inc., a unit of the Yuchengco Group, for an undisclosed amount, expanding Sunlife distribution network in the Philippines. The deal rebrands Grepalife into Sun Life Grepa Financial as soon as local regulatory approval has been settled. Sun Life’s existing share of the Philippine insurance market is estimated to be around 17-20 percent, but with the new partnership the Canadian insurer is aiming to increase that to more than 25 percent in the short to medium term.
In an interview last week Sun Life CEO Donald Stewart, was upbeat about the company’s business in Asia and described the Philippines in particular as a country with “enormous potential,” remaining among its priority markets for long term success. “We want to make sure we commit to markets where we can succeed in and the Philippines is very much one of these markets,” he added.
Insurance Company Mentioned
Sun Life Financial
Sun Life Financial is an international financial services organization providing a range of protection and wealth accumulation products and services to individuals and corporate customers.
Jun
29
ExpatHealth.org International Health Round-Up – June 2011
Filed Under Healthcare, Technology, USA Health Insurance | Leave a Comment
June saw an E. coli outbreak in Europe and a fresh round of bird flu cases in Egypt, as well as the release of insightful research on both medical error and dengue fever. A key theme across health issues remains weighing the long-term benefits of preventative care (or systemic reform) against up-front costs. That the United States showed the highest error rate among seven developed nations does nothing to enhance the rep of its notoriously cost-inefficient health system – worth bearing in mind as the debate over health reform heats up once more.
Here are some of the top international health stories of the past 30 days:
E. coli ravages Europe
The top story in June was undoubtedly a deadly E. coli outbreak in Germany. Cases were initially reported in May but escalated sharply in June – as of June 28 around 4,000 people had been sickened and total fatalities stood near 50. German authorities identified bean and seed sprouts as the vehicle for the outbreak. While the number of new cases reported in Germany continues to decline (the total is still rising as a result of delayed reporting), late June brought the emergence of 8 cases in France. These too were linked to consumption of raw sprouts. French and German authorities are in the process of determining whether the bacteria had a common source.
For the latest on this story, click here.
USA and Australia show highest medical error rates
Patients who received poorly coordinated medical care or were unable to afford basic medical costs were much more likely to report errors in their medication or treatment, according to a study published in the International Journal of Medical Practice. Researchers from the USA and Australia used data from the Commonwealth Fund International Health Policy Survey to identify the key risk factors behind the errors reported by patients from Canada, USA, the Netherlands, UK, Germany, Australia and New Zealand. 11% of the 11,910 people surveyed said they had suffered a medication or medical error in the last two years. Patients in the USA and Australia reported the highest rates of medical/medication error: 13%. Germany and the UK reported the lowest at 9%.
For more on this story, click here.
WHO finds dengue fever costly as it is deadly
The World Health Organization (WHO) released its latest Dengue Bulletin (PDF Link), a special issue devoted to 10 studies on the cost of dengue fever and various prevention strategies. In an age where many diseases are on the decline dengue continues to pose a serious health threat all over the world. In Brazil, for example, the number of cases increased 6.2% and deaths 12% from 1999-2009. Dengue fever is a mosquito-borne virus common in tropical climates, including popular expat destinations such as India, Thailand and Malaysia. Studies estimate the annual cost of treating it to be in the hundreds of millions of dollars in the latter two countries. For India the figure is in the billions.
For more on this story, click here.
5 new cases of avian influenza in Egypt
WHO reported 5 new cases of avian influenza (or “bird flu”) in Egypt, 3 of which were fatal. The cases were scattered across the country, and are believed to have resulted from exposure to infected poultry. They were confirmed by the Egyptian Central Public Health Laboratory. To date the country has seen 149 cases and 51 deaths from the disease. While avian influenza poses little threat to tourists visiting Egypt on holiday, a spike in cases would do nothing for the country’s image. Revenues from tourism were down 46% in the first quarter of 2011 in the wake of the recent revolution.
For more on this story, click here.
Be sure to check back on this space for more updates in July.
About ExpatHealth.org
ExpatHealth.org offers a one-stop source for international best practices in expatriate health care, expat trends and regulatory changes impacting the health industry. The site covers both global and regional health issues. http://expathealth.org
Jun
28
Boosting Big Investments in “BRIC”
Filed Under Health Insurance, Hong Kong, Insurance Company, International Healthcare, Life Insurance, Medical Insurance, USA Health Insurance, Uncategorized | 1 Comment
As the economies of Brazil, Russia, India and China continue to grow, increasing numbers of international insurance and reinsurance companies are seeking to enter into these burgeoning regional markets. As some of the most recent international insurers to tap new country markets have found out, not only must they balance short and long-term strategies, but also provide appropriate and appealing products to local populations, sometimes even in the middle of shifting regulatory environments.
Just last week, at the Insurance Day Conference in Bermuda, Joe Plumeri, CEO and Chairman of Willis Group Holdings, spoke about the importance of maintaining growth in the Indian health insurance market along with the markets of Brazil, Russia, and China, or the “BRIC” countries as they are sometimes called. He stated that due to these countries’ developing populations, “the wealth and insurable value that an exploding global middle class will create will be unprecedented in history. The resulting demand for insurance will dwarf the capital and capacity of today’s insurance market.” Plumeri emphasized that “the new middle class will need brokers that understand them and their industries. They’ll need carriers who are innovative, financially secure, and who are there when they need them-carriers with a reputation for paying legitimate claims quickly.” A report published by Standard and Poor’s this week reaffirmed his opinion, with S&P credit analyst Magarelli stating that India’s “non-life sector, which includes property/casualty and health insurance, has one of the lowest penetration rates in Asia.” Again asserting Plumeri’s opinion on what customers will need from carriers, Magarelli proclaimed that in order to maintain the growth of the Indian insurance market, insurers need to start focusing more on key factors such as customer service, innovation, and efficiency; currently, “the insurers’ persistently poor underwriting performance..could potentially stunt the industry’s growth if it remains unchanged.”
As the demand for insurance in Brazil grows, The Travelers Companies Inc has just purchased 43 percent of Brazilian insurance company J. Malucelli Participacoes em Seguros e Resseguros SA for US$410 million, with the opportunity to increase its stake in the company to 49.9 percent over the next 18 months. As J. Malucelli already commands 30% of Brazil’s largest market, it is no surprise that Vice Chairman and head of Traveler’s Financial, Professional, and International Insurance business segment Alan Schnitzer said that J. Malucelli’s “extensive customer base provides us [The Travelers Companies, Inc.] with an exceptional platform for expanding the joint venture beyond the surety business into the growing property and casualty market.”
In accordance with projections for growth in Malaysia’s insurance sector, Zurich Insurance Company Ltd has just purchased Malaysia’s Assurance Alliance Bhd, a subsidiary of MAA Holdings Bhd, in full. A financial holding company, MAA offers general and life insurance, reinsurance, property management, investment advising, and more; Zurich purchased the general and life insurance sectors of the company. The sale comes a few months after Dan Bardin, Zurich’s chief executive of Global Life Asia Pacific and the Middle East, disclosed that the company was interested in expanding in Malaysia, saying that now is a “great time” to focus on expansion in Asia, although it can be “an enormous task to integrate.” Unfortunately, the sale effectively removed the basis of MAA, resulting in the quick descent of MAA’s shares on the Bursa Malaysia Stock Exchange from 5 sen to 67.5 sen on a volume of 32.63 million shares. MAA is also suffering other monetary issues, as without adequate internal funding, the company may not be able to pay their final principal payment of RM140 million. Whether or not they are able to do so will depend on the profit made from the RM344 million (US$114 million) sale to Zurich.
Bardin has reported that the company is also interested in expanding to Singapore and Taiwan. Contrary to S&P credit analyst Magarelli’s opinion that India has “one of the lowest penetration rates in Asia”, Zurich Regional Chairman of Asia/Pacific and the Middle East Geoff Riddell has reported that the company is currently not looking at expanding to India due to the competing prices caused by large private life insurers entering the market already. In March, Warren Buffett’s Berkshire Hathaway entered the Indian insurance market to sell automobile policies for Bajaj Allianz General Insurance, while New Zealand/Australia insurance giant IAG currently owns a 26 percent share of the Indian sector of its business alongside the State Bank of India.
Managing Director of Swiss Reinsurance’s Corporate Solutions Division Ivan Gonzalez elaborated on Swiss Re’s goals for expansion in the future in an interview last week. With 80% ownership of Brazilian insurance company UBF Seguros, Swiss Re has already gotten a footing in the Latin American insurance market, but they hope to use this ownership to expand in and out of Brazil; to grow the company “as a business”. With an eye on the other three largest Latin American markets-Mexico, Chile, and Columbia, Swiss Re is also opening an office in Miami, in order to “be closer to the Latin America market”, Gonzalez said.
Locally, Hong Kong is also trying to maintain its global financial foothold, as the Hong Kong government has begun to talk about creating an independent insurance authority; its aim will be to enhance “regulation and development of the insurance industry”, the government said. Secretary of Financial Services and the Treasury KC Chan also stated that the authority will “reinforce Hong Kong’s position as an international financial center.”
It is clear that companies will continue expanding into Brazil, Russia, India, and China, but only time will tell if they will be able to provide customer service that will maintain a good relationship between these countries and their new insurers.
Insurance Companies Mentioned:
Zurich: Although its headquarters are in Switzerland, Zurich services customers in more than 180 countries, providing insurance for markets in North America, Europe, Latin America, and the Asia Pacific. In North America, Zurich is the second-largest provider of commercial general liability insurance and the fourth-largest commercial property-casualty insurer.
Swiss Reinsurance: As the second-largest re-insurer in the world, Swiss Re maintains a presence on all continents, providing reinsurance for Property and Casualty and Life and Health related issues, as well as risk management services for corporations.
Bajaj Allianz Insurance Company: A joint venture between global insurance giant Allianz SE and Bajaj Finserv Limited, one of the 2 and 3 wheeler manufacturers in the world, Bajaj Allianz offers health, child, and pension policies in more than 1,200 offices across India.
J. Malucelli Seguradora SA is a Brazilian insurance company that provides surety insurance.
Malaysian Assurance Alliance Holding’s Berhad (MAA Bhd) is a financial holding company that provides financial services and insurance in South Asia, dominating in Malaysia while also establishing a presence in Indonesia and Malaysia.
Berkshire Hathaway: Under CEO Warren Buffet, Berkshire Hathaway manages many subsidiary companies, including Geico Auto Insurance, and can also provide financial planning help.
UBF Seguros: is a small Brazilian insurance company that provides agricultural and surety insurance.
Willis Group Holdings: As one of the world’s leading insurance brokers, Willis provides professional insurance services, reinsurance, risk management, financial and human resource consulting, and more in almost 120 countries.
The Travelers Company: One of the largest American insurance companies and the largest writer of US property-casualty insurance, The Travelers Company provides personal, business, financial, professional, and international insurance and ranks 106 on the Fortune 500 list.
Jun
21
In a move sure to reignite debate over upcoming US health system changes, The American Medical Association (AMA) on Monday publically reaffirmed its support for the individual mandate, the most contentious provision of the Obama Administration’s Healthcare Reform Law.
Under the Affordable Care Act (ACA) nearly all American citizens must carry health insurance starting in 2014 or else face a fine. These measures have been brought about to combat the rising number of US citizens who remain uninsured and the disparity of medical services and health outcomes in America that are widening along income lines. The federal law will require that the general public have insurance policies which meet certain minimum benchmarks, more sufficient than basic catastrophic coverage and preventive services. This individual mandate is currently facing legal challenges in 26 states which contend that the United States government cannot compel its citizens to engage in such commerce. Two federal courts have already ruled that the mandate violates the Constitution, and the US Supreme Court is ultimately expected to decide upon the issue soon.
At the AMA annual policy-making meeting in Chicago over the weekend, the nation’s largest doctors’ group held an extensive discussion on whether to continue its longstanding support for, in the association’s own parlance, ‘individual responsibility.’ The AMA has held an independent ‘individual responsibility’ position for almost a decade and has seen it become a source of division within the association. The AMA policy would require individuals or families earning over 5 times the federal poverty level to purchase insurance that covers, at a minimum, preventative healthcare and catastrophe coverage. US citizens who cannot afford insurance would get assistance in the form of tax credits.
The AMA’s House of Delegates spent all of Sunday debating the issue and on Monday voted 326 to 165, about a two-thirds majority, to uphold their commitment to individual responsibility health insurance policies. The House also reaffirmed its stance on AMA policy supporting health insurance tax credits, savings accounts, and direct subsidies towards the coverage of higher risk patients. While the AMA does not use the same language as the healthcare reform law, or use the term ‘individual mandate’ in its policy position, this decision will be interpreted as valuable support for the Obama Administration’s near-universal health insurance plan.
An alternative resolution, brought forth by several participating state and surgical societies, intended to overturn the AMA’s policy and replace it with increased tax breaks and other non-compulsory incentives to encourage health insurance spending, was rejected; as were measures that would have shifted more responsibility to individual states.
Opposing doctors have been adamant that mandates requiring everyone purchase insurance are unconstitutional, unnecessary, and represent unreasonable government intrusion in the healthcare industry. They also believe the mandate is in violation of AMA’s core principles: supporting freedom of choice, free-market economics, and preserving the physician-patient relationship.
In addition to ideologically opposing the reform, AMA members and delegates who have spoken out against the individual mandate argue that the association’s continued support of the healthcare reform law fractures the organization. Delegates have pointed to this “fracturing” as being a prime contributor to the abrupt decline in the group’s membership that has occurred since the ruling passed in 2010, with some 12,000 doctors reportedly leaving in the past year.
Those who have remained in favor of the individual mandate, and the AMA’s current position, assert that without the requirement to carry health insurance numerous Americans would not purchase it, and their medical costs would be passed on to others if they ever have to get substantial medical treatment, resulting in higher premiums for all. Furthermore, without the individual mandate the entire ACA law, which is expected to deliver many positive health outcomes for the US, will become toothless. Proponents argue that vital insurance market reforms, such as ending denials of coverage due pre-existing conditions, would only be made possible through increased participation in the health insurance market. Encouraging more US citizens to buy plans from private insurance companies (excluding those qualified for Medicaid or Medicare), in fact bolsters the AMA’s stance of free market competition in healthcare.
AMA President Cecil B Wilson, summarized the group’s deliberations: “The AMA has a strong policy in support of covering the uninsured, and we have renewed our commitment to achieving this through individual responsibility for health insurance, with assistance for those who need it,”
Dr. Wilson added that the AMA had extensively reviewed other policy options and ultimately concluded that without an “individual responsibility for health insurance” a realistic healthcare reform approach “cannot be fully successful in covering the uninsured.” He further believed that the “overwhelming nature” of the decision to uphold an individual mandate would keep the issue from resurfacing at AMA functions.
“I would be surprised if this comes up again in the near future,” Dr. Wilson concluded.
Company Mentioned
The American Medical Association
The American Medical Association (AMA) is the largest physician organization in the United States and plays a key role working on the most important professional, public health and health policy issues facing the world. The AMA was founded in 1847 to establish a code of medical ethics and today has some 228,000 members.
May
20
Starting in September, U.S. health insurance companies that want to increase premiums by 10 percent or more are going to face tougher government scrutiny from state or national regulators, according to new federal regulation issued Thursday from the Obama administration.
The average cost of health insurance in the United States has more than doubled over the past decade. Federal officials hope that better oversight tools will enable state governments to curb substantial rate proposals and generate savings for millions of individual insurance customers and small businesses.
Right now, regulation over insurance prices varies considerably from state to state, ranging from stringent to nonexistent market oversight. More than 30 states and the District of Columbia now have some authority to oversee and block rate increases if they find them unjustified, but many in the federal government remain concerned as both the premiums and profits in the health insurance industry continue to soar.
Kathleen Sebelius, the secretary of health and human services, told reporters that insurance companies should have to justify rate increases in an environment in which they have continued to do well financially “Health insurance companies have recently reported some of their highest profits in years and are holding record reserves,” Ms. Sebelius said, adding: “Insurers are seeing lower medical costs as people put off care and treatment in a recovering economy, but many insurance companies continue to raise their rates. Often, these increases come without any explanation or justification.”
Discussion regarding an expansion in government oversight on insurance rates was partly prompted by events last year when a California subsidiary of Wellpoint, the nation’s largest health insurer, wanted to raise premium levels on its policyholders by as much as 39 percent. California’s insurance commissioner, a state where regulators already had the power to review rates, examined WellPoint’s underlying calculations for justifying a rate increase and found them to be incorrect. WellPoint was then forced to cut the proposed increase in half, according to the Department of Health and Human Services. This victory for consumer advocates would not have been possible or even encouraged in many parts of the country.
The new rules, part of the Obama Administration’s 2010 Health Care Reform Bill, will require insurers who want double-digit premium hikes to explain and justify their rate increases to state or federal officials, who will then examine their proposal and decide whether or not they are unreasonable.
At the onset of the proposed requirements in December last year, the administration clarified: “Such increases are not presumed unreasonable, but will be analyzed to determine whether they are unreasonable.” The new rules dictate that a rate increase is termed unreasonable if it proves to be excessive, unjustified or “unfairly discriminatory.” An excessive premium increase is defined as “unreasonably high in relation to the benefits provided.”
Congressional Democrats originally wanted the federal government to have power to block carriers from issuing what it considered unjustified premium increases. But the final regulation as passed has left the directive up to state governments, who will now review rate hikes that hit or exceed 10 percent in their jurisdiction. The federal government has pledged an additional US$250 million to states to strengthen their rate review capacity. Several states who are opposed to the federal health care law have thus far turned down the money.
The 10 percent rate hike threshold will only be in effect for one year. By September 2012, states will set their own limits that more closely reflect trends in insurance and health care costs in their individual markets. States that do not conduct their own “effective rate review systems” will have the federal government step in and do it for them.
Insurance companies nationwide will now be required to post information online that justifies rate increases and to provide state regulators with sufficient underwriting data to explain the reasoning for increasing premiums. States that carry out rate reviews must also hold public forums to address concerns on proposed increases.
These oversight regulations will apply to insurance policies dealing with individuals and small businesses. Federal regulators have stipulated that large group coverage policies offered by large employers won’t require similar scrutiny as the buyers who design these products are more sophisticated and have more leverage in negotiating with insurers. Health insurance plans obtained before the health law passed on March 23, 2010 will also be excluded.
The US insurance industry has been critical of these new disclosure requirements, citing the 10 percent threshold as an arbitrary standard that could tar a majority of premium increases as supposedly unreasonable. Any review of rates will be flawed if it fails take into consideration the effect of government mandates and the impact felt when healthy younger people leave insurance markets and leave behind older, sicker and more costly policyholders. The regulations furthermore, do little to address the principal factor causing double-digit premium increases, the country’s spiraling healthcare costs.
Karen Ignagni, chief executive officer of America’s Health Insurance Plan, the industry’s main Washington lobbying group, argued that US health policy should instead be focused on reducing underlying medical costs such as hospitals, doctors, technology, and pharmaceutical prices.
“Health plans are doing their part to restrain health-care cost growth by partnering with providers across the country to change payment models to promote and reward safe, high-quality, cost-effective care…“Focusing on premiums diverts attention from that debate.” Mrs. Ignagni said in a statement.
Consumer advocate groups, meanwhile, have largely welcomed the move. Ethan S. Rome, executive director of Health Care for America Now, commented “The days of insurance companies running roughshod over consumers and jacking up rates whenever they want are over.” With more information revealed, consumers will be able to make informed decisions affecting the health insurance coverage of those most near and dear to them.
Mar
30
US Maternity Medical Tourist Situation Mirrors Hong Kong
Filed Under China, China insurance, Expat Insurance, Health Insurance, Healthcare, Hong Kong, Medical Insurance, USA Health Insurance | 1 Comment
American authorities have announced the closure of a “Maternity House” in the Californian city of San Gabriel, according to a New York Times report published March 29th, 2011. Neighborhood residents had complained repeatedly about the excessive noise coming from a local building, and the large number of pregnant women seen entering and exiting the area. Police officers and building inspectors discovered that the building was a center for Chinese medical tourists, who were using the home as a means to deliver their babies in the USA, thereby granting the child American citizenship. This situation is by no means unique to the USA as Hong Kong, for many years, has experienced a massive influx of mainland mothers looking to give birth within the city.
There are a number of reasons which can be used to explain the increase in Chinese mothers traveling abroad to give birth. One of these is with regards to the People’s Republic’s notorious “One Child Policy,” stating that Chinese nationals, within China, are only allowed to conceive, and give birth to, one Child. By going overseas to deliver, the mother is able to escape the bounds of Chinese legislation, and potentially have an additional baby upon return to her home nation.
The second reason for going overseas to give birth is more to do with having a form of “insurance” against untoward changes within the People’s Republic of China. In the case of the USA, any child born within the bounds of America’s borders automatically becomes a Citizen of the USA under the 14th amendment. Once the child is 21 years of age, they are then a full citizen of the country, and are able to petition the government to allow their parents to join them as residents of the US.
In Hong Kong this situation is paralleled, mainland mothers giving birth within the HKSAR gain their child “Right of Abode,” and consequently Permanent Residency; in addition to being granted the privilege of living in one of China’s most prosperous cities as their child’s guardian. While technically a part of China, Hong Kong operates under the “One Country, Two Systems” principal, and immigration of PRC nationals to the city is tightly controlled. By having a child in Hong Kong, the families of these children are able to ensure that they will not be deported for illegal immigration or visa over-stay infringements.
However, Hong Kong, unlike the USA, has healthcare system which is predominately public in nature. While private healthcare services and hospitals do exist in the city, the majority of residents receive their medical treatment through low cost, government run healthcare facilities. With a large number of pregnant mainland mothers using the maternity facilities at public hospitals within Hong Kong there was a serious strain placed on the city’s healthcare services. In some cases Chinese mothers accounted for more than 30 per cent of all deliveries at certain hospitals within Hong Kong.
In fact, this situation progressed to such an extent in Hong Kong that in 2008 the city’s government passed legislation introducing mandatory pricing for non-resident mothers wishing to give birth in Hong Kong public hospitals. Non-resident mothers who have booked their delivery in a Hong Kong public hospital are now required to pay a minimum booking fee of HK$ 39,000 (US$ 5,005.82) for a three day, two night maternity package. Non-resident mothers who have not booked a hospital bed, in other words, walk-ins, are charged HK$ 48,000 (US$ 6,161.06). The costs here do not include any complications of pregnancy, but are only for a routine delivery, and even then represent the minimum amount that a non-resident mother can be expected to pay; for Chinese nationals this no mean sum, as the nation’s average annual income is a paltry US$4,520.
Further to this, the Hong Kong government has not made any specific legislation with regards to the city’s private maternity hospitals, where the average maternity costs for a routine delivery are in the US$ 8,500 range; a cesarean section, or c-section, at the same hospitals will typically be priced at US$ 12,838. In comparison, the USA federal average for a routine child delivery comes in at roughly US$ 7,600.
As can be seen from the costs involved, the women undertaking this Medical Maternity Tourism phenomenon are clearly not from the lowest strata of Chinese society. With Chinese companies offering one-stop maternity tourism services from between CNY 50,000 – 90,000 (US$ 7,623 – 13,721), it is evident that these women, and their families must be, at least, slightly well off.
This then poses the question of why, exactly, the rate at which Chinese mothers are traveling overseas to give birth is increasing.
In recent years the PRC’s Central Government has made extraordinary strides towards improving the standards of the nation’s healthcare system and services; going so far as to introduce a comprehensive private China health insurance system, and stepping up much needed overhauls of the country’s top hospitals. In many cases China is able to offer private medical services which are on-par with, if not exceeding, those of their western counterparts. Hospitals like Parkway Shanghai are able to deliver some of the highest standards of medical treatment within the People’s Republic of China, and while they mainly serve foreign national expatriates, do cater services to Chinese residents.
The reason for this development then cannot be the quality of care, or even the cost of treatment, as these are both adequately covered within the People’s Republic. Additionally, unlike the furor over “Anchor Babies” within the USA, the Chinese mothers in question often return home after giving birth, and are usually in possession of above average financial means.
The issue of Chinese mothers giving birth in the USA is baffling American immigration experts, who say that the women are not acting in violation of current American laws. However, as in Hong Kong, there is apparent anger towards the trend. From the New York Times story:
“These people aren’t doing anything in violation of our laws,” said Mark Krikorian, the executive director of the Center for Immigration Studies, which advocates tougher immigration controls. “But if anything, it is worse than illegal immigrants delivering a baby here. Those kids are socialized as Americans. This phenomenon of coming to the U.S. and then leaving with people who have unlimited access to come back is just ridiculous.”
While there are many women from Asian nations participating in similar activities, such as South Korea, the Philippines, and India, it is Chinese mothers who are driving the trend. Not only are these mothers driving the trend, but their actions imply long term forethought towards the question of; where is it best to deliver my child overseas?
When looking at the American medical system the first thing which is immediately apparent is the need for some form of health insurance. Medical services within the USA can be prohibitively expensive, a much publicized and debated issue, necessitating some form of comprehensive health insurance coverage. However, it is important to realize that many insurers will impose a significant waiting periods on policy benefits such as maternity coverage. In some cases, the waiting period associated with maternity can be as long as 24 months from the start of a plan, although the norm would be closer to 12.
As such, it is obvious that these “Maternity Tourists” will have been planning their delivery trip for quite some time prior to departure. However, looking at the overall situation, it becomes much more complex than it can first seem.
Of those Chinese nationals and residents who do possess a health insurance policy, the type of policy prevalent within the population is “local health insurance.” These are medical insurance plans which are designed to work solely within a specific country, in this case China. These plans will not cover the policyholder overseas; while Hong Kong is considered to be a part of China, it is technically a separate national entity, so local China health insurance will not provide cover in the city, never mind the USA. However, in the case of Hong Kong, these maternity tourists tend to cover the costs related with the birth out-of-pocket.
American health insurance would then seem like an option; however, obtaining domestic USA health insurance to cover the costs associated with the birth is also a difficult proposition for foreign nationals, as an American residential address is typically required to access a plan. Looking at the waiting periods which will be involved, the logistics here would mean that the Chinese mother would have to be “resident” in the USA for a period which far exceeds the length of stay granted by her visa. As American immigration experts have cited the legality of this type of action, this is most likely not the case.
The last proposition for insurance coverage of the birth is with regards to international health insurance plans, which provide medical protection on a global basis. However, Chinese regulations, and the restrictions put in place by many of the major insurance providers operating on the mainland, mean that unless the Chinese citizen is an expatriate residing outside of their home country, they will be unable to obtain this type of policy. Due to the fact that American immigration experts cite the fact that many, if not all, of these mothers return to China after giving birth, having been abroad on temporary tourist visas, this is most likely not the case.
At the end of the day, it is extremely difficult for these mothers to fund their maternity tourism via insurance, which lends strong weight to the fact that they are paying for their maternity services out-of-pocket. If the USA is seeking options to resolve this potentially concerning issue, a price increase, or mandatory down payment such as that in place in Hong Kong may be a solution. In 2008, the year that “maternity tourism” began making headlines in Hong Kong, there were 7,462 babies born in the USA to foreign parents. Since then, the number of maternity tourists has only increased, and as China continues to generate more wealth, is likely to continue doing so.
Join us on Google +
