IPMI: Health insurer hopes price reforms will lower premiums for consumers
A new pricing system has been introduced by BUPA International on both its individual Lifeline and company international healthcare plans.
From 1 April 2004, a policyholder's price will be based on the country where they reside. Both products will continue to be community rated, however the price paid on Lifeline products will no longer be based on a five-year age band, but relate directly to the policyholder's age.
The previous pricing model calculated premiums for individual Lifeline products on a wordwide basis, whereas company products were priced on a regional basis. It is hoped that the new system will help lower premiums for some policyholders.
"When it comes to medical cover everybody's needs are different," said Bill Ward, managing director of BUPA International. "Our customers told us that they wanted products and prices that were more tailored to their circumstances. Many customers thought it was unfair that in addition to their country of residence they only needed cover for one other country, yet they had to pay a worldwide price."
According to its new product literature, the insurer will individually price different countries, placing them in one of seven zones depending on their claims experience. For example, the US is classed as zone one, the UK as zone four and Morocco falls into zone seven.
This means that countries will not be cross-subsidising each other and customers will only pay the price appropriate to the places they want cover for.
"If you are a German expatriate, living in Spain, why should you have the cost of healthcare in Hong Kong included in your price? Our new pricing strategy responds to this concern by providing the customer with a more appropriate price," added Ward.
