Do You Need Travel Insurance?

Foreign travel checklist:
Passport – check.
Visa – check.
Airline tickets – check.
Hotel reservations – check.
Health insurance coverage – ???

Any foreign travel requires some planning. Since nothing can ruin a trip faster than an accident or unexpected illness, don’t forget to check how your health insurance coverage applies outside the U.S.! Generally, health insurance plans (both small group and individual) cover healthcare provided by doctors, hospitals, and medical services within the United States only. Some do cover emergency and urgent care costs that you incur outside the U.S. As you will most likely be using out-of-network providers, your plan will probably cover a lower percentage of your covered costs, often 50 percent. Even if you have valid coverage, some foreign medical providers will require you to pay for services upfront. You’ll have to file a claim with your insurer for reimbursement. After you add in any deductibles you have to satisfy and copayments, you could end up with considerable out-of-pocket costs.

Plans that do provide coverage for “reasonable and customary” emergency care costs you incur while abroad may not pay for your medical evacuation back to the United States. Evacuation can easily cost $10,000 and up, depending on your location and medical condition. Travel Medical Insurance Protects Travelers Travel medical insurance covers you if you become ill and need medical attention while living or traveling abroad. In addition, a comprehensive policy might provide additional travel assistance benefits. Depending on your policy, these can include access to a 24/7 telephone hotline that provides services such as lists of English-speaking doctors, directions to nearby medical facilities, lists of specialists and arrangements for evacuation service, should you need it.

Travel insurance generally costs from 4 to 8 percent of the total trip. Cost is based on the length of trip, destination, and age of the policyholder, reports the U.S. Travel Insurance Association. In addition to travel medical coverage, you can also obtain coverage for trip cancellation or interruption due to illness, carrier delays, weather or certain other unforeseen events, along with coverage for lost baggage.

As with all insurance policies, travel policies have limitations and exclusions. Before buying coverage, make sure it provides emergency evacuation services. Does it exclude injuries you sustain while doing high-risk activities such as parasailing, mountain climbing or scuba diving? Does it cover you for pre-existing conditions? Do you need to obtain pre-authorization or a second opinion before emergency treatment can begin?

You will also want to check how the insurer makes payments. Does it guarantee medical payments abroad? Will it pay foreign hospitals and doctors directly, or will you have to apply for reimbursement? If you have a reimbursement policy, you’ll have to pay any expenses upfront, then file a claim. You’ll need to provide documentation, such as medical records, doctors’ notes, authorization forms and information on your primary health insurance coverage. While traveling, you will want to bring your travel insurance identity card and a claim form.

Coverage for Retirees

Retirees who plan to travel frequently should take particular care to check their coverage. Original Medicare (Parts A and B) does not cover medical services outside the U.S. It will only cover emergency care you need while abroad under very limited circumstances, such as when a Canadian hospital is closer than a U.S hospital that can treat your emergency condition, or if you receive medically necessary health services onboard a ship in U.S. territorial waters.

If you have Medicare and plan to travel, you can buy a Medigap (Medicare supplement) policy that covers health services or supplies that you get outside the U.S. Standard Medigap Plans C, D, E, F, G, H, I, J, M and N cover emergency healthcare when you travel outside the U.S. All of these plans pay 80 percent of the billed charges for certain medically necessary emergency care outside the U.S. after you meet a $250 deductible for the year. These Medigap policies cover foreign travel emergency care if it begins during the first 60 days of your trip, and if Medicare doesn’t otherwise cover the care. Foreign travel emergency coverage with Medigap policies has a lifetime limit of $50,000.

Medicare Advantage plans, which are written by private insurers, vary by region. Some plans might cover health services or supplies that you get outside the U.S. Check your plan for coverage, or please contact us for more information on Medicare Supplement or Medicare Advantage plans.

What about Health Coverage for Expatriates?

The good news is that the Affordable Care Act’s penalties for not having medical insurance do not apply to Americans living abroad for at least 330 days within a 12-month period. Technically, the law does not exempt these individuals, but it considers them to have “minimum essential coverage,” whether they actually have a health plan while abroad or not.

Americans planning to live abroad should check with their employer’s human resource department to find out what their employer’s health plan covers. If you do not have employer-sponsored coverage, you can find country-specific health information at the U.S. State Department’s website, http://travel.state.gov/content/passports/english/country.html.

If you’ll be abroad for less than three months, you qualify for an exemption under the Affordable Care Act’s “short coverage gap” rule. Generally, U.S. residents who lack health coverage for less than three months do not have to pay the ACA’s “shared responsibility” penalties. If an individual has more than one short coverage gap during a year, the short coverage gap exemption only applies to the first gap. If you will have more than one coverage gap in a year-long period, you should obtain minimum essential health coverage while you are in the U.S. State laws govern health insurance plans, so you must be a resident of the state where you apply for coverage. Some insurers offer multi-state coverage plans that allow plan members to get treatment in more than one state (such as Kansas, Missouri and Oklahoma), but you must reside in one of these states.