Traveling Abroad? Consider Medical Insurance

Without supplemental coverage, you could face a big upfront bill.

Video: Health Insurance Basics

Video: Health Insurance Basics

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Trish Watlington was ready to embark on a family sailing trip in the British Virgin Islands three years ago when she landed instead in a tiny Tortola hospital. The San Diego mother of three had awakened in the night with a high fever and was lapsing in and out of consciousness. Her vital signs entered the danger zone, and doctors feared sepsis. "They cleared out a storage closet, started an IV drip, and called it the ICU," remembers her husband, Tom. An air ambulance from a nearby island was available—for $8,000 upfront—but first he had to find a physician and a hospital somewhere that would agree to admit her. After nearly a day of panicked phone calls, he was able to reach a willing doctor at a San Juan hospital. Once stabilized in Puerto Rico, Trish improved as inexplicably as she had fallen ill, indicating some mysterious virus. They were lucky, Tom notes. Still, he says, "it was a real nightmare."

Before their trip, the Watlingtons, like a lot of Americans, hadn't given much thought to what might happen if they became ill or injured while traveling abroad. "There's no 911," says Michael Zimring, the director of the Center for Wilderness and Travel Medicine at Mercy Medical Center in Baltimore. Travelers who need medical attention outside the United States may be surprised to find that payment is required on the spot and, in some countries, even before treatment. Most health insurers—including basic Medicare—will not cover any costs outside the country. Some say they'll pick up the tab after the fact but will apply a higher deductible, provider restrictions, and other limits. In fact, many insurance companies have trimmed coverage abroad in recent years. And no matter what your plan is, you're generally on your own if you need a medical evacuation, which can cost as much as $100,000.

Before you embark on that bungee-jumping trip or other adventure vacation, it's smart to check the fine print on your health insurance policy and consider whether supplemental insurance, which is available for as little as a few dollars a day, makes sense. "Individuals should be asking what exactly is covered and what is the process they need to get care," says Robert Zirkelbach, spokesman for America's Health Insurance Plans, an industry trade group. For example, some plans might cover treatment in a hospital but not in a doctor's office. Kim Bailey, a senior health policy analyst with the consumer advocate group Families USA, suggests finding out what it takes to file a successful claim—before you leave. "It's in the insurer's interest to limit the amounts that are paid out," she says, "so the consumer really needs to be savvy and follow the process to a T."

A separate travel policy can fill in gaps by guiding you to healthcare facilities and directly paying providers. The health coverage is often bundled with trip interruption and cancellation insurance, and it can be purchased directly from suppliers or through travel agents and tour companies. (Compare policies at insuremytrip.com). The price of a Travel Guard AIG policy, for example, typically runs 6 to 7 percent of your trip's cost, depending on your age. At Medex, policies start at less than $2 a day.

You'll want to find out to what extent, if any, an insurer covers an evacuation. Most medevac plans cover the cost of a transfer to the nearest adequate facility. "If you're in India, they'll take you to Singapore, not necessarily to Manhattan," says Phyllis Kozarsky, a travelers' health expert at the U.S. Centers for Disease Control and Prevention. Some companies, like Medex, promise to repatriate patients once they're stabilized, which could mean via air ambulance or an upgrade to business class if their condition puts them at risk for complications, such as deep vein thrombosis.

Should all travelers consider extra insurance? "Probably not," says Kozarsky. She does recommend it if you have an underlying medical condition or are headed to a destination in which you'd rather not undergo surgery. However, even those in top shape risk injury. In fact, the leading cause of preventable deaths abroad is car accidents, and drowning is up there, too. Tom Watlington, for one, isn't taking any chances: "We'll never again travel overseas without insurance."