On the road again? Don’t forget to pack insurance.

By | July 13, 2015

It’s summertime, and vacations are in full swing. If your travels will take you outside the United States, you’re probably making a list and checking it twice. Passport? Check. International cell phone plan? Check. Health insurance?

“But I already have health insurance, why do I need to worry about that?”

Obamacare: you can’t take it with you

Although the Affordable Care Act significantly reformed the health insurance market in the United States, most plans do not cover international travel. Fortunately, travel health insurance plans are widely available, inexpensive, and relatively easy to obtain.

Travel insurance plans are not regulated by the ACA, so they can still have annual and lifetime benefit caps, they do not have to cover pre-existing conditions, and coverage is not guaranteed issue. There’s also no requirement that plans cover the ACA’s ten essential benefits.

But travel medical insurance does provide peace of mind if you’re planning a trip abroad. Plans can be purchased for time frames as short as five days or as long as two years, and coverage is available for U.S. and foreign nationals traveling outside their home countries. A broad range of plan options are available to fit every budget.

Will my current plan cover me at all?

It depends on your plan. If you’re enrolled in Medicare, your Medigap plan might provide some coverage for international travel (Original Medicare doesn’t cover care outside the U.S., with very limited exceptions).

If you’ve got private coverage, it depends on your plan.  In general, life or limb medical emergencies are covered, but the onus is on the patient to prove that the situation was truly an emergency, and the cost of medical evacuation back to the United States is rarely covered by standard U.S.-based health plans. (Travel insurance plans generally do cover medication evacuations).

Does ACA’s mandate apply to frequent travelers?

But you’ll still need to keep your regular health insurance plan while you’re traveling, unless you’re going to be outside the United States for at least 330 days within a 12-month period.

Normally, a person with only travel medical insurance would be subject to the ACA’s individual mandate penalty, as travel insurance is not considered minimum essential coverage. But if your travel keeps you outside the U.S. for at least 330 days in a year, you don’t have to maintain U.S.-based minimum essential coverage.

If you’re in a situation where you’ll be traveling for an extended period of time, but less than 330 days, you’ll need to keep your regular health insurance coverage in addition to your travel insurance, in order to avoid the ACA’s individual mandate penalty. Students who will be studying abroad for a semester should check with their travel program to see what travel insurance is recommended, but they shouldn’t drop their regular health insurance during that time.

Renewing your travel coverage

Travel medical insurance is not guaranteed renewable, which means that if you need another policy after your first one ends, you’d have to reapply and go through medical underwriting again (similar to short-term insurance). And since travel insurance is not considered minimum essential coverage, the termination of a travel policy does not trigger a special enrollment period to purchase a regular ACA-compliant health insurance plan. Again, another reason to make sure that your travel policy is purchased to supplement your regular health plan, not replace it.

In the past, regular health insurance had many of the same caveats as travel insurance. But the ACA’s reforms have made us more accustomed to guaranteed-issue coverage that doesn’t discriminate against pre-existing conditions or limit coverage for essential health benefits. So it’s important to read the fine print on any travel insurance policy you’re considering.

Piper Kan and Reece Huculak-Kimmel both have stories that amount to a cautionary tale about the short-comings of travel insurance. Both little girls were born prematurely in foreign countries, and the extensive medical bills were not covered, despite the fact that in each case the parents had purchased travel health insurance policies and thought they were covered for any contingency.

The take-away? It’s important to pay careful attention to the written details and exclusions of the plan you’re considering. Don’t rely on verbal confirmations of benefits.

But that said, travel insurance is an excellent supplement to your regular policy, and will cover mishaps in foreign countries that would otherwise have to be paid out-of-pocket. Bon voyage!


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