Travel Insurance or Expat Medical Cover?

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Travel Insurance or Expat Medical Cover?

by Alex Routh


The last article about non-admitted medical insurance policies generated questions about travel versus medical insurance, and the appropriate choice.


Let’s define travel cover: Travel insurance is usually for short intervals but some policies from Australia I’ve seen can be for up to 3 years. Travel insurance covers accidents and emergencies only, and won’t cover urgent or elective medical problems. Travel insurers expect you to end your trip and return home for elective or urgent treatment, and some policies require return immediately once diagnosed. For example, if you were diagnosed with cancer while on a travel policy, there might be an urgent requirement to commence treatment, but it is not life or death to wind up your affairs and then return home to commence treatment. Travel insurance is also not renewable, if you have a serious medical problem, your cover will end at expiry or when you return home. The underlying assumption behind travel cover is that you have proper medical insurance at home to return to in the event of an urgent or elective medical condition.


Medical insurance covers everything travel insurance covers plus urgent and elective medical treatment. Importantly, it is guaranteed renewable if you are in the midst of a course of treatment at renewal time. If you have international medical insurance, you don’t need travel insurance unless you are traveling outside your area of cover.


For the Americans, because insurance is governed at the state level, there are laws prohibiting outside insurers from insuring residents in any state. Policies therefore have provisions to limit cover if you are outside of your state for more than 6 months. The assumption is that you are in another state, and if they are covering you, then they are violating another state’s regulations and subject to huge monetary penalties. They don’t seem to consider that you might be living out of the country! So the danger is that they might cancel your policy if they learn you are resident out of your home state for more than 6 months. That’s where expatriate medical insurance comes in to replace your stateside insurance. If you are only resident outside your home state for less than 6 months, then travel cover will do, so long as you maintain your cover back home.


For the Canadian case, if you are resident outside Canada for 183 days annually and satisfy a few other conditions, then you can live tax free. The downside is that you can’t be on your provincial medical plan back home, and it takes 3 months to enroll again after returning permanently. Until you are back on the roster, you could be paying thousands of dollars per day for a hospital bed in Canada. Canadian hospitals charge American pricing to non-resident Canadians and foreigners. So if you are still paying Canadian taxes and a resident, you can buy a “Snowbird” travel policy. If you are not, then you need medical insurance. The British case is similar in that a few years ago the National Health Service changed the rules regarding residency. If you are not “ordinarily resident” in the UK, then you’re not entitled to free NHS treatment and you’re going to pay high prices unless you have expat medical cover.


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