Go Local, Go International, Or Go Naked?

 

Dear Student,

We’ve discussed how to consider and choose among residency options… and I’ve walked you through how to plan for your total tax liability in your new country of residence.

Today, therefore, we’re going to consider the third of the three most important practical issues you should be addressing at this stage of your live- or retire-overseas planning: Health coverage.

Bottom line, you have four options: an international policy, a local policy, a travel policy, or no policy at all.

This fourth option can be more reasonable than it may seem, depending on where you decide to relocate and spend your time. In some countries on my favorites list (Thailand, for example), medical care is so affordable that it can make sense to pay for it as you need it, rather than to insure against it. Most people, though, most places in the world, feel more comfortable knowing that they’re covered in case of medical emergency or, certainly, calamity.

Not everyone is comfortable going naked, as it were.

This means you’ve got to decide whether you want an international policy, a travel policy, or a local, in-country one.

One of the main advantages of an international health insurance policy is that it can cover you under all circumstances anywhere in the world, making it a good option if you intend to travel regularly beyond your chosen overseas haven; if your go-overseas plan is to move around among two or three countries; or if you, like our Intrepid Correspondents Paul and Vicki Terhorst, intend never to relocate anywhere but to roam the world perpetually, discovering and exploring as your wanderlust dictates.

An international policy also can be a good option if you’re an American and intend to divide your time between your chosen overseas haven and the United States, because it can be possible to purchase an international health policy that will also cover you when you return or pass through Stateside.

This is the kind of coverage Lief and I have opted for. Our Bupa International policy, based originally in Ireland but now in Panama, covers us anywhere in the world, including in the United States when we visit. We’re paying extra for this, as the U.S. is the most expensive place in the world to obtain medical care. Given our lifestyles and travel schedules, though, we decided recently to make this additional investment.

All that said, an international health insurance policy has an important downside: It’s more expensive than a local one, perhaps substantially more expensive. Local medical insurance can cost less than US$100 a month. In some countries, depending on your age, less than US$50 a month.

It’s important, though, that you understand what you’re buying. Policy options, details of coverage, deductibles, and premium costs vary dramatically both country to country and agency to agency within a country.

In addition, local insurance providers accept new policyholders only through a certain age that is typically younger than the cut-off age for an international policy. In other words, depending on the country where you’re intending to relocate and your age, a local policy may not be an option. You may have no choice but to invest in a (more expensive) international policy if you want formal health coverage.

Note, too, that some in-country insurance companies allow you to renew your policy only until a certain age. Others offer lifetime coverage.

Bottom line, though, if you qualify, in-country insurance options in some of the world’s top overseas havens can be remarkably affordable.

Uruguay, for example, boasts one of the world’s most affordable in-country options for obtaining medical treatment as a resident here. For around US$50 to US$100 per month, you can obtain hospital-based coverage through two programs, La Asistencial and Sanatorio Mautone. As a member of either of these programs, you are covered for all in-patient treatment, surgery, emergencies, tests, even after-care in your home.

It’s tremendous coverage and an amazing bargain, especially considering the standard of the care. However, you must understand that this is not health insurance, per se, but a hospital-based program, meaning the coverage does not follow you to any other hospital or medical facility within Uruguay and provides no coverage outside the country.

With an international health insurance policy from a carrier like Bupa, on the other hand, once insured, the coverage continues for the rest of your life, as long as you pay the premiums. Bupa can’t deny renewal.

Moreover, Bupa is a big and solid operation. When it comes to health insurance, you may feel more comfortable buying from someone who’s likely going to be around in 10 or 20 years… when you need them.

And, again, perhaps the biggest benefit is that a Bupa policy, for example, is usable anywhere in the world.

Bupa rates vary depending on the country where you’re living. For example, a 60-year-old retired in Panama can get a policy from Bupa, with a US$5,000 deductible, for about US$4,500 a year. That’s US$375 a month. A 70-year-old living in Panama will pay just over US$12,000 for the same policy. That’s US$1,000 a month. Much more costly than local in-Panama coverage but still less expensive than typical U.S. health care.

Here, then, is the thinking you should entertain as you consider your options for health insurance overseas:

First, do you want a local policy or an international one from a company like Bupa? There are pluses and minuses either way.

Second, if you intend to be only part-time in another country, spending only a limited time abroad each year, perhaps what you want is not health insurance but travel insurance.

Finally, depending on where you’re thinking about taking up residence as a foreign expat, you could consider the option of going without insurance, period.

This is a very personal choice. The most important thing is that you can sleep at night. If the thought of going naked, as it were, sounds horrifying, don’t consider it.

However, I know a number of expats who do just that. Since these folks spend most of their time in places where the cost of medical care is extraordinarily low, they don’t worry about insuring against it. Again, Thailand would be a good example.

What’s more, in some countries, once you become a permanent legal resident, you’re eligible for free health care. During our years living full-time in Ireland, for example, we enjoyed medical care at no cost, including coverage for the delivery of our son, Jack. This would be the case in France, too, if you qualify for full-time legal residency.

Which option is right for you? In short:

Local insurance is cheap but limited in its coverage. International insurance is more expensive (though less expensive than comparable coverage in the United States, for example) and should cover you anywhere you travel. What you decide to do depends on your age, your current health status, and your overseas plan. Lief and I carry a Bupa insurance policy with a high deductible. We’re still relatively young and healthy, and we move around a lot, typically in countries where health costs are low, so the high annual deductible isn’t a concern for us. We’ve decided that we don’t mind paying as we go for ordinary medical care (Jackson’s sore throats, for example, and Lief’s two dislocated shoulders). However, we want to be covered in the event of a medical catastrophe anywhere in the world. That’s what our high-deductible Bupa policy allows for.

Most countries have both public and private health care facilities. Public health care systems (also called social security systems in many countries), especially in developing nations, typically offer a lesser standard of care than you are probably accustomed to. If you are traveling to (or living in) a country that does offer private health care, I recommend that as your number-one option for medical and emergency treatment.

If you determine that you’re not comfortable with (or not eligible for) the public health care system in the country where you intend to live or retire, following are your other, paid options.

1. A Hospital Insurance Plan

In many countries you can arrange medical insurance through specific private hospitals; I gave an example above of such a plan currently on offer in Uruguay. As I explained, these hospital insurance plans are not general health insurance, and they cover your treatment in that hospital only (in some cases, you can also be treated at an affiliated facility). If you travel outside the country or even within the country but far from the hospital through which you’ve organized your coverage, and you find yourself in need of medical care, you could be in trouble. You’ll either have to pay all medical costs out of pocket or find your way back to the hospital where you’re insured (covering the related costs yourself). Traveling back to the hospital may not be a viable option in an emergency.

Furthermore, the care you receive with a hospital insurance plan is sometimes not as good as it should be. Say you have a serious health crisis and are admitted to the hospital for an extended period. You mount a hospital bill upwards of, say, US$10,000, yet you have paid only a total of US$5,000 in premiums to your hospital plan. In this case, the hospital may take steps to cut costs. It is not unheard of for hospitals to withhold tests or treatments if they feel the patient has become too expensive.

Also, hospital plans generally do not have long life spans. The hospitals tend to lose money on these programs, and when any business is losing money the easiest solution can be to pull the plug. You do not want to have paid your insurance premiums for a number of years, assuming you will be covered for life, and then discover suddenly that the hospital will no longer honor your policy. By this time, your circumstances could have changed. You could have passed a certain age or you could have developed some condition, making it more difficult now to obtain alternative coverage.

Hospital insurance policies are risky but can be a good option if you live close to the hospital offering the coverage and if you do not plan to travel much throughout the country or abroad.

2. Travel Insurance

Travel insurance is a viable option if you will not be residing overseas full-time. You can purchase travel insurance through your travel agent or over the internet.

An upside to travel insurance is that it often covers personal belongings and luggage. Travel insurance works best if you plan on staying in a country only a short time, for example, a two-week vacation in Italy or even, say, two months in South America.

Make sure you inform the travel insurance company if you plan to participate in high-risk activities, such as white-water rafting or mountain climbing. Many policies will cover you for injuries sustained during these kinds of activities but only if you have purchased (and paid for) the corresponding policy. It can be worth the extra expense. If you have an accident while scaling a rock face but don’t have coverage for high-risk activities, the insurance company will not cover your medical expenses from that accident.

Travel medical plans are as popular for their low cost as for their guaranteed issue. You won’t have to complete a lengthy health history, but coverage can be put into effect within minutes. Some travel medical plans will even pay for pre-existing conditions and have high age limits (even 80+ years old). Even at older ages, you’ll still be guaranteed issue with no medical questions. Depending on the time frame of your trip, it’s possible for you to be covered for short incidental trips back to the United States after you depart.

Many people buy a low-cost, short-term travel medical plan to give them time to settle in their new country to see for themselves what their other options would be locally. If you find a better option once you land, then simply don’t extend your travel medical plan after it terminates. If a travel plan expires, you simply extend it or purchase a second plan. All of this can be done online, no matter where you are located.

Often, a longer travel health plan (renewable up to two or three years) is purchased for those whose medical history prevents them from buying a long-term individual international major medical plan.

3. Internet Insurance Policies

The internet is awash in advertisements for medical insurance policies. Here’s what you need to know about them: Don’t buy one. At least not until you’re certain you understand what you’re buying.

Internet sites make impressive claims about the coverage they offer and the low-cost premiums. But buyer beware. It can be risky to purchase an insurance policy this way. Without a storefront or headquarters, it’s difficult to judge if the business is legitimate. Your only way to research its track record is through online reviews (and folks that leave reviews online aren’t always the most level-headed or informed). Internet medical insurance policies are usually the least expensive, but you may not know if the company is legitimate until it is too late. If you do go this route, please do plenty of research on any company you inquire with and get a second opinion on any quote given—it’s easier than ever in this digital age to do your own due diligence.

Worst case, you could end up sick or injured in a foreign country only to find, when you try to contact your insurance provider for coverage, that it doesn’t in fact exist. It’s easy for a business to take your money up front. That doesn’t guarantee it’ll be there to follow through when it counts. I know horror stories about health insurance bought over the internet, so please be careful when shopping online.

4. Local (In-Country) Medical Insurance Policies

Paid hospital insurance plans and travel insurance can make sense under certain circumstances, as I’ve explained. However, if you plan to live or retire overseas, either full- or part-time, and certainly if you plan to travel regularly, your two top options are an in-country medical insurance policy or an international medical insurance policy.

A local medical insurance policy may be ideal for you if you have no pre-existing conditions and are younger than 63. These insurance providers typically are connected with hospital networks and doctors throughout the country, meaning you are not limited to one health care facility. Typically, your coverage follows you anywhere you might travel in the country. It does not, however (and this is the critical thing to understand), follow you outside that country.

Again, if you’ll be traveling internationally on a regular basis or spending part of each year somewhere else, an in-country policy probably doesn’t make sense for you. However, if you plan to be based in one country most of the time, a local medical insurance policy can be less expensive (in some cases, much less expensive) than a comparable international medical insurance policy.

On the other hand, the coverage is usually more basic. And, as I’ve explained, the cut-off age for coverage can be a serious limitation. For instance, in Panama, most local insurance companies will not enter into a new policy agreement if you are over the age of 63. As well, local insurance companies have smaller client bases than big international insurance agencies, so they are much more affected by the claims you make. If they believe you are costing them too much money, they could terminate their contract with you. Local insurance companies may be ideal if you are moving to a country where medical care is inexpensive. If you need minor treatment, and it is affordable, you can choose to pay out of pocket rather than making a claim to your local insurance company, saving that for catastrophic coverage only.

When shopping in-country insurance providers, don’t be confused by their names. A number of countries, for example, have franchises of well-known U.S. insurance companies, such as Blue Cross and Blue Shield (which has branches in 170 countries). You must understand, however, that these international branches of Blue Cross and Blue Shield are franchises only. Foreign policies are not the same as the coverage you may know from the United States or Canada. The international franchises work with locally-owned insurance companies. Your Blue Cross and Blue Shield policy from the United States or Canada generally will not follow you if you move overseas.

5. International Medical Insurance Policies

Frankly, the safest, most secure, and most reliable option for international health insurance, certainly if your plan is to be living overseas for an extended or indefinite period of time, is an international health insurance policy with a big international insurance agency that has a long track record. In most cases, international insurance policies provide the most comprehensive and most appropriate level of medical coverage.

You do not have to rely on one hospital or even facilities in one country. International insurance companies have networks of doctors and hospitals around the globe where you can receive excellent treatment. An international medical policy should cover you nearly anywhere you choose to travel and for whatever period you choose to stay there. Note, however, that some international medical insurance policies do not cover you for travel within the United States. Health care costs are so high in the States that some international policies specifically omit it from their areas of coverage. If you plan to travel in the States, check with your insurance provider to see if you will be covered. If not, the option can be to purchase a more expensive policy.

International medical insurance premiums are based on your age and the amount and type of coverage you want. Most policies are guaranteed for life once you have been accepted for coverage. That is to say, the insurer cannot discontinue your policy as you get older or if you become ill. Furthermore, if you’re moving to a country where you do not speak the local language, international medical insurance providers will give you access to physicians who speak your native language or provide a translator. The larger international insurance companies have networks of providers around the globe so they can settle bills directly with hospitals and ensure that you are receiving the appropriate care. Other benefits of international insurance policies are that they often cover medical evacuation and repatriation.

International insurance may not be ideal for everyone, but you should take a good look at it before making any other choice. I recommend it as the top option for globetrotting expats.

Bupa, Cigna, and HTH Worldwide are the three top international insurance companies (for Americans; HTH Worldwide is not available to non-Americans). HTH offers annual plans for global living, short-term travel medical insurance, and trip cancellation coverage. HTH offers flexible plans designed so that individuals and families get the coverage they need, with the freedom to choose qualified doctors, hospitals, and health services anywhere in the world—they’ve even got an app to help you locate what you need no matter where in the world you are. HTH insurance programs comply fully with state insurance regulations and afford you full consumer protection.

All things considered, Bupa can be the best option in the majority of situations. If you are living or working abroad, Bupa’s international health plans offer choice and flexibility with optional add-ons. Bupa also runs a 24-hour multilingual help line and online access to your policy and account. Bupa is often not the cheapest option, but I feel it’s typically the best one. And a policy with a high deductible can be very affordable.

Step #6, Day 14 Assignment:

Begin considering your health insurance options, international versus local versus going naked, depending on the countries that have made their way to the top of your favorites list.

This will help: Your Best Local Health Insurance Options In The World’s Top 18 Overseas Havens.

If you’re thinking of asking for quotes, click here to inquire with Bupa, and here for Cigna.

Kathleen Peddicord
Your New Life Overseas Coach