You’ve found your perfect place to live abroad or a beach where you can live a nice life in retirement, but there are still nagging details that go along with the fun. If you’re going to move abroad for an extended time, one of your first questions is probably going to be, “What am I going to do about health care? Do I need to buy some kind of international health insurance?”
Well, yes and no. There’s not one easy answer to this and a lot of factors can change the answer depending on where you’re going to live as an expat, how old you are (Medicare usually doesn’t cover you outside the USA), how healthy you are, and how much you want to gamble. If you are just a traveler, paying for medical care abroad is not going to break you. You can combine out-of-pocket payments and some kind of annual travel insurance plan and be all set.
If you’re brimming with cash, you might want a platinum expatriate insurance plan that covers all your expenses where you’re living abroad and when you return. This way you have total peace of mind, but may be paying more than you need to. On the other hand, if you’re a young and healthy digital nomad, you might decide it’s not worth it and just self-insure, paying everything out of pocket and hoping no disaster strikes.
Or you can settle on something in the middle.
International Health Insurance for Worst Case Scenarios
In the olden days, people only got insurance for what they couldn’t take care of themselves if there were a disaster. Or when the odds of something happening were too high to ignore. So if it would cost $20,000 to rebuild your house, for instance, you wouldn’t want to spend $5K a year on homeowners insurance.
Health care has gotten progressively more expensive though, especially for Americans dealing with a broken for-profit system. So the odds that an accident could bankrupt you financially are too high to mess with. If you’re outside the USA though, the odds are much lower of that—in some countries close to zero.
So a whole lot of expatriates do what we’ve done while we lived in Mexico: pay for everyday health care expenses out of pocket, but have a back-up insurance plan for catastrophes and USA visits. We have a high deductible of thousands of dollars, but we could come up with that amount if we had to. We could not come up with what an average hospital stay costs in America: more than $22,000. Imagine if you had to stay a week after an accident!
We’ve done a fair bit of research on this subject to figure out the best and most cost-effective solution for us. It hasn’t been cheap either time, as a family of three or as a couple in their 50s, both times needing to visit the U.S. regularly for business and family reasons. As you’d probably guess, getting an international health insurance plan is far cheaper if you can always avoid the USA than it is with that overpriced health care system in the mix. Insurers see all the numbers and know how ugly they are stateside.
The first time we lived in Mexico, we just took our chances and paid out of pocket. The second time, we used a company with the very generic name of Health Care International. The next time we used a different one that eventually went bankrupt and now we’re on a Mexico/USA one from Cigna. We were using a broker called WeExpats with a Mexico office the second time around, but after the company we worked with through them went bankrupt and it was taking them two months to switch us over to another, we decided that working so hard to give them our money was not something we wanted to continue doing.
Others that I know other people have used include Cigna, Seven Corners, Allianz, AXA, and Aetna. We have never had to file a claim, fortunately, so I can’t speak to that part from personal experience. So far so good on staying healthy.
Can You Use Travel Insurance as Expat Insurance?
I’m a big advocate of travel insurance and I buy an annual policy through Allianz. Some friends who are nomadic use WorldNomads. If something happens to us on the road, in most cases we’re covered. Plus there is back-up for a canceled flight or lost luggage.
In general though, it’s hard to use travel insurance as international medical insurance for expatriates because that’s not going to cover you where you’re living. It’s meant to cover you when you’re on the move. In theory you may be able to get away with filing a claim if you’re still using a home country address as your principle one, but if they contest it and you have to start showing a string of documentation you could be in trouble. Read the fine print carefully.
If you’re paying for local medical costs out of pocket though, and are only worried about what happens when you’re in another country, this could be a good option. You’re basically covered for whatever medical limit is on the travel insurance policy, provided you don’t have that nasty accident where you live.
International Insurance You Can Turn On and Off
One hybrid solution we looked into would be a good one if we were only taking short trips back to the USA. It’s a relatively new company called SafetyWing that lets you turn your insurance on and off based on the actual time you’ll be in that country. So if you’re going to be outside the USA for most of the year, but back for a week and a half at Christmas to see relatives, you can just buy a policy from SafetyWing where you pay by the day.
The cost is quite reasonable, like $168 for a month including time in the USA for someone in their 50s. It’s even less if you exclude the United States, plus of course you can get it for a shorter period. That’s with a $250 deductible and we would have used this for every trip back except for one factor: there’s a maximum length for the policy. As usual, the out-of-whack costs in my country of birth throw a wrench into the standardization:
For every 90 days, you are covered for up to 30 days in your home country (15 days if your home country is the US), for unforeseen eligible medical conditions.
If you stay in your home country longer than 30 days (15 for USA), your coverage is void until you leave. The coverage resumes once you are out of the country again.
So…since our last trip back was a month and our next one is going to be too, this doesn’t cut it. For nomads who are moving around though and people who have no reason to go to the states, you can go home for 30 days and be covered.
The SafetyWing coverage is pretty good overall. Like most, they won’t cover pre-existing conditions except for a minor flare-up, but they do cover scooter accidents (the most common kind for travelers it seems) and there’s medical evacuation insurance in there. Check pricing for your age and length of time on their site.
With any kind of international health insurance plans for expats that you are considering, take the time to read the details and really understand what you’re getting. Most won’t cover you in a war zone (which includes Venezuela and Pakistan these days) and they won’t cover preventative care. Naturally, the higher the deductible, the lower your premiums. Paying for a whole year at once is usually cheaper than paying monthly.
For annual plans, there’s a big advantage in working with a broker who really understands the market: they can walk you through the different options and they know who is good about paying off claims instead of making your life more difficult. They make a commission from the company, but it won’t cost you any more than if you went direct.
Have you purchased any kind of long-term global health insurance plan as a digital nomad or expatriate? Tell us how it went in the comments.
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