This article was originally posted in November 2019 only weeks after I broke my leg. However, the facts are still correct so I am reposting it for reference.
Most of us in early retirement want to travel extensively and we may or may not be too young for Medicare. Either way, you will need to understand your options for “travel insurance” and “medical insurance.”
Right now, we are working on our plans for next year, so let’s talk about the options and process for obtaining expatriate medical insurance. Let me preface this by telling you Mike and I aren’t old enough for Medicare and we plan to travel extensively, so we will be using expatriate medical insurance for awhile.
Types of Insurance
There are many different types of insurance that people often refer to as travel insurance. I’ll try to clarify by explaining the different types as I understand them.
Regular US Medical (usually from an employer)
This is the medical insurance most employees have. If you are like us, you always figure you’re covered for a medical emergency on your two or three-week vacation. Honestly, I’m not sure you are covered, so before your next trip, check with your insurance carrier. For example, I found we were not covered for evacuation in case something happened while traveling abroad. This can be a huge expense if needed.
Travel insurance is a broad category that is most well known for reimbursing you for travel costs incurred before some covered event. For example, you can’t go on the trip you have already paid for due to illness. Most of these insurance plans also cover lost baggage, trip delays, and medical evacuation. I saw numerous referrals to World Nomads offering this insurance, but there are many other companies that offer similar coverage. Just compare each category of coverage like trip cancellation, medical emergencies, travel delays, and lost luggage.
For travel insurance, https://travelinsurance.com is a good place to start. There are many companies offering this type of insurance.
Travel Medical Insurance
This insurance provides medical coverage for a single trip, or multiple trips of several weeks to several months to most countries you might visit. It usually includes medical evacuation and repatriation of remains. This insurance doesn’t cover trip cancellation by default but it can be added. However, it does cove medical emergencies an emergency evacuation.
To find companies that offer this type of insurance, do a google search for “travel medical insurance” and be sure to evaluate several different companies.
Expat Medical Insurance
Expat medical insurance is designed for people who primarily reside outside of their home country. There are a variety of deductible options as well as options for visits back to your home country. For example, you can get a plan with no US coverage, basic coverage for a limited number of trips, or up to 9 months coverage in the US.
This insurance also includes medical evacuation and repatriation of remains in emerging cases. As we have already found out, many of the companies offering this type of insurance do not cover preexisting conditions. European providers aren’t obligated to cover preexisting conditions, which is anything that you have been treated for in the last 5 years.
To find companies that offer this type of insurance, do a google search for “expatriate medical insurance” and be sure to evaluate several different companies.
Credit Card Coverage
Credit cards frequently say they offer travel insurance as a benefit with their high-end cards. The actual benefits vary widely so read the full disclosure before you settle for their level of coverage. Insurance available by paying for your trip with a specific card generally includes reimbursement for all travel payments you have already made at the time you have to cancel.
Trip delay coverage pays something if your delay is more than six hours and there is usually some coverage for lost baggage. Be sure to keep track of changes in benefits, in the middle of our trip one of the cards we had been using dropped their travel insurance coverage but there were additional things that we booked along the way on the card that now had no insurance, which can be a problem.
Full disclosure: Our experience with trying to make a claim on this type of insurance has been really terrible. We have also found that there are quite low dollar limitations on this coverage, so beware.
Insurance for OBT
Major Medical Coverage
Since Mike and I hit our out-of-pocket max for this year prior to our trip, we opted to extend our current insurance using COBRA. We also continued to ensure the kids until they got their own insurance in September. Always verify that your own major medical policy will cover any emergency medical expenses you might incur while abroad.
Traditional Trip Insurance (Credit card Coverage)
Before we paid for anything for our trip we extensively reviewed the travel benefits on our high-end Chase and Citi cards. It took multiple readings to determine that one of the cards was better for hotels and tours and the other was better for airfare. So, as I made my bookings, I selected the correct card for payments. We have also used credit card coverage for rental car insurance several times on our trip.
In addition to our medical insurance and the coverage offered by our credit cards, I purchased two additional travel insurance policies. The first one was a traditional Travel policy that covered air, hotel, tours and medical evacuation for all four of us, for the first month of our trip. I did this because the first month was the most expensive and everything felt a little uncertain before our trip started.
The second policy I purchased covered medical evacuation for the rest of our trip to augment the insurance from our credit cards and our major medical insurance.
Full disclosure: We did have to use the medical evacuation policy and I can tell you that IMG, our provider, did an exceptional job getting me out of the clinic in Zimbabwe and to the hospital in Johannesburg.
For more information about our personal experiences, see Our International Medical Experiences.
Insurance for Next Year Living Abroad
We have recently had to figure out our expat medical insurance for next year. It turns out that this insurance can be pretty cheap if you have no pre-existing conditions. In fact, we discovered very quickly that coverage and medical costs are generally lower overseas. The policies start ratcheting up in price when you add coverage for your occasional visits to the US. In our case, we found a provider associated with Blue Cross/Blue Shield who would cover us without any exceptions, for a price. It was the most expensive option, but it was still cheaper than extending COBRA, and the new policy has a much lower deductible.
Our long-term-stay visa requires that we have coverage of at least €30000/person for in-hospital medical and medical repatriation costs. The insurance we selected has far more than that.
It is pretty easy to search for travel insurance online but thoroughly compare the plans before making a choice. The majority of search results are for brokers who can be helpful but check them out for their legitimacy before you buy.
Do you buy travel insurance regularly? Have you been paying too much?
A lot of travel insurance charges you according to your age. This is not always true, however, so it is important to know if this is the case. You bay be able to find similar insurance that doesn’t do this.
Luckily, our medical insurance covers us out of the U.S. When I was in the hospital, while traveling last year in South America, the first thing they did was charge our charge card $8,000 to set aside for what they estimated our costs would be. We got 80% of that back from our insurance company. We did have to cancel part of the trip and that was on us. We feel like since they won’t cover Jerry for any heart issues, being pre-existing, we have decided to be self insured. We have saved hundreds/thousands if not more, by not buying Travel Insurance. According to the people in our Travel Club, when they have tried to get money back from these insurance companies, it’s very difficult. In our experience, you have to sign up for Travel Insurance within 14 days of making the reservations. We often add onto our trip, so it wasn’t really feasible for us. As we age, we may change our mind, but for now we go with just our own health insurance in the U.S. COBRA Is very expensive, so it sounds like you’ve made the right decisionis very expensive, so it sounds like you’ve made the right decision. You are right about the lesser costs you incur outside the U.S. I once had a cap on my tooth replaced in India and the x-rays, exam, replacing the cap only cost $30 in an English-speaking hospital.