Building Bridges: Treating Patients with Rare Diseases - The International Private Health Insurance (IPHI) Perspective

Navigating Complexity: The Challenges of Covering Rare Diseases in International Private Health Insurance

In the evolving landscape of global healthcare, few areas are as complex and as critical as providing coverage for individuals with rare diseases. For international private health insurance (IPHI) companies, these cases represent a unique convergence of clinical uncertainty, high costs, and logistical hurdles. As medical innovation advances and more rare disease therapies enter the market, insurers must confront a growing set of challenges to ensure both sustainability and equitable access to care.

The Cost Conundrum

Perhaps the most pressing challenge is financial. Treatments for rare diseases, such as gene therapies or enzyme replacement therapies, often come with staggering prices,  sometimes exceeding a million dollars per patient annually. With relatively small patient populations, insurers cannot rely on traditional risk-pooling models to absorb such costs. This creates significant volatility in pricing and underwriting, threatening the predictability that insurance products rely on.

Moreover, these treatments are not only expensive but also long-term or even lifelong, adding further strain to coverage models designed around more episodic care.

Data Gaps and Clinical Uncertainty

Rare diseases are, by definition, not well studied. Many lack robust clinical guidelines or long-term data, making it difficult for insurers to determine what constitutes medically necessary and effective treatment. Off-label use of drugs is also common due to the limited number of approved therapies, complicating coverage decisions.

This lack of standardized information forces insurers to evaluate each case individually, slowing down authorizations and increasing administrative burden—an outcome frustrating for both patients and providers.

Complexities in Benefit Design and Cross-Border Access

International private insurers must craft benefit designs that accommodate a wide array of healthcare systems, regulations, and provider networks. Rare disease care often involves specialized providers located in just a handful of countries, requiring cross-border coordination and coverage flexibility. This adds layers of complexity when patients seek treatment abroad or when therapies are not yet approved in a particular jurisdiction.

Ensuring continuity of care becomes a daunting task, especially when patients relocate or when treatments are only available in a limited number of centers globally.

Regulatory and Ethical Pressure

IPHI companies must also navigate diverse and often conflicting regulatory environments. Requirements related to drug approval, reimbursement, and data privacy (e.g., GDPR in Europe) vary widely across regions, complicating compliance and claims processing.

Ethical and reputational risks loom large as well. The decision to limit or deny access to life-saving but expensive treatments can provoke public backlash and legal challenges. Insurers are expected to uphold fiscal responsibility while ensuring compassionate, patient-centered care—an increasingly difficult balancing act.

A Path Forward

While there are no easy solutions, collaboration is key. Insurers, providers, regulators, and pharmaceutical companies must work together to develop shared frameworks for coverage, data sharing, and value-based pricing. Investing in specialized case management and outcome tracking can also help improve care while managing costs.

In the end, addressing the challenges of rare disease coverage is not just about managing risk, it is about building systems that are fair, responsive, and resilient in the face of medical complexity.

Click here to read the perspective of hospitals with international patient departments.

For relevant discussion between IPHI organizations and hospitals serving international patients on this and other topics, register now for the Building Bridges conference.