Going Abroad? Check Your Health Coverage

With the world as their oyster, many retirees take the opportunity to travel far and wide. But before you go, review your medical coverage. Medicare beneficiaries who have a health emergency outside the U.S. could be in for a big surprise.

Retired Kiplinger editor Ken Dalecki, 74, who lives in the Washington, D.C., area, didn’t have emergency surgery penciled in on his itinerary on a 2016 trip to Asuncion, Paraguay. But soon after arriving, Dalecki noticed a black area in his right eye. And it was growing.

Online research indicated his retina might be detaching, and that it had to be dealt with right away. “Otherwise, you could go blind,” he says.

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Dalecki called the U.S. embassy and got contact information for a local hospital. “It’s something anyone ought to do,” he says. His hotel helped set up the first appointment. Via Skype, Dalecki confirmed that Medicare wouldn’t cover emergency care in Paraguay.

Dalecki was lucky. “Everything worked out fine,” he says. The outcome of the surgery was successful, and the cost was relatively cheap—about $3,300. The cost would have been higher in the States, but Dalecki says Medicare would have lowered his out-of-pocket costs.

As Dalecki confirmed, traditional Medicare typically doesn’t cover health care outside the U.S. and its territories. But Medigap supplemental insurance plans C, D, F, G, M and N do cover foreign emergency health care. Plans E, H, I and J are no longer sold, but people who still own those policies have foreign coverage, too. These Medigap plans pay 80% of the costs for medically necessary foreign emergency care (post-deductible); the lifetime limit for foreign care is $50,000.

Medicare Advantage beneficiaries may run into coverage issues while traveling abroad—and even stateside. Advantage plans generally have limited service networks, and traveling outside your local area can throw you out of network, making needed care costlier.

Shop for Travel Insurance

To ensure you have health coverage, consider buying travel insurance before you take off. You can buy a stand-alone travel medical policy, but comprehensive travel insurance that includes medical coverage may give you more bang for your buck.

“You may buy the policy for medical coverage, but may use it for something else,” says Carol Mueller, vice president of marketing for Berkshire Hathaway Travel Protection. A policy with trip cancellation protects you if you must cancel before departure, while a policy with trip interruption helps cover costs if you have to return home early.

“Comprehensive policies are more expensive, but you are better protected,” says Lynne Peters, product director for InsureMyTrip.com. Typically, comprehensive policies cost 6% to 8% of travel costs; buy enough insurance to cover all your prepaid costs.

The premium is also dependent on your age and length of your trip. Older travellers pay more, says Mueller, up to 10% to 11% of trip costs.

Typically, if you buy a policy within 10 to 14 days of your first trip payment, preexisting conditions will be covered. Read the fine print, including medical coverage limits. Look for medical evacuation coverage, which will cover a special flight home or a traveling nurse to accompany you on a commercial flight home.

Travel insurance can make sense for cruises, which require big upfront payments. Traditional Medicare may cover medically necessary services on board a ship within the territorial waters adjoining the land areas of the U.S., but it won’t pay for services on a ship that is more than six hours away from a U.S. port.

Medical evacuation coverage could come in handy. “Cruises are notorious for putting ill passengers off at the nearest port,” says Daniel Durazo, director of communications for Allianz Global Assistance, and “that port may not have good facilities.” An air ambulance to an appropriate facility or back home could cost $20,000 or more if the destination is close, he says, and 10 times that if coming from as far as Asia.