digital nomad health insurance: universal global healthcare for e-⁠residents

Christoph Huebner • Dec 23, 2021 • 6 min read

NOMADS.insure is changing the game of digital nomad health insurance for e-⁠residents

Digital nomad health insurance - what is it all about?

A global digital nomad health insurance for all e-⁠residents – including coverage for pre-existing conditions and chronic diseases, with a worldwide scope: That's the dream.

What does it take to make this dream come true?

Many of you might have had struggles with health or travel insurance already. You know that they restrict access to the healthy, have a limited duration and a specific regional scope - all parameters that don’t match with the idea of universal global health insurance for e-⁠residents.

General approaches to tackle the issue have been either through a state-organized solidarity system or on the private market. Let’s first look into the state side:

There has been a project to address this dream already some years ago: “Nomad Security” – implemented by Accelerate Estonia, initiated by the Ministry of Finance. The aim was to find a way to open up the Estonian public health insurance fund "Haigekassa" to e-⁠residents around the world. In the end, it did not succeed for two main reasons:

A state run statutory health insurance provider doesn't have the processes and capacities for global reimbursements of healthcare bills in foreign languages and currencies.
As a national universal healthcare provider, Haigekassa doesn't have any access restriction to protect the paying collective in the solidarity system from “bad risks”. That's the term in the health insurance world for individuals who cost more than they bring. The only restriction is the territory.

So how can the digital nomad health insurance problem then be solved?

We need to understand some basics of insurance in general and health insurance in particular: the group size, access to the group, and uncertainty.

Insurance is for uncertain risks

Insurance is a collective of individuals who chip into a big pot to help each other to cover uncertain future damages which go beyond an individual's capabilities. Once the house is burning you can't join the collective anymore. Or once you have this expensive chronic disease those managing an insured collective have to protect their premium payers from this certain risk.

Unless...

Unless the group is big enough and randomized enough that a certain amount of calculated risk is acceptable.

A public national universal healthcare system has a massive database to calculate the statistics of the risk in their collective. And they have a good deal of experience with the fluctuation of that due to a randomized, large group and access limited to residents of their territory. So the annual number of heart strokes, additional diabetes patients and newborn babies with birth defects is only moving within an expected – and calculated – range. The same applies to the number of new residents with pre-existing conditions who become eligible for their coverage.

Private health insurance providers work similarly. In consumer plans they restrict access to their collectives by a medical underwriting: each individual undergoes a health check and their medical history is assessed. This either leads to direct access or to exclusions or risk loading added to the premiums. In case the risk is out of the calculated acceptable range, access will be denied. This usually applies to all kind of chronic diseases or if treatments of the cardiovascular system or the psyche were conducted recently.

Things change when entire randomized groups of a decent size are covered. Here, 'randomized' means: the group's defining parameter is something other than the mutual wish to join a health insurance plan. For example, the employees of a company. Given that a company generally employs rather healthy individuals, this is positive from an insurers perspective.

Compared to the general public this is a positive risk selection. Depending on certain parameters these factors allow the parties to agree on terms that are not possible in contracts for individuals. This ranges from cheaper premiums over easier access to no health checks at all – the medical history of the individuals can be disregarded as the size of the collective allows to assume and calculate based on broader statistics.

How does this apply to e-⁠residents?

The growing community of almost 100,000 e-⁠residents comes with a certain set of characteristics that make them - as a risk collective - both attractive and hard to calculate at the same time. Furthermore, active e-⁠residents have a legal entity (their OÜ), which can be facilitated as an additional vehicle.

And there is even another special collective of e-residents within the global community: the Estonian e-Residents International Chamber Association (EERICA). EERICA is a well-established organization of active e-⁠residents with a defined purpose that is far from just granting access to a health insurance plan. This can work as a defining factor for a randomized group.

So what is the takeaway?

It’s doable. On the one hand, the EERICA collective is attractive for actuaries and underwriters, as its members, are active, working individuals in a decently sized group. They are open-minded travellers – which they can only be as physically and mentally more healthy than the general average.

But on the other hand, they are really hard to estimate and calculate: their diverse backgrounds and unknown approaches to health and lifestyle, such as whether they have regular medical checkups, are risk factors.

Given all these factors and uncertainties, the approach to make the dream of universal global healthcare for e-⁠residents come true must follow lean-startup principles: build, measure, learn.

What we do here

As specialized insurance brokers in global healthcare that’s exactly what we’re doing - providing health insurance for digital nomads. As of today, we are able to help all (overall) healthy nomads to get coverage from the global market. From Allainz to Passportcard, we maintain good relationships with all relevant players on the market. But legally we are on the side of our clients: the brokers position is the one of an advocate towards the insurance companies.

Please to watch this video.

As an active member of the e-⁠Residency community we strive for more. We want to facilitate access and grow the network in all directions of the ecosystem to develop a new, bigger solution. We believe that access to universal global healthcare can be a gamechanger for the entire e-⁠Residency program. And we’re in positive conversations with multiple insurance providers who are interested in supporting this vision together with us.

So we’re putting the moving parts together and ramping up the beta phase slowly with a close eye on risk and damage development. The first couple of dozen onboardings into the collective have a full medical underwriting. And step by step – as the collective grows – we lower the entry hurdles.

With joint monthly webinars for e-⁠residents (together with all major service providers) and individual consultations, we cover you already today.

This is a guest article by Christoph Huebner at Herrmann, Huebner & Partner. With their brand “NOMADS.insure” they are specalized health insurance brokers for digital nomads and a trusted member of the e-⁠Residency Marketplace.