Travel Insurance vs Expatriate Health Insurance
There are two main types of insurance for trips overseas; travel insurance and expatriate insurance. Travel Insurance is for short trips, usually less than 6 months, but possibly up to one year. Expatriate Insurance is for expats who are living temporarily or full time overseas, or who spend at least 180 days a year living outside of their home country. I will call the first type “Travel Medical” insurance and the second one “Annually Renewable Expatriate” insurance. Travel Medical is cheaper and available immediately. Annually Renewable requires a medical questionnaire and underwriting, and it is also a bit more expensive. The two are not interchangeable, as you will see in my description of the two types below.
Travel Medical Insurance:
One of the first pitfalls for overseas travelers is that they believe they are covered by their current US insurance policy. Don’t rely on your current medical plan when leaving the country. There may be limitations to your coverage overseas. Your US insurance company may assure you that you are covered, but when it comes to filing a claim and getting reimbursed, it can be a complete nightmare. There are also limits on what your provider will cover. Actual medical bill costs may be covered, but not evacuation or potential repatriation, hospital costs, flight home, etc. In the event of a death, the average cost of repatriation alone is around 20k USD, and that doesn’t even include funeral and burial costs. Both travel insurance and expatriate insurance can fill the void left by your current insurance and in some cases save you lots of money.
International Travel Medical insurance will cover your medical costs, evacuation and even repatriation of remains back to your home country. While treatment will most likely need to be in the “nearest, best facility,” your costs will be covered and you won’t risk being held “hostage” by a hospital in a foreign country. In addition, the insurance company will assist with evacuation, arranging transportation home and payment to the medical facility. Some travel medical policies even cover pre-existing conditions to some degree or another, but many do not. The policies that do generally require that you have current insurance coverage back home.
If you’re leaving for a long time and don’t plan on coming back for a while, you will want to look into a long-term, annually renewable international health insurance plan. Many times expatriates get their routine medical care in the country where the reside. Outside of the USA this care tends to be cheap; this leads some people to think that they shouldn’t bother with insurance. There are two reasons why this is a mistake. First, major life-threatening conditions are still expensive when you set out to get the best care available. A private hospital, even in the developing world, isn’t cheap. The cast you get for your broken arm or the stitches for that cut on your foot may indeed be cheap. But should you have to seek out a qualified cardiac surgeon—it’s going to cost you a pretty penny. You could fly back to the states for that, but it’s quite possible you no longer have insurance in the US, so now what? The second reason to get an international policy is that having one IS an effective and affordable way to maintain some insurance in the USA. This is because most plans will let let you seek up to 180 days of care in the US, and it is still much more affordable than if you had kept your original US policy. So, if you want the option of coming home for medical care if something big crops up, like cancer or heart disease, or if you spend your summers in the US and your winters cruising, an international expat plan will really fit the bill. There is one pitfall of expat plans—the exclusion of pre-existing conditions. With the advent of Obamacare (the ACA), many Americans got accustomed to having their pre-existing medical conditions covered, even if they switched insurance policies. Not so with international plans. International plans are not obligated to cover pre-existing conditions. If you have such a condition, remember that even though that particular part of your body may not be covered, the rest of you is! To my knowledge, 100% of the claims my clients have filed in the last 10 years have been for accidents and illnesses that befell them while traveling, not for a pre-exisiting condition that suddenly put them in the hospital. International health insurance is more affordable than you think, and a significant cost savings over what you have been paying as an American. It’s worth checking out before you head abroad.
Why not just buy a travel insurance policy for a year?
So… you’ve got a quote for a year’s worth of travel medical and a year’s worth of annually renewable insurance, and the travel medical insurance is cheaper. Your friend, living in the town you just rented an apartment in, uses GeoBlue, World Nomads or IMG travel insurance, and they say it’s great. Which it is! (But only for up to one year.) Why not save some money and skip the annually renewable policy with it’s cumbersome medical questionnaire and underwriting? Well… it all comes down to those pesky pre-existing conditions that you don’t have (yet).
Let me give you an example: Let’s say your friend Joelene has a one year travel insurance policy, even a very good one. Jolene is in excellent health, but wakes up one morning and feels a lump. The lump gets bigger, so Jolene goes to the doctor and they do a lumpectomy. A biopsy reveals that she has cancer. Jolene will most likely have all of the treatment covered for the removal of the lump. But ongoing treatments for cancer will stop when the policy expires. When Jolene is ready to get a new travel insurance policy, the cancer will be a pre-existing condition and will no longer be covered. It will be difficult for her to get any insurance at this point. You, on the other hand, decided to get the long-term policy, and yours is annually renewable. You couldn’t get it right away because you had to fill out a medical form and maybe even have the doctor sign off on some condition you had treated ages ago. The company might even have issued a rider excluding your knees because of a surgery some years back. But… you accepted the rider, got the policy and pay a bit more for your coverage than your friend Jolene. Then one fine morning you wake up and also find a lump. You end up with the exact same diagnoses as your friend Jolene. Thankfully, the many surgeries, medications, and ongoing treatment required, as well as follow-up visits to the oncologist, will be covered—this year, next year, and the next—for as long as you keep your policy. It renews each year, and you are covered for things that happen to you. It isn’t a pre-existing condition, because you aren’t buying a brand new policy each year. Before you sail off into the sunset for retirement or move abroad for a great job opportunity make sure you have the right kind of health insurance policy. If you need help finding what you need, send me an email at email@example.com or contact me here.