Health & Travel Insurance: What to Know About Benefits, Exclusions, Repatriation, & Evacuation

by Lauren Pappone

Travel fanatics love planning a new adventure almost as much as the trip itself. Poring over guidebooks and internet message boards, packing, unpacking, and repacking just whets our appetites. Buying health and travel insurance, however, is decidedly un-fun. Reading technical descriptions of precisely how some faceless bureaucracy will allocate payment for your care if you crash a motorbike, get altitude sickness on Kilimanjaro, eat a bad taco, or develop a serious illness is both boring and nerve-wracking. You want to picture yourself grinning at the top of the mountain, not being carried to the helicopter landing pad by a barefoot porter. However, insurance is important. You are faced with the choices of decimating your travel fund or taking a very serious risk with your health. Insurance is expensive. It just is. Don’t go looking for some magically cheap policy, because you will not find it. If you do find something exceptionally cheap, ask why. Sometimes things are cheap because they are not as a good a product as the more expensive options.

Trying to decide on a policy often means sifting through complex literature without knowing what to look for or what questions to ask. I was blessed with a Jewish mother and a lawyer father with a law-firm insurance agent, all of whom teamed up to guide me through the insurance search with a parental paranoia and my best interests at heart (not to mention deeper pockets than I’ll ever have).

This is a guide to finding the options and asking the right questions as you sift through them.

Health insurance or travel insurance?

Yes, there is a difference. A big difference. If you have health insurance – because you have a job, kind parents, or a pre-existing policy – find out about the coverage area: where it will cover care and where it will not. Does it cover care overseas? Does it cover evacuation? In the unlikely event that you need to be quickly evacuated and brought home to a hospital, you do not want to get stuck with the bill. Depending on where you are, this could cost tens of thousands of dollars. Check also whether you have such coverage through any other service. For example, some American Express cards include or allow you to purchase travel and evacuation insurance. If not, you should probably purchase a travel insurance policy. This will cover the things your regular policy doesn’t – evacuation, overseas hospitalization, trip cancellation and sometimes even lost luggage. Once you get home, your regular policy will kick in and cover the rest.

If you do not have any insurance policy, read on and consider purchasing one. If something happens – you get cancer, you break your leg and need reconstructive surgery, you get raped and pregnant (all very unlikely and very unfortunate but ultimately possible) you will probably want to be treated in your home country. Most travel insurance policies will not cover you in your home country, especially if it happens to be the United States. In addition, some policies exclude treatment of long-term illnesses like cancer, or pay for only several months of care.

Real Health Insurance for People Who Do Not Have Jobs and Who Have Been Booted Off Their Parents’ Policies

These policies are decidedly more expensive and more comprehensive than travel insurance. They are also complicated and descriptions of benefits can be difficult to decipher. Make sure that you get answers to the following important questions:

Is the carrier licensed in your home state? Before you devote your time and energy into poring over tables and exclusion lists, find out whether the provider is licensed in your home state. Prices also vary by state. Massachusetts, for example, is a particularly restrictive and expensive state. However, it is also a state where everyone, by law, must be allowed to buy health insurance, regardless of pre-existing conditions. If you are going to be living overseas in a particular place, you may be able to use that address. Just make sure that evacuation to your home country is still included. It might be tempting to unearth old relatives who live in states where insurance is cheaper and easier to get, and then use their addresses instead of your own. Be careful. If you eventually file a large claim, the fact that you claimed to live somewhere that you didn’t actually live could void your coverage.
What are the out-of-country residence requirements? Does the policy require that you reside outside of your home country for a certain amount of time? How does it work if you need to come home for medical care before that time is up? Some policies meant for people who spend six months per year outside the U.S. will cover you in the United States if you come home sooner – but only for six months out of that year.

What is the lifetime maximum? One million? Five million? If you are buying coverage on the internet, make sure you know what currency the provider is using. And don’t underestimate how much you will need. One million dollars sounds like a lot of money, but in the case of a serious accident or illness (which is what you are buying insurance for) it could run out.
What exactly does it cover? This can be complicated, and everyone has different needs. A few important things to check that not all policies cover are: maternity, newborns, birth control, well visits to a doctor (preventive care), mental health and drug and alcohol addiction, long term illness (health insurance policies generally cover this, while travel policies may not), and evacuation (and lodging and travel for someone to accompany the evacuated person).
How much does it cover? Policies also differ in how much they cover different issues. Read carefully about: Intensive care unit stays, surgery, transplants, outpatient services (e.g. rehabilitation or prescription medications), emergency room visits, dental care, ambulance transport, and repatriation (sending your body home if you die).
Exclusions? What is excluded from the policy? Read this list carefully. Some policies will not cover you in the event of a terrorist attack, for an injury incurred playing sports, or any number of other situations. Distinctions are tricky, so read carefully. Some policies cover “tethered” sports (e.g. parasailing, bungee jumping) but not “un-tethered sports” (e.g. sky diving, hang gliding). Sometimes you can pay more for a “rider” so that you can be covered for things that would otherwise be excluded, such as sports or terrorist attacks. Policies commonly exclude glasses, elective or experimental treatment, war, immunizations, sexually transmitted diseases, hearing aids, anything that happens when you are under the influence of alcohol or drugs, and anything that happens when you are breaking a law (including traffic violations and political protest).
Who exactly does it cover? If you need coverage for other family members, it may be cheaper to put them all on one policy. Check whether the policy will cover children and spouses. Some will cover unmarried domestic partners, others will not. Some will cover newborns when they enter the family, and others will not. Insurance is usually more expensive for women than for men, and also gets more expensive as you get older.
Pre-existing conditions? If you have been seen by a doctor and might need medical care or drugs for that same issue again read this section of the policy carefully. It will define a pre-existing condition according to what the problem was, how long ago you were seen for it, and when it manifested itself, and it will tell you when, if ever, it will cover your care for this condition. There might be a waiting period, you may have to pay extra, or it may include only limited coverage for a sudden recurrence. Do not lie. It is easy for an insurance company to take a look at your medical records and find out that you had a pre-existing condition.
HIPPA certification? How will this insurance work when you switch to a new policy – when you return home, get a job, or switch policies? Some policies will consider any conditions you developed during their coverage as pre-existing conditions when you buy a new policy. That could make things difficult and/or expensive. Others (generally the more expensive and comprehensive policies) prevent such conditions from being treated as “pre-existing” when you switch policies.

Deductibles? The deductible is the amount that you pay out of pocket before the insurance policy kicks in. You will usually have a range of options, and the higher the deductible, the lower the premium. Do some math: compare deductibles with differences in premium prices, and critically evaluate whether you’ll be able to cover the deductible if you need to. How is your credit? Savings? Look at what is excluded from the deductible. Sometimes policies will cover evacuation or one doctor visit per year without making you pay the deductible. See also the section below about networks.
Networks? Insurance companies usually have groups of doctors and hospitals that are considered “in-network.” You may be required to go to these doctors, or you might be covered anywhere but have a different deductible depending on whether you get care in or out of the policy’s network. For example, a deductible may be $1,000 for an in-network doctor or hospital and $2,000 for out-of-network care. Look at how extensive the policy’s network is (in terms of numbers of doctors and hospitals and their locations) and compare that to other policies’ networks.
Group, student, and extreme policies? Some companies offer different policies for students, groups of people, or people intending on participating in dangerous activities like SCUBA diving or mountaineering.
Length of coverage and renewal? How long can you be covered by this policy? When and how many times can you renew it? You don’t want to have to find a new policy while you are traveling.
Paperwork and procedures? In the event that you need to file a claim, how do you do it? How accessible is the company and its employees? Will it pay the providers directly or do you have to pay and then file a claim? (Can you afford to do this?) Do you need pre-certification? Sometimes insurance companies will want you to ask them whether they consider something “medically necessary” before you get the treatment. The policy literature will advertise this information – read it, and think about how it will work given where you will be traveling.
Get it in writing! If you call a company to ask questions, make sure you understand what they are saying. If they give you assurances, ask where to find them in the policy literature. If you can’t find written verification of what the agent tells you, get it in writing. Saying “but they said on the phone this would be covered” is not going to help you if the policy literature doesn’t back you up.

Let me make a special note about lying when you’re applying for insurance. Lying can be tempting. It can save you money, and it might allow you to be covered by a policy that would reject you if you told the truth. It is also illegal, and it could result in your insurance being voided. (You file a claim, the insurance company investigates what you wrote on the application form, finds something that is untrue, and decides you are no longer covered – for anything – because you lied.) Think about this before you lie about your address, your drug, alcohol, or tobacco use, or any pre-existing conditions.

Now what?

Now that you know what questions to ask, who do you ask? How do you find these companies? There are a number of good resources, and I list several companies below as well.

Travel web sites. These are better for finding travel insurance than for real health insurance, but sometimes have information about both. In addition, many companies offer a range of different policies. A travel site may list only the travel options even though the company has other, more comprehensive policies. Lonely Planet (look in the Subwwway section), BootsnAll, and Rough Guides all include information about insurance. Some sites help you find appropriate plans and allow you to purchase them on their websites. BootsnAll has a phone number that you can call (toll-free in the US, 1-866-549-7614; and if you’re outside the US they’re on Skype as well) to ask questions about policies, and they are exceptionally helpful – no menus, no waiting, and they actually call you back.
Travel site message boards. Many travel sites include forums or message boards (e.g. Thorn Tree at Lonely Planet or the Members’ Forum at BootsnAll), and these often include a section about insurance. This can be a good place to read about what kind of insurance you need and ask other travelers about their experiences with particular companies.
For lucky people. If you have a job, or a parent with a job, find out whether the employer has a professional that they talk to about insurance. This person may know about policies that you do not (although they don’t know everything; do some research yourself, too) and can help you decipher the policy literature.

Some Policies to Check Out

This is not a complete or comprehensive list, but it can get you started.

COBRA. If you already have insurance through an employer or through your parents, you may be able to extend coverage after you quit your job, graduate from college, or get too old to stay on your parents’ policy. (Check how long your parents’ policy lasts for – some last as long as you are in school, some for 18 months after graduation, and others until you turn 21 or 25). This is probably the most expensive option (it would cost $400/month to stay on my dad’s insurance after I turn 25), but will also probably offer the best and most comprehensive coverage.
World Nomads. This is only travel insurance, but it is inexpensive, internet-based, and gives you the option of being covered worldwide or worldwide excluding the United States and Canada. It will not cover you in your home country. You can add coverage for valuable items like cameras or iPods. Note that the currencies listed are in Australian dollars.
HTH Worldwide. Fairly comprehensive worldwide coverage. Health and travel insurance with relatively few exclusions, a large network, and fairly low prices.
IMG Global. A range of policies, from strictly travel to more comprehensive health with worldwide coverage. It also offers options for students, sports, groups, and groups of people working overseas. Read the out-of-U.S.-residence requirements carefully.
Get going! Some policies (World Nomads) can begin coverage immediately, while others require you to wade through bureaucracy, red tape, and paperwork before you are accepted and coverage begins. Make sure you have enough time to do this before you leave or your previous coverage ends. Leave time and plan B options in case your first choice plan denies you coverage. (Even if you are a healthy individual, coverage could be denied for something as simple as the state in which you live or your college marijuana use. Believe me, I know.)

Everyone will approach this problem differently depending on their health, their comfort with risk and third-world hospitals, and their financial situations. If it helps you, these are the potential situations my mother described to me when I was deciding between a cheaper, limited policy and a more expensive but more comprehensive plan.

We buy a comprehensive, expensive policy, and nothing bad happens: We waste some money.
We buy a cheaper, limited policy, and nothing bad happens: We are relieved and waste less money.
We buy a comprehensive, expensive policy, and something very bad happens: I get the care I need. We are relieved that we have this insurance.
We buy a cheaper, limited policy, and something very bad happens: We lose everything – the house, the cars, and my brother’s college tuition – to pay medical bills. I don’t get the best care that I could, and my parents feel that they’ve made the biggest and worst mistake that they ever possibly could.