The ideal medical insurance product
We don't yet have the perfect medical insurance product.
Consumers often see the perfect product as being one that pays for everything and costs next to nothing. Dialling back just a notch or two from that ‘dreamland’ we could sensibly describe what might be a ‘super-premium' medical product - designed shamelessly from a consumer’s perspective:
1. Unlimited cover levels
I don't want to even think that my cover is limited. When I am sick and scared for my life I want unreasonable levels of care.
2. Coverage for any form of care
Yes, including doctor's visits, optical, and dental, because why wouldn't I want my cover to meet all the expenses I perceive as ‘medical?'.
3. Non-Pharmac treatments
Because if it's my wife, child, or selfishly: me, I might want the best possible treatment that isn't yet sanctioned by the state.
4. Second opinion services
It’s a small medical talent pool, and we know that people can't be right all the time. The best 2nd opinion may also be from overseas.
5. Guaranteed Wordings
So you can't wriggle out of what you promised me
6. Treatment of my choice anywhere in the world
Today there exists medical tourism with the aim of using world-best services – combine a holiday with treatment!
The only problem is you can't buy them all from one provider. If you could, it would cost 2-4 times the typical total cost, so compromises have to be made.
Here's what could be cut:
Those ‘dollar-swapping’ benefits, in 2 above.
Out with the treatment overseas, as in 4 and 6.
‘Unlimited' cover like 1 above.
Today it would be wise to keep Non-Pharmac, Second-Opinions, and guaranteed wordings. Non-Pharmac has the greater ability to meet a catastrophic risk (big cost, but low incidence) but second-opinion has the ability to correct wrong diagnosis across every disorder (which could deliver more ‘disability adjusted life years').
If you can't afford those, you can still buy reasonable coverage without them, with a very manageable ‘Excess’. As for ‘best cover’ and limited dollars you should be okay provided you are:
well informed about the relative merits of coverage,
run a good process for selection, and/or
ask for advice from a qualified expert.
But on a wider perspective, because we do actually have quite a good health-care system, you may want to be adequately covered the income protection requirement before spending on medical.
Material adopted from an earlier article written by Russell Hutchinson of Chatswood Consulting.