Do you know what the differences are between health insurance and travel insurance? Knowing the difference could save you a lifetime of medical bills. If you’ve considered medical tourism, or if you just live abroad, this article is for you:
• Cover yourself for unexpected illnesses or accidents abroad
• A short term insurance policy is not underwritten and only covers you for a defined period of time.
• A long term policy will cover you for life and is more comprehensive.
• Medicare will not cover you abroad if you are a US citizen abroad.
Living here in Latin America, we are fortunate to have access to excellent healthcare and doctors, but being prepared for the costs of unexpected health treatments should be a top priority. If you travel here or are living permanently, it is advisable that you acquire expatriate health insurance, travel insurance, or a medical evacuation plan. Healthcare can be very cheap for the average medical incident, but for the more serious cases you can be out $10,000 USD to $500,000 USD for the more serious cases. In some countries—such as Ecuador—insurance is mandatory and monitored by the government. Your length and purpose of stay here should be the basis of what type of insurance you should get. Let us differentiate between the two.
A travel insurance plan is designed to cover you for a new illness or accidents abroad. Policies can be purchased from five days and extended for up to three years. These policies will also have some travel benefits built in like lost luggage and missed plane connections.
Travel insurance policies can be purchased with limits from $50,000 – $2,000,000 USD of total coverage, and are offered to clients up to 79 years of age. There are deductibles from $250 – $5,000 USD. The policies do not require medical questions to be answered on the application, but any preexisting conditions will not be covered. If you have a claim that isn’t an emergency, that the insurer perceives as preexisting, they will make you prove it. This makes claims difficult to get approved.
The most commonly overlooked feature with travel policies, is that they have a set end date. This means that any condition that is developed during the policy will no longer be covered once the policy ends. If you need medication for a lifelong disease, or lifelong treatment for an accident, you will need to pay out of pocket once the policy expires. These policies are meant to fill in the gap where your long term health policies don’t cover during trips.
Long Term Health
An expatriate health insurance plan is meant for individuals that are living abroad for 6 months or more during the year. Plans generally allow for treatment at any doctor’s clinic or medical facility worldwide minus a few countries barred from the US State department. If you purchase the option for care in the US, the care is limited to a provider network of doctors and facilities in the US.
One major difference between the two is that long term plans require underwriting. This is a process that requires a review of your health conditions. Policies can be issued that might exclude a preexisting condition that someone might have. Due to being underwritten though, it is much easier to get claims approved than a travel policy, as you have a baseline for your health that the insurance company can reference.
The main benefit of a long term health plan, is that if you develop a chronic illness or condition while you are insured, the insurance company will continue to cover the condition for life. This includes any medication you need, any follow up surgeries, home care of nurses, etc. It is highly recommended to start a health plan when you are younger and healthy, before you need it. Doing so can save hundreds of thousands of dollars in the time of your lifetime if something were to happen to you. If you wait until you are sick you will have to rely on government healthcare systems like ACA or Seguro Popular.
Many clients are surprised how affordable health insurance plans can be when compared to countries like the United States. It is important though to review the benefits offered. Some policies will only reimburse costs based on a preset schedule for procedures. Better policies will provide for reimbursement at usual and customary rates for that procedure in the US. This is very important if you are traveling in high cost areas like Singapore, Hong Kong, or the US.
It is also important to review how your deductible works. Some health insurance plans will have a separate deductible per illness, or for different parts of your body. During major medical events, these individual deductibles will be triggered and leave you with a large bill. The best plans have a single ongoing deductible per year, for every claim submitted. Lastly, review the waiting periods for coverage for new illnesses in your deductible. You can find more information about different items to look for in a policy on this article: Health Insurance Buyers Guide.
For American individuals over 65 that have Medicare, the health insurance plan itself does not cover foreign care. Medigap policies offer some emergency foreign care, but many plans are limited to the first 60 days of a foreign trip and typically only have $50,000 of coverage. Check with your state provider to see exactly what coverage you might have and their terms and conditions.
Clients that rely on foreign care might consider a medical evacuation policy to return them back to the US or Canada for major illness or accidents. These policies are a transport service, so they do not care about your health history, age, or other items insurance companies look into.
It is very important to realize what has to happen to you in order to qualify for medical evacuation, and exactly where they will transport you.
The best plans will evacuate you for the majority of hospitalizations, to your hospital of your choice, from anywhere in the world, on their own planes. Many plans sold will only evacuate you during life threatening incidences, to the most expensive hospitals along the border, and only act as a broker trying to bid out your evacuation to the cheapest air ambulance they find.
The most important thing to realize with these is that many serious medical conditions will not allow you to be evacuated. as it would not be safe to do so. If you are having a serious heart attack, stroke, or even a trauma related injury, the doctor in charge of you will not approve the evacuation. If you rely on medical evacuation, make sure to have a large fund set aside for treating you until you are stable enough to be evacuated. You can find more information about medical evacuation here.
Are you confused or want a price quote? WeExpats has brokers to help you find a policy to protect your adventure abroad. We have brokers to sell you US based policies that work worldwide like VUMI, WEA, IMG Premier Health, and more. We also have a partnership with a reputable Mexican agency to help you get any local Mexican policies you may need like homeowners, auto / boat, commercial, etc.
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