The current healthcare crisis and its impact on expatriates
As has been widely-publicised over the last few years, Europe has been hit by the global recession and ongoing sovereign debt crises. It’s no surprise then that the general healthcare benefits that people have come to expect to be available permanently are now being threatened or weakened.
Health systems for millions of people are not supported by one-off costs. They require ongoing, predictable government funds to keep running and paying the bills for thousands of doctors and 10 times that number in medical support personnel. And then there’s the facilities and operating costs to consider as well. As a result, a guaranteed level of health care service can be hard to maintain when the government itself is going through severe economic trauma to keep basic services running.
As many are aware, the powerhouses of Europe have been financing a number of the weakest players. This tradeoff has been essentially an investment to keep the long-term viability of the European Union together. In the meantime, however, even those who want the Union to work have had to agree that austerity means cutting into sacred programs never touched before in Europe.
Those receiving the healthcare financing benefits are the first to feel the budget knife cut, seeing their own health plans reduced significantly. Ironically, the caseload volume in many of the health areas is going up as funding is going down. Rough economic times often create an environment in which people get sick more frequently than normal. So the caseload demand has increased, and there are fewer resources available to respond to demand. But the handicapped countries being bailed out are not the only ones suffering. The rest of Europe is feeling the strain as well.
Even before the economic recession hit, much of Europe was trying to figure out how to maintain the expectations of the golden years while its industries were fighting for prominence on a new global market stage. Now that more tax funding is being siphoned off to maintain the governments’ survival, even less is available in the strongest countries to keep up with the past level of healthcare expectations.
When countries have to begin cutting into their health system, they are cutting into what traditionally has been an essential service in the European mindset. Furthermore, companies are scaling back from their defined pension benefit programs and instead are introducing their employees to the American 401k approach when possible to reduce benefit costs. The two put together is starting to build an uncertain future for those halfway through their careers and marching towards retirement in the new Europe. In that vision, healthcare access is not going to be equitable. It will be far more capitalistic, going to those who can pay for more of it than others.
So now we have the making of a healthcare service crisis. The elements are in place for a breakdown of the healthcare system that was always guaranteed under the Europe that was created post World War II. Funding systems are shaky and becoming highly variable, healthcare is becoming privatized, workers are living in a riskier, less predictable income environment, and industry is streamlining its costs at the expense of the workers. There is no way that a healthcare plan for all can continue; it’s simply not affordable in a leaner Europe.
The response to this new crisis foundation is all over the map. The Germans saw it coming and are worried far more than normal. The French believe raising taxes and throwing off austerity with denial will solve the problem until things improve. The British just about had their own heart attack with a potential secession of Scotland that was averted at the last second with a successful “NO” vote. And the rest of Europe is hoping there’s still money left to keep financing their sovereign debt.
Europe doesn’t have enough money anymore, either in reserves or in new taxes coming in, to maintain the typical way of life since the 1970s. And that revenue level isn’t likely to manifest again any time soon. So the continent’s countries are going to have to make a choice: Reduce the population in the healthcare system, increase the cost share with fees, reduce the healthcare level, or raise taxes. The last category, raising taxes, only works to the extent that people are employed to pay those taxes, so the very likely reality for Europe is that healthcare levels will be pulled back to balance the money coming in and costs going out.
This will mean that expats more than ever will need to have a strategy in place to pay for healthcare. Expats have always needed to carefully plan their financial affairs, due to their ‘offshore status’ and, as countless studies show, the most effective way for anyone to reach and exceed their financial goals is by working with a professional independent financial adviser. deVere Group, which has 80,000 mainly expatriate clients globally, is the market leader in its sector.