Health Insurance Coverage for Americans Planning to Travel for an Extended Period

There are hundreds if not thousands of websites and travel blogs out there that fully explore the topic of travel insurance. As I have planned my trip I’ve referenced many to find reviews of providers, fine print to pay attention to, and conditions or riders to look for. As an American there is actually more to it than residents of many other countries.

In the US, we have privatized insurance and for better or worse, this means that insurance companies set the rules of the game and that not everyone has healthcare or can even qualify for healthcare.

How I Learned About the American Healthcare System

As someone blessed to have always worked in corporate businesses, I never knew much about our insurance system, nor did I need to. If you’re a member of the cubicle nation in Corporate America, for the most part, you are guaranteed to find insurance as a part of the package.

Last year I unfortunately got a firsthand view of how the other half lives. I was starting a new job at a new company and as usual I knew that my health insurance would be provided. The company did delay coverage for a 30 day period for all employees and I didn’t stress about negotiating coverage for day 1. I mean with everything else you haggle over in the offer phase, this just fell to the bottom of my list. Instead I just sent a check in to cover COBRA insurance for the time I would be without and didn’t think too much on the topic. Unfortunately, this became one of the factors that caused me to be a member of the uninsured Americans club.

I got off to a running start in my new role and things were going quite well. It hadn’t occurred to me that I wouldn’t be notified of when and where to enroll for health insurance. Every other company I’ve worked for has provided clear information on the topic, complete with reminders. After the 30 day period ended and I still hadn’t received the typical email or snail mail package, I reached out to HR. You can imagine my dismay when they told me that they had snail mailed the information and that I should have registered prior to my start date – now leaving me ineligible to enroll until the new year. The prospect of 6 months without health insurance didn’t really excite me even though I don’t have any major health conditions.

As a new employee, who was getting great press and making big strides in my role, I didn’t feel like I could rock the boat too much on the topic. I did file an appeal which went to corporate headquarters and after weeks only produced a form letter decline. (yes, I was with one of those very large companies that created the word bureaucracy) I did finally decide to escalate within HR but with no success. Finally, I succumbed to the fact that instead of making a scene (filing an ERISA complaint) and potentially damaging my newly built reputation, that I would forgo challenging the denial further and just buy my own insurance. How bad can it be, right?

Getting Health Insurance Coverage Outside of Corporate America – Preexisting Conditions

I started first with COBRA, thinking I could just continue coverage. Since I had not taken steps sooner to gain coverage while my new company was evaluating my appeals (my bad – I just really didn’t think a company that recruited me so hard would really renege on insurance coverage of all things) I ended up out of the period that you can enroll or continue COBRA (60 day lapse).

Well okay, a setback, but there’s still the option of going directly to the insurance companies. Self-employed people do it every day. I started with my previous insurance company that covered me at my prior company. This was my first introduction to the restrictions and limitations of the US Healthcare System. Mind you, I have no major issues, but do take some prescriptions for maintenance of minor stuff. Well, since I had let COBRA lapse and it had been more than 63 days, I was no longer eligible to be covered for anything deemed as a preexisting condition.

Insurance companies basically consider everything a preexisting condition. If you mentioned it to a doctor in the last 2-3 years, it’s not covered. Just a side conversation? If the doctor took a note on it then it’s a preexisting condition. If the insurance company finds out about it or you’re honest and disclose it, they will tell you that any doctor visit or medication for that particular condition is not covered. Oh, and private insurance also doesn’t cover any type of pregnancy procedures from normal OBGYN to delivery and complications (at least in my state – Texas). That wasn’t an issue for me right now but I can’t understand how that’s not considered discriminatory.

So I took the new information in stride….after probably more than one glass of wine. All I could do was fill out the application and wait to see what the price tag would be. As it turned out, the insurance company that I had just left didn’t want me back. They declined me outright. I was in shock. I can’t be one of those customers that’s hurting their bottom line. I mean a few prescriptions and a doctor visit a few times a year is really the type of customer you won’t accept money from? They weren’t the only company either. I was declined by two more before I was able to find coverage.

Without Prescription Drug Coverage

Finally I got my policy in effect and was at least happy the stress of it all was over….until I hit the pickup line at my local pharmacy. I learned firsthand why so many people say they can’t afford their medication. My first trip to the pharmacy had a price tag of $1,200 and again, not taking anything weird. At least one script most women readers out there take too. I had a new job with a newly inflated salary but still….$1,200??? Like many out there I decided that a couple of my maintenance issues could be put on hold and I swallowed the rest of the bill.

Looking back, what I learned over these 6 months makes me feel bad for my prior ignorance on the system and the thousands of people that get crippled by medical and prescription drug bills. I guess on some level I knew it wasn’t good but experiencing it put everything in a whole new light.

Healthcare and Medical Insurance for Americans Traveling RTW

So what does all of this have to do with traveling around the world? Well, if you’re reading this and you’re an American, it means you’re health insurance research is more complicated than just finding a good travel insurance plan like more than a few sites out there outline. It means that you also have to worry about your travel time creating a gap in your insurance coverage history. Any gap greater than 63 days is going to automatically put you in the population who are now subject to preexisting condition riders in your future insurance policies. You see, travel insurance policies typically don’t cover you while you’re in the US (World Nomads actually will as long as you don’t go back to your home city) so if you have plans to go back during your trip, you’ll be uninsured during your time home. In addition, if a serious issue arises and you need to be evacuated, your travel insurance policy is likely to send you back to the US….which you’ll then find means you’re not insured and that could get very expensive, not to mention that it will add to your list of preexisting conditions.

Also, at the end of your trip when you are ready to settle back in at home, you’ll find that most travel insurance policies (if not all) don’t qualify under the 63 day ‘creditable coverage’ rule. In other words, US insurance companies don’t typically recognize travel or international insurance as creditable coverage and will count the entire period under that insurance as a gap in coverage. Again, that means you will be subject to the preexisting condition riders when you return and may even have trouble finding healthcare. I can tell you that you will certainly have to pay up for it.

A couple of exceptions do exist. There are a couple of states that have instituted regulation that restrict insurance companies from denying coverage for preexisting conditions. Also, when the Obama Care legislation goes fully into effect in 2014, there will be similar restrictions on insurance companies regarding preexisting conditions in all states. That is, if it is not overturned by the Supreme Court on the mandatory healthcare clause – ruling is forthcoming. While these regulations won’t let insurance companies deny you coverage, that doesn’t mean it’s going to be cheap. I would certainly expect pricing adjustments based on different conditions. Insurance companies can’t afford to cover expensive conditions and charge the same amount.

What are the Health Insurance Options?

Once I nail down what I’m going to do, I will share my recommendations but for now there seem to only be a few options.

Continue COBRA coverage for the full year I’m away and purchase a travel insurance plan – very expensive!
Get a travel insurance policy and be comfortable being not being insured while in the US and dealing with increased expenses when I return (if I don’t go back to corporate America – preexisting conditions aren’t an issue if you’re covered under an employer sponsored plan)
Try to find a travel insurance plan that would be accepted as a creditable coverage policy by US insurance companies
Or I guess I could skip travel insurance and health insurance, but let’s face it, I may be crazy enough to quit my job to travel, but I’m not crazy enough to do it with no health insurance coverage!

Any Americans out there have other advice or information to share? I’d love to hear your comments or advice.