Travel Health Insurance Basics: Part 1

Frank Gillingham, MD

Open your U.S passport to page two and you may be surprised by the following warning:

HEALTH INSURANCE. Persons considering foreign travel should determine what health insurance coverage if any, they require while outside the United States. Medicare does not cover health care costs outside the United States and its territories, except under limited circumstances in Canada and Mexico.

The simple fact is that many international travelers do not have appropriate insurance protection. Government-sponsored health programs such as Medicare almost never cover care received in a foreign country. Employer-sponsored plans often limit overseas coverage to emergency care only (and the burden will be on you to prove it’s an emergency). Emergency medical evacuation is almost never covered. Even if you’re traveling on business, you may have significant gaps in your coverage.

Why is Insurance So critical for International Travel?

Obtaining healthcare in some parts of the world can be tricky. Some hospitals won’t provide any treatment—or won’t allow a patient to be discharged—until the hospital has received a guarantee of payment. Such guarantees are commonly provided by travel insurers, in conjunction with assistance providers, but rarely by other insurers or managed care plans. This means you’ll have to pay in advance, perhaps as much as tens of thousands of dollars, with your credit card. Of course, for this to work the hospital must accept foreign credit cards and your card must have a sufficient credit limit.

In addition, remember that leaving your destination—for a place with higher quality medical care or to return home where your regular insurance is accepted—can be difficult. Medical evacuations are tricky to arrange and there are some air ambulance providers who should be avoided. Worse, local authorities may have financial ties to certain evacuation companies. The solution? Most travel insurance includes a medical assistance benefit, which is critical. It gives you 24/7/365 access to a company that will arrange an evacuation for you with a creditable evacuation company—or, through their medical personnel, can help assure that you’re getting appropriate treatment locally. The assistance company will also be available to help with other travel-related problems such as legal troubles, lost passports or credit cards, etc. Emergencies are rare but everyone should have a contingency plan.

Assess your Personal Health Plan

If you have health insurance in the U.S., the first step is to check with your insurance company and establish what kind of coverage you have. If you have difficulty getting a straight answer, that alone should be a warning. If you don’t have insurance in the U.S., consider that you might need it more than ever when traveling—and recognize that the coverage can be cheapas little as $1.50 to $4.00 per day.

Three Important Types

There are three major types of coverage to consider. Most travel health insurance products offer all three or two of the three:

• Health/accident insurance. Sometimes referred to as international health insurance, these polices pay for doctor and hospital bills, and sometimes dental care and medications. These plans can be written for short trips (1 day – 6 months) and will supplement Medicare or a managed care plan. International health insurance can also be purchased as primary insurance for someone relocating to another country for an extended period of time (6 months or longer). These plans should be comprehensive and include added features such as preventative services, acupuncture, chiropractic, maternity benefits, and more.
• Medical Evacuation. This is key. Evacuations can be expensive (as much as $50,000 or more from a remote location). In addition to the coverage, you’ll want assistance arranging an evacuation—(see above).
• Trip cancellation/interruption. These coverages protect you financially in the event you have to cancel or interrupt your trip for medical or other reasons. For example, say you purchase a $5,000 cruise but can’t take it because of personal illness, or illness in the family. Depending on when you cancel, a significant portion of the $5,000 may be non-refundable. This type of insurance will reimburse you. Obviously, this protection is unnecessary for business travel.

One form of travel insurance commonly sold at airports is “flight accident insurance”, which generally pays a lump dollar amount in the event of death from a plane crash, an extremely rare event. If you’re looking at insurance in an airport, make sure it also includes one or more of the three important coverages listed above.