If you are reading this, then you are either:
- Trying to find an easy answer to a difficult and complex question, OR
- You are as sarcastic and frustrated as we were while searching for health insurance
Since we recently left a great health insurance plan with our employers, we have been searching hard for the best option for our year of travel. Here is an outline of what we have struggled with, what the different considerations are and what we finally ended up picking and why!
This is the not the first thing you consider when you decide to take a trip around the world. It’s not glamorous, and I never thought it would be such a hassle. The following advice is aimed towards travelers who are U.S. citizens. From my research it appears that this is a much less complicated process for citizens of other countries. That may or may not be true, but I can only speak from my experience as a U.S. citizen.
Our considerations when searching for an insurance provider
- We both quit our jobs and were on short-term health insurance (which wouldn’t cover us internationally or last throughout our trip.)
- I am pretty healthy, but have had a few surgeries and hospital stays. Caroline is/has been perfect.
- We need to spend the least amount possible on health insurance premiums to stay within our budget.
- We want to be covered by insurance when we return to the U.S.
- We don’t want to pay high premiums when we return.
Why did we need health insurance?
I didn’t think we needed insurance at all until I learned about the “creditable coverage” provision in HIPAA (Health Insurance Portability and Accountability Act.) It basically states if you go without “creditable coverage” for more than 63 days, a future insurer can deny you coverage or delay the start of your coverage for anywhere from 6 to 18 months. You also run the risk of paying very high premiums. Insurance companies do this to deter people from gaming the system by only purchasing insurance when they get sick. The main issue here is determining what is considered creditable coverage. You may luck out and have a certificate of insurance accepted as creditable, but the safest way is to ask the insurance company specifically if they are considered creditable coverage in the U.S. If they are, then you know you will be covered and will not have any gaps when you try to get insured in the future.
Knowing this, we had three options when deciding what to do with our insurance:
- Go without insurance and take the risk, but save the money.
- Buy travel insurance with minimum coverage, but no coverage in U.S.
- Buy insurance that covers us in the U.S. and abroad.
You can assume from the list that the options go in order from least to most expensive. We are traveling on a budget and trying to find ways to keep our costs to a minimum. Insurance felt like one of those non-essential costs, especially when there are so many more fun ways to spend that money. Let’s go through the three options.
Option 1: Take the risk without insurance.
As we researched premiums and deductibles this option became more and more appealing. Health care can be inexpensive outside of the U.S. and we are generally pretty healthy. Although this option goes against my risk-averse nature, it seemed ridiculous for us to spend money on insurance in the U.S. (it still does!) when we weren’t going to be there for a year.
I know other travelers have thought the same and decided to remain uninsured while they travel. However, you take a great risk of returning to the U.S. without insurance for 6-12 months or of paying $1,000+ monthly premiums. If you have no plans to return to the U.S. and get insurance after your trip, or if you will be covered by an existing plan in the U.S. then you may be able to consider this option.
Cost: $0, but high risk of $$$ in the future.
Option 2: Buy special “Travel Insurance”
This option is the most recommended one on many travel blogs. You will find companies such as World Nomads and IMG Global offering these types of plans. I don’t recommend this type of insurance for anyone from the U.S. who plans to return and be insured again. The main issue here again is “continuous creditable coverage.” Neither World Nomads or IMG Global’s travel insurance plans are classified as “creditable” in the U.S. This means you will have a gap in creditable coverage while you are traveling. Be careful when researching insurance companies as it can be difficult to tell whether they are actually creditable or not. Some will tell you that they aren’t but you will “probably be fine.” To be safe, only choose a company that says in writing that they are “creditable coverage” in the U.S.
We quoted World Nomads at around $1,600 for two people for the year, which was within our budget. IMG would have been $1,400 with a $2,500 deductible. The best part of this type of insurance is the other coverages you receive. In addition to basic health insurance you also receive trip cancellation, interruption or delay, baggage, emergency and security evacuation, and car rental collision coverage. These additional benefits are why we have purchased travel insurance for shorter trips in the past, but with this trip being as long and as flexible as we want it to be, we didn’t need the additional coverages.
This type of insurance is generally considered secondary to the primary insurance you have in your home country. If you are going to maintain your health coverage at home, this is a good option to cover you while you travel internationally.
Cost: about $133/month
Option 3: Buy full coverage for the U.S. and abroad
This option carries the least risk, but is the most expensive. There are companies that offer global insurance, which will cover you worldwide. HTH Worldwide, Cigna, ihi Bupa are just a few of the companies that offer this insurance. As I have mentioned before, do your research and ensure that the company offers “creditable coverage.” These companies may also offer travel insurance which would not be creditable, so make sure you are selecting the worldwide health insurance when signing up. If you select a company that offers creditable coverage you will have insurance you can use worldwide and will not have any gaps in your U.S. coverage. You may even be able to cover pre-existing conditions with proof of coverage from a previous insurer. This option is what I would recommend for anyone traveling who intends to return and be insured in the U.S.
Cost: $124 to $520/month
What we decided on
After much research and deliberation, we decided to go with Option 3 and purchased a Global Citizen plan from HTH Worldwide. HTH has options with deductibles ranging from $0 to $25,000, and even has plans that will exclude U.S. coverage for nearly half the premium. Due to our budget and health condition we went with the $25,000 deductible at $124 per month. This allows us to continue our U.S. coverage at a low price, and still be covered if anything catastrophic happens. Obviously, we will have to pay out of pocket for any minor medical needs until we hit the deductible, but that is a risk we are willing to take (knock on wood.)
Make sure you research and apply for insurance well in advance of your trip. I didn’t fill out the application until about two weeks prior to our departure, and due to their requests for additional medical records, I didn’t receive the approval from them until we were at the airport on our way to Hong Kong!
Everyone’s situation is different, but hopefully this will give you some insight into how we determined what insurance we would need. This is probably the least fun or interesting thing to spend your time on when planning a trip, but if you don’t, you could be paying for it well into the future. Good luck!