Why do Medical Insurance Premiums Rise Year after Year?

Asking customers to pay more for their insurance cover at renewal can be a difficult conversation – especially if no claims have been made during the previous year. In this blog we explain some of the many reasons that give rise to medical insurance premium increases. We also give you tips for managing your health insurance premiums more effectively when purchasing or renewing.

The main factors that cause your premiums to rise fall into three brackets: medical inflation, claims and insurer expenses.

FACTOR 1: Medical Inflation

Medical inflation – the costs associated with providing healthcare – rises exponentially year after year and is caused by a whole range of factors. We’ll examine a few of them below:

Supply and Demand
Health care is in demand. The world is seeing a rising incidence in chronic diseases like diabetes – especially in the likes of China and the Middle East. The global population is rising – we’re all getting older and living longer. Many parts of the world are also experiencing new found wealth – and they want better health care. This all adds up to higher demand for medical services, which pushes up the cost of providing it.

Medical advances and new technology
Huge technological advances are made in medecine every year. New drugs, procedures and equipment are leading to better outcomes for patients. But new treatments often bring higher costs – and these are passed onto insurers.

FACTOR 2: Claims (incidents and costs)

Like any business, insurers need to make money to survive. This means, generally speaking, that they have to bring in more money in the form of premiums than they pay out in the form of claims. If insurers experience a higher than expected incidence of claims they may take the decision to adjust premiums to make up the shortfall.

Claims are affected by any number of factors. People living healthy lifestyles are likely to make fewer claims than those who don’t. Claims ratios amongst ageing populations will tend to be higher than in younger groups. The ‘culture of claiming’ is higher in some parts of the world than others. And fraudulent claims can occur – either amongst policyholders or by medical providers in the form of excessive charging or charging for non-administered procedures.

Insurers work hard to reduce the number and size of claims but often need to raise premiums to counteract the upward pressure they experience year on year.

FACTOR 3: Insurer Expenses

Insurers also have to take into account the expenses they incur from running their business. Each year insurers will experience inflationary pressures from the wages they pay their staff, the cost of investing in improving their businesses and cost pressure from suppliers – such as their evacuation partners.

Although insurers will continually try to make their operations more efficient, inflation usually wins, and some of these additional costs will inevitably need to be passed on in the form of higher premiums.

MANAGING YOUR PREMIUMS

Despite the continuing upward pressure on premiums, there are ways you can reduce the money you pay for cover:
• Only buy the cover you need – when you take out a policy, don’t pay for what you don’t need.*
• Choose a higher deductible or excess – by doing this you’ll be reducing the amount of money the insurer will have to pay out when you make a claim, so your premium will correspondingly reduce
Pay annually – insurers will often provide a discount (or won’t charge you interest) if you pay your premium in one lump sum rather than in monthly or quarterly instalments.
Shop around – choose from a range of insurers to get the cover you need at the right price

*RIVIERA EXPAT allows you to choose only the cover you need. Click here to find out more.

To summarise, annual premium increases are never welcome, but it helps to understand some of the reasons they need to rise. And by following a few simple tips and tricks, you will be able to get the cover you need at a price you are happy to pay.

David Eline

David Eline

Founder Rivier Expat

After experiencing the frustrations of expat healthcare firsthand, David built what was missing: a truly independent advisory service backed by a proprietary comparison engine that prioritizes quality over commissions.

His approach is refreshingly straightforward: diagnose your exact coverage needs, design a modular solution with genuine portability and deliver transparent advice without hidden agendas

Whether you’re a digital nomad bouncing between borders or a corporate executive relocating your family, David eliminates the administrative headaches and coverage gaps that plague international professionals.

👉 Connect with me on Linkedin

Health is your most important asset ❤️‍🩹

With just a few details, we’ll recommend a policy that precisely fits your protection needs from the world’s leading insurers. Finding the best value cover for clients is
our business!

7 Powerful Reasons Why International Private Medical Insurance Transforms Expat Healthcare

International Private Medical Insurance The world is shrinking. And the expat population? It's booming. According to research company Finaccord, there were 50.5 million expatriates worldwide in 2013. That number? Expected to exceed 56.8 million by the end of 2017....

Medical Conditions and Cover – Watch Out for Policy Exclusions!

When you have an accident or fall ill you'll want to know that you will have the full backing of your international private medical insurance (IPMI) plan to get you back on your feet as soon as possible. In most circumstances your policy will do just that but it's...

Seasonal Affective Disorder And What You Can Do About It

Many people living in temperate countries experience changes in their sleep patterns, energy levels and mood in the autumn and winter months. Whilst most people will feel 'low' at some point during their life, this feeling of unhappiness can develop into a depressive...

Pre-Authorisation and Direct Settlement Uncovered

Like any insurance, International Private Medical cover is littered with complicated and often misunderstood technical insurance terms. As a broker, it's My Matchmaker's job to help our customers understand the cover they are buying; and that often means explaining...

Expats on the Move – Preparing for your Move Abroad

The key to any successful short trip or permanent move overseas is to be well prepared and organised. But, whether you're relocating for a short or long-term work assignment or simply retiring to the sun, the amount of administration can be staggering! To help, we...

Expat Medical Insurance – Policy Terms Explained

Insurance policies are complex. And expat medical insurance plans are no different. As a broker, one of our main jobs at RIVIERA EXPAT is to help our customers understand the cover they are buying and match it precisely to their needs. To help, we've listed some of...

Medical Networks

When expatriates need care, medical networks offer first-class support As an expatriate, you could be living anywhere in the world. If you've taken out adequate international private medical insurance protection you can rest easy when it comes to healthcare...

International Private Medical Insurance – Benefits Uncovered

International private medical insurance (IPMI) is designed for people who are living or working outside of their home country, usually for six months of the year or more. Insurance plans can be purchased by individuals and their families as well as for company...

Expat Medical Insurance: Which is the Right Policy Type for You?

For expats living and working away from their home country having a comprehensive medical insurance plan in place is not a luxury but a necessity. If an unexpected illness or accident should occur then expats without cover face a potentially dire situation and high...

Spotlight on the Fine Print : Excesses and Deductibles

Anyone who has ever considered or bought international health insurance can be forgiven for not fully understanding all the product features and benefits, medical definitions and underwriting terminology. Health insurance is a complex product and the thought of...