Health Insurance for Long Term Travel

Health Insurance was probably the hardest issue that we had to figure out. As we started doing research, we found the following issues:

• Most US health insurance policies will not work outside the country. It’s actually worse; except for Medicare, most only work within the city where you are living.
• Since Ian is self-employed, he had an ACA (Obamacare) insurance plan which only worked in San Diego. Luckily that plan provided an automatic travel insurance policy for emergency care. This is one of the reasons we had to maintain a San Diego mailing address, otherwise his health insurance might have been canceled while on the road trip.
• Ann qualifies for and recently applied for Medicare. Even though Medicare is not valid when traveling overseas, if she didn’t sign up for and pay for Medicare Parts B & D, she would have faced a penalty for the rest of her life when she did apply after we returned. In addition, she faced the potential of being denied for a Medicare Supplement Plan.
• Private health insurance for US citizens traveling internationally is available, and it’s called Expat insurance. But most require the applicant to be a legal resident of a specific foreign country. These policies usually greatly limit the amount of time that can be spent in the US in a year. They are also underwritten, meaning that you can be denied coverage when applying.
• The ACA requires that everyone have health insurance or pay a penalty (the Individual Mandate). Expat Health insurance policies do not count as fulfilling the individual mandate.
• There seems to be a lot of confusing information on the Internet from long term travelers about travel insurance vs. expat insurance. Travel insurance is the choice if you will continue coverage in your home country either by paying or having it provided in your country of residence. If that is not the case, then Travel Insurance is dangerous because if you get so sick that your care would cost more than repatriation, then they may just ship you to your country of residence.

The first decision we faced was whether to have Ann sign up for Medicare Part B & D with a Medicare Supplement plan or a Medicare Advantage plan. Since we were only planning on being gone for a year, we determined the cost of Medicare Part B, $135 per month, for a year was worth not having to deal with a penalty or risk for the rest of her life. When deciding on Supplement vs. Medicare Advantage, we found the website RVer Insurance Exchange to be a big help. It laid out our options and we went with a Medicare Supplement for $128 per month and drug plan for $17 per month which means that anytime we are in the US, Ann will be covered anywhere in the country. If we were planning at this point on being long-term expats, our decision might have been different. The site also lays out the options for someone too young to qualify for Medicare and wanting to travel around the US. The story is pretty dismal with traditional health insurance.

What to do about Ian? Our first option was to continue his ACA plan for 2018. His plan provided automatic travel insurance when away from San Diego for emergency care while traveling. His ACA plan cost $845 per month, the early news was that there might be a 15% increase for 2018, and we wouldn’t qualify for a subsidy based on our 2017 income. Adding excitement in the summer of 2017 was the Republican effort to repeal the ACA.

With a lot of research, scouring long term traveler blogs, mainstream expat resources (International Living, Live & Invest Overseas), expat forums, etc., we were able to identify three insurance companies which offer Expat policies that didn’t require residency in a specific country. They are GeoBlue (the international arm of Blue Cross), IMG, and ISA (a broker selling policies by Azimuth Risk).  An interesting point about expat health insurance is that there are two different types of policies, those that include the US and those that exclude the US. The ones that exclude the US are about 50% the cost of the ones that include the US (an indication of just how screwed up the US health care system is). We also noticed  that the premiums went up rapidly with age. A policy for Ann would be significantly more expensive than a policy for Ian, even excluding coverage inside the US for Ann. We ruled out the GeoBlue policies because the premiums were significantly higher.

The costs were about the same between the other two, and we had heard good things about both companies. The details of the policy through ISA seemed to fit our situation better and we got great service from the broker. For Ian, the cost of the policy through ISA was significantly cheaper than keeping his ACA policy: $2200 per year for a policy with a $2500 deductible that included US coverage compared with an expected premium of about $1000 per month with an uncertain political future. So we chose this for Ian. He is limited to being in the US for 6 months a year.

2018 Update: When Ian’s policy came up for renewal in September of 2018, the premium jumped to $4200 with the same coverage because he turned 60. We could have saved a little money by increasing the deductible to $5000 or a lot of money by switching to basic policy instead of the extended policy. But the switch would have been one way so we bit the bullet and stayed with the same policy for October 2018- through September 2019. We researched ACA policies for Ian in the fall of 2018 for the 2019 coverage year. With the subsidies, it would have cost a little less but with a significantly higher deductible, but then we would have needed to add on the cost for travel insurance.

For Ann, the costs were much higher for the expat policy. Since we are planning on being back in the US about every six months, and she has coverage inside the US, we decided to take a different path.  We purchased a GeoBlue Medical Travel Insurance Policy for $850 for six months with a $500 deductible through ISA.

2018 Update: Before we leave Phoenix, about every six months we purchase a travel insurance policy for Ann to cover her in the countries we are visiting. It’s critical to do this before traveling more than 100 miles from your legal residence. We have been able to find policies for about $500. If out trips were less than 90 days, we could purchase her an annual travel insurance policy for about $500. So far we haven’t been able to keep our trips to less than 90 days.

So we were able to be cover both of us for a combined total of $605 ($681 for 2018) per month including the cost for the Medicare policies. More than $200 per month less than Ian’s ACA policy alone was costing us with even greater savings when considering the estimated cost of ACA for 2018

What about the AFA individual mandate, you ask? There is an exclusion for people who are going to be outside the country for 331 days, which should be the case for us during the first 12 months.

Ian & Ann