Travel Health Insurance Providing Creditable Coverage: Why You Need It, and Where to Find It
Figuring out health insurance options in the United States isn’t simple. Throw two-year round-the-world travel plans into the mix and it starts looking even uglier.
When my husband and I started seriously considering the idea of traveling around the world to surf for two years, one of our most pressing concerns was how to protect our health during our trip as well as after we return back home to the U.S. My husband holds a full-time position that provides health insurance coverage for both of us. However, we won’t be eligible for COBRA since he isn’t being laid off, and his company has fewer than twenty employees at the moment. Those are both requirements for COBRA eligibility.
In addition to finding the best level of coverage and customer service, it’s important to ensure that the travel health insurance policy you choose offers what is known as “creditable coverage.” “Creditable coverage” signifies a comprehensive health insurance policy within the U.S. in which the health coverage is not secondary to any other kind of insurance (eg. Liability or accident insurance).
In the United States, if you have a gap of longer than 63 days between your last creditable policy and a new policy, the new insurance provider can refuse coverage for any pre-existing conditions for up to eighteen months. The definition of pre-existing condition, for health insurance exclusion purposes, is anything for which you sought treatment or consultation within the six months prior to applying for the new insurance. There’s a great explanation of creditable coverage in the article Health Insurance for American Travelers by Keith and Amy Sutter that was featured on Briefcase to Backpack in February 2010.
Many backpacker travel insurance companies, such as World Nomads, provide excellent levels of coverage and service, but don’t necessarily provide creditable coverage. Being slightly hypochondriac and extremely cautious, the thought of returning home and not being able to get adequate care makes me more than a little nervous. Needless to say, we spent a considerable amount of time looking for health policies that are considered creditable coverage.
What follows is a quick summary of our options that we pieced together through weeks of research. It’s by no means the definitive guide to travel health insurance. Your own situation will probably be different than ours, so make sure you look into all of your options as thoroughly as you can before deciding on your type of insurance and amount of coverage.
Option number one is to maintain a policy in the U.S. in addition to a travel policy. Although this is a viable option for the short-term traveler or the deep-pocketed, it’s hardly ideal for extended budget travel. We thought we might be able to purchase a travel policy along with a catastrophic plan to cover us cheaply in the States, but catastrophic health plans, while affordable alternatives to comprehensive plans, are generally not considered creditable.
Option two is to take our chances and purchase a travel plan that doesn’t cover us in the U.S., and is therefore also not considered creditable coverage. This is the riskiest option because if an emergency health situation occurs while we’re abroad that requires care back home, the costs incurred by receiving healthcare in the States can become unmanageable if not covered by an insurance policy.
Our third and most attractive option is one we came upon only after much searching: purchase a policy that provides long-term travel coverage abroad as well as in the U.S. Sounds like a no-brainer, right? The catch is that, if you don’t know they exist, it’s quite difficult to find information about these policies. The companies that offer these kinds of policies don’t advertise very well, and only after trolling many long-term travel forums and asking around did we find out about them. The ones we found were:
– HTH Worldwide’s policy called Global Citizen offers long-term coverage abroad and in the U.S. The plan is fairly comprehensive. Unfortunately, as residents of New York, we’re not eligible for this policy at the moment. Check that you live in one of the states listed in their “eligibility” section.
– International Medical Group (IMG) offers a policy called Global Medical Insurance designed for people living abroad or long-term travelers. You can choose to include the U.S. in your coverage, for a higher premium.
The costs that were quoted to us for the IMG policy seems reasonable: $2143 per year for both of us, with a policy that has a $5000 deductible; much more affordable than the estimate we calculated of $10,000 per year for Option 1 above.
We’re going to go with the IMG policy, since it’s the only one certified as creditable coverage for which we’re currently eligible. Hopefully, we won’t ever need to use it, but it will give us a lot of peace of mind to know that we’ve got our bases covered.