Growing middle class populations in Asia, China and India are creating important international markets for a number of U.S. health insurers, including Aetna and CIGNA. At one time the international health insurance business focused on expatriates and the executives of global companies selling a supplement to the local mandatory cover called international private medical insurance (IPMI).
Now U.S. carriers are providing health benefits coverage to the local population. Aetna International, a unit of Hartford, CT-based Aetna, announced in July that it would enter the India market by acquiring IHO and its 80,000 members. In a press statement, Derek Goldberg, Aetna's managing director for Southeast Asia, noted that more than $30 billion is spent each year in India on out-of-pocket medical expenditures. Aetna hopes to leverage the IHO acquisition to build a broader physician network and expand IHOs geographic reach.
What's not being said here, perhaps strategically, is that the number of US employers spending money on Aetna for its expats and executives to access western-style healthcare in those local markets is dwindling. Therefore, the local market spend is needed to make up for the hole created by US employers rolling back benefit management into ERISA trusts with globally integrated health networks that offer more than just indemnity coverage and claims that can never be reviewed to assess value for money paid on premium.
What is also not being said is that those expats are also not coming home to the USA for care. They are accessing care at hospitals and clinics that are beautiful, well appointed with the latest technology, U.S. trained physicians, and lower prices than what the US employees pay in copayments for equivalent services, rendered in English.
Finally, 80,000 members in India, is actually quite small. To put in perspective, Hewlett-Packard Company, the American multinational information technology corporation headquartered in Palo Alto, California employs over 324,000 employees. I chose HP to make the comparison because India currently has the largest presence of HP employees outside the U.S. and it remains one of the largest IT employers in that country. Currently they have around 60,000 employees and more than 2,500 retail outlets in 365 cities and the widest product service coverage in India with 206 service points across 157 cities.
About the Author