Sometime in last September, a wonderful group of people came together at an Accelerate Estonia hack-a-thon to try to figure out how to answer an interesting question. That question, “Could Estonia be the first to create ‘location-independent social security’ for digital nomads around the world?”, was asked by the Undersecretary for Tax and Customs Policy at the time, Dmitry Jegorov. At the end of the event we pitched the idea that Estonia would provide pensions and health insurance to digital nomads; just an idea with lots of work to be done ahead.
Once the Accelerate Estonia program officially launched in November, we got to work! After all, we’re not digital nomads ourselves and we had a lot of questions about government, pensions, and health insurance as well. So, we got to reading about, talking to, and learning from insiders in all the various fields involved in the project.
The initial approach seemed simple – understanding the potential market. What we quickly learned is that quantifying the digital nomad community is complicated. While there is plenty of media attention to the digital nomad lifestyle, as well as relatively new research focused on freelancing and the gig economy, the scientific approach to studying digital nomads specifically has yet to be applied. This may be unsurprising, it’s still a very niche lifestyle. However, it isn’t to be overlooked since the lifestyle becomes more accessible with advancement in technology, travel infrastructure improvements, and ease of transition to remote work (which was clearly displayed half-way through the program due to the coronavirus pandemic). In fact, a 2016 McKinsey & Company analysis indicated that 49 million individuals in the US and Europe engage in independent work as their primary means of income. These locations are also the primary sources of digital nomads – countries that offer powerful passports for easy travel and access to high paying markets where nomads can base their business and freelance work, while generally traveling to less expensive locales.
We also learned that digital nomads are varied in many ways. While some choose to change cities or countries every few weeks, others adopt a “slow-mad” lifestyle staying months at a time in a single location. Some maintain residency in their home country (and so usually no longer fit into our target market) and do multiple long-term trips per year discovering new parts of the globe. Income streams also vary, while some work for fully remote companies or negotiate with the employers to work remotely, many choose to work for themselves, becoming freelancers or building full businesses around their skill sets. Therefore, income level also varies according to the various streams and industries.
While we learned about nomads, we were also figuring out how the structures around private and public pensions and healthcare work. This led us to a very important decision – to narrow our focus to healthcare only. Why? One mission at a time. Long answer: retirement savings solutions on the private market are plentiful, opening the Estonian system while we’re in the process of changing it is complicated to say the least. Not to mention, that 20 somethings don’t list retirement funds as a pressing concern.
With our “healthcare only” idea in tow, we moved forward. We figured out how nomads were already ensuring access to healthcare. While some bought comprehensive international health insurance generally designed for expats, many only used travel insurance, and others went fully uninsured, relying on travel to countries where healthcare was relatively affordable. One thing that was clear no matter the choice: the question of health insurance was complicated and getting accurate and easy to understand information was difficult. We did interviews and found that even those nomads who were paying for insurance policies either didn’t feel certain that they understood their coverage or had some distrust in the company. In other words, they didn’t feel secure around a topic that is fundamental – their health.
This led us to focus on creating a “hybrid” product. We’re calling it “Travel Health+”. It’s a policy that gives nomads coverage for travel and health emergencies as they travel around the world – living their lives. It’s a policy that brings them to Estonia for very unlikely, but serious illnesses or incidents. In addition we want this product to include access to telehealth, allowing nomads to speak to a healthcare professional no matter how they’re feeling, no matter where they are. Plus, the convenience of a health record that’s digital and travels with them (like Estonians do). We re-launched our landing page to introduce the product and had nomads sign up to join our waitlist. This gave us the encouragement to keep moving forward, since it’s going to take a ton of coordination to come on the market as we envision.
That’s where gaining an understanding of the public and private sector players came in. With the help of our public sector mentor (huge “thank you” to Dmitri Jegorov), we were able to establish relationships with representatives of the Ministry of Social Affairs as well as the Estonian Health Insurance Fund. These individuals were instrumental in helping us understand the inner workings of the system that allows current Estonian residents receive healthcare services. We learned about the law(s), the processes, the contracts, and variety of service providers. A huge takeaway is the dedication we saw of the public sector employees – these individuals are set on doing their best for the individuals in the Estonian healthcare system. The questions we received from the public sector were often very different from those we received from private sector representatives, or even the Accelerate Estonia board, but they were always clearly meant to focus on understanding the benefit of the idea for Estonia.
Meanwhile, individuals in the private sector, from both insurance and health care companies, were pivotal in helping us grasp what would be needed in order to have this product come to market. We discussed the capabilities of the local treatment facilities to understand what treatments would be most feasible to provide locally. We also understood that any nomad coming to Estonia would probably benefit from translation assistance, to ensure full understanding of their care. Overall, the private sector provided clear insights into where they see the potential in the idea, what kind of product they could partner on, and most importantly are pivotal in helping blueprint the operational models that would make the product possible.
Currently we’re coordinating between various partners to determine how to pilot the product while establishing the needed operational systems and features. At the same time, we’re assessing how to bring about the necessary legislative changes that would need to be implemented to create such an unprecedented partnership. We are undoubtedly still facing an uphill climb to provide nomads with a safe harbor for their healthcare. However, we are not giving up on the journey of making sure digital nomads have confidence in their chosen health insurance.