Medical Insurance When You Are Out of the Country?What Should You Have?
Introduction: Mark and Betty were having such a good time on their European vacation. Then Mark became ill. Betty called down to the hotel front desk who summoned an ambulance. Next thing they knew, Mark was in a European hospital with pending surgery. Betty showed the hospital Mark’s Medicare and Medigap cards. The hospital wanted the money paid up front; they said they didn’t accept American insurance. How could Betty come up with $10,000? Isn’t that what their medical insurance was for?
Betty, as with a huge number of people, was probably operating under a misconception. Here’s the rundown on the insurance choices.
Medicare and Medigap: Here’s a somewhat unknown truth about Medicare. It does not cover you out of the country except in very limited circumstances. Although a few of the Medigap policies cover foreign medical care, they are limited in amount, generally to $50,000. So if you are in a European hospital, those hospital bills are going to come out of your pocket to the extent they are not covered by one of your insurance policies.
Private Insurance: My wife and I were covered for many years by an individual California Blue Cross major medical policy. It did cover us outside of the country. Fortunately, we never had any significant claim from a foreign vacation, but had it occurred, we would have ended up paying a hefty portion of the bill due to the providers not being in the Blue Cross “network.” That’s just one policy. I am told that many major medical insurance policies for those not covered by Medicare do not cover out of the country claims at all. Obviously, then, it is important to check to find out what your policy covers.
Travel Insurance: Many people purchase travel (package) insurance when they go on trips. Some purchase it to protect the cost of the trip, i.e. in case they become ill and can’t take the trip or for a variety of other reasons. In the past, I have purchased this insurance; but I did it because it had medical evacuation insurance included. The trip cancellation/interruption/baggage delay aspects just came with it as far as I was concerned.
Most travel package insurance policies’ medical evacuation coverage is not what you may think: Most cover evacuation (including air evacuation) from where you are to the closest appropriate medical facility. Although it will pay for a normal economy class ticket to get you home, it typically does not pay for medical evacuation (air ambulance, etc) to a hospital close to your home.
Why do you want real medical evacuation insurance: If you are going to be in the hospital or skilled nursing facility (rehabilitation from a broken hip) for a long time, you are going to want to be close to your home so that your friends/family can visit and you feel more comfortable. And the policy that pays for that is a medical evacuation policy. As with everything, there are differences. Some cover a trip to a facility near your home upon your determination; some don’t.
Maybe more importantly, as we noted above, if you are on Medicare you are not covered out of the country except in very limited circumstances. Similarly, Medigap policies and individual private policies are limited in their coverage. As we said, if you are in a European hospital, those hospital bills are going to come out of your pocket to the extent they are not covered by one of your insurance policies. That means you want your treatment in the States, not Europe, if it is going to be expensive and/or long in duration. (I have not checked into Medicare Advantage Plans on this issue.) And that travel package insurance policy is only going to pay for a typical economy class fare home–not the air ambulance that you need. That means you should have purchased the medical evacuation insurance policy that allows you to determine if it is needed, not them.
Cruise Ships: Just so you know, much the same theory applies to travel on cruise ships as you are typically not covered there by Medicare unless you are in a US port or within 6 hours of a US port (See page 3, 1st paragraph). Although Medicare does cover air ambulances, it will only cover it if you are in a geographic area in which Medicare covers. That means that cruise in Europe and the helicopter to get you to a medical facility ashore is probably not covered. Most travel package insurance policies will probably cover it as would most private major medical insurance policies that cover you in the geographic location in which you are located.
The moral of the story: I have a good friend, Mike Walsh of Johnson & Wood Insurance in Carlsbad, California. He handles casualty and liability insurance for a living. Although I could give you a long dissertation on the subject, he sums it up very nicely as follows: “Insurance is not for what will ruin your day, it is for what will ruin your life.” Since insurance is really for those things that are going to cause a serious financial hardship (i.e. change your lifestyle), is the basic trip cancellation insurance that will reimburse you for the $6000 trip the correct purchase or is the medical evacuation insurance that will pay for the non-medically necessary (but very financially necessary) $70,000 medical evacuation back home?
Summary: In summary, I would say that you want the medical evacuation insurance and some type of medical insurance with foreign medical care coverage (i.e Medigap, private major medical insurance, or travel medical insurance–the latter fairly inexpensive when not coupled with the normal trip cancellation insurance) that will cover at least the emergency portion of any medical bill for the trip. You can obtain quotes and compare policies at sites such as InsureMyTrip.com. My review indicates that medical evacuation insurance and travel medical insurance costs substantially less than the typical trip cancellation/ interruption/delay/medical (i.e. package) policy but covers what could be far more financially devastating.