Posted on Apr 20, 2015 by Rob McBroom
The average cost of medical insurance in China
Article 1, launched March 30, is available for free from Pacific Prime’s site, and presents a number of interesting findings including rankings and average prices for China. While China is still a largely developing nation, with a relatively low cost of living, there are some things that are still quite expensive. Take for example, international health insurance.
In our report, China is ranked as the fourth most expensive location for international individual health insurance, with an average price of USD 10,121. This average is 46.20% of the cost of health insurance in the most expensive country - the US - and places China behind Hong Kong (second most expensive) and Israel (third most expensive).
When broken down by demographic the averages are:
- Singles: USD 4,492 - Ranked fifth most expensive among Single plans.
- Couples: USD 9,688 - Ranked fourth most expensive among Couple plans.
- Family: USD 14,816 - Ranked third most expensive among Family plans.
- Retiree: USD 11,086 - Ranked fourth most expensive among Retiree plans.
Together, these prices put China either just behind Israel or Singapore when it comes to average prices. See the report for more information on how the other cities and locations fared in comparison with China.
Why are premiums in China among the highest in the world?
Looking at the report, it is clear to see that, on average, China is among the most expensive places on earth for individual international health insurance. This may seem counterintuitive, especially because many expats and High Net Worth (HNW) individuals have a fairly low cost of living in the city. Pacific Prime has identified three main reasons why the average premiums are so high.
1. There is a substantial language barrier in place
Possibly the biggest barrier to receiving what expats and HNW individuals would deem acceptable care, is the language barrier. In public hospitals there is a very slim chance that staff will speak even a small amount of English or another foreign language. This leaves the private hospitals, which do hire doctors and staff from countries around the world. The issue with this, however, is that costs will be substantially higher than in the public hospitals. This, in turn, will mean higher insurance premiums
2. The cost and quality of health care is extremely varied
Since the implementation of health reforms in 2006, health care in China has been improving by leaps and bounds. So much so, that some facilities in bigger cities like Shanghai and Beijing are closing in on being at par international standards but still fall short of facilities in say the US and much of Europe. These reforms have also increased availability of health insurance to the point where a substantial portion of the country is reported to have government issued insurance (95% according to the Wall Street Journal). What this has led to is public hospitals that are overburdened, often somewhat dirty and lacking medical staff who have been trained to deal with this demand.
While there is high adoption of health insurance, the cost of health care at both public and private hospitals is highly variable, with many of the private facilities (which are preferred by expats and HNW individuals) charging high rates. For example, a delivery package at the Parkway Hospital in Shanghai starts at around USD 10,000. Combine this with a prenatal package and the base price can very quickly reach USD 15,000 or more.
Because medical care in China is notoriously variable in quality, many expats prefer to go to other cities in the region, like Hong Kong, for medical care. This means that they will need to have international health plans, which can increase the overall premiums. These plans are also important because many Mainland China only plans don’t cover costs to High Cost Providers - those that offer the best service - forcing expats to select international health insurance if they want access to the best plans out there.
Put simply: Demand for international health insurance in China is high among expats and HNW individuals which means premiums are also inflated.
3. It is due in part to the types of plans included in the report
Because the types of health insurance plans in this report are international, and have been developed for expats and HNW individuals, they often offer a higher level of coverage on a worldwide basis. As such, premiums will usually be higher than say local or regional-only plans.
Beyond that, the averages do take into account three different levels of plans which include: inpatient coverage, inpatient + outpatient coverage, and inpatient + outpatient + maternity coverage. These three plan levels have a wide range in pricing, which when averaged will result in a somewhat high premium.
To learn more about why these types of plans can be so expensive, download Article 1 for free today from our site.
Look for more information in our upcoming articles
Because China is a popular destination for expats, we have included an in-depth section looking at the prices for health insurance in China in Article 2 which will be out in early May. In the meantime, download Article 1 which provides a sound benchmark into the cost of health insurance.
To learn more about the individual medical insurance plans available from Pacific Prime, visit our online quote generator or contact us today. Also, give a listen to our Managing Partner in Shanghai, Vitto Depino's recent interview on the Limitless Laowai podcast. It's a great listen covering the most important things expats in China need to know about when it comes to health insurance.