Why am I covered for tests overseas, but not here?

QUESTION: “My child was referred for dyslexia testing which can be done here in Bermuda. My major medical insurance will cover the test overseas including the flight and hotel, but they won’t cover it if it’s done here. 

Times are tough and I can do without this added expense, so I’m forced to take time off work to travel overseas with my child in order for my insurer to pay for it. Is this allowed and can I do anything about it?”

Answer: This is a tricky predicament but it does come up from time to time. 

The short answer is that there is nothing preventing a local insurer from determining which benefits its policies will cover or where, beyond the minimum mandated insurance package. 

That minimum is called the Standard Hospital Benefit, and it covers primarily hospitalization costs. Benefits beyond that are not regulated, so there is no legal restriction on what has to be covered. Consequently, benefit cover varies by policy and insurers have a range of products available. Some insurers cover more benefits overseas because on a unit-price basis, they can be less costly than here. 

Like almost everything else in Bermuda, prices can be higher locally because importation and the cost of doing business is higher. This applies to consumer goods like electronic equipment and cars, but it also applies to health services and health insurance; they are generally more expensive in Bermuda than elsewhere. 

However, once flights and hotels are added, health treatments may or may not be more costly overseas, depending on the procedure. 

An insurer’s decision to not cover available services locally, but cover them overseas, is not the norm, but it is also not prohibited. 

The argument generally presented is that by covering the benefit at the lowest cost location your premiums can be kept down — which I’m sure you would regard as a good thing. So, to answer your question: Yes, it is allowed. 

As to what you can do – speaking to your insurer directly would be the correct route. You can ask if it’s covered overseas because the full cost is less than locally; if it isn’t, they may reconsider your request. Flexibility varies by insurer and policy, so you will only find out if you ask them directly.

QUESTION: With health care costs continuing to rise, I would like to do my part and remain on the island for healthcare, but some services simply aren’t offered locally. Why not and why don’t insurers and/or the Government negotiate with more hospitals abroad to reduce the price of necessary overseas care? 

Answer: Opting for local healthcare can help contain costs, but as most residents know, this is not always an option. 

Due to economies of scale, an island the size of Bermuda cannot offer the same range of services as health systems in larger countries. There are many procedures that Bermuda can’t generate enough volume on for it to be cost effective to perform them here.

Also, the cost of some highly specialized medical personnel and equipment can’t be supported by a population of 65,000. 

This is the case for any small community; but in a large country you needn’t cross borders or oceans to get to the specialized centres you need, even if they are a couple of hours away. 

Simply put, Bermuda is too small to specialize for all potential medical needs. It is more cost-effective to travel abroad for certain services than offer them locally. However, when using overseas healthcare we should remember that travel and hotel expenses increase total health costs and contribute to rising premiums. 

Regarding your second question, by comparison to other jurisdictions, Bermuda doesn’t constitute a significant enough portion of overseas healthcare markets. In order to bargain more effectively, insurers independently join international networks and through these networks negotiate prices. But there isn’t a country-wide negotiation through these networks at present.

Our island’s small community means our health system cannot operate in the same way as other countries. To be sustainable, we have to be flexible and smart about what we provide locally and what we seek abroad.

Jennifer Attride-Stirling is the CEO of the Bermuda Health Council.