Sunday, December 14, 2014

Expat Travel Insurance (Part 1)

At times, US policy seems designed to make life difficult for expats. Look no-farther than the catch 22 of insurance for trips back to the good ol’ US of A, where the protections of European-style socialized medicine do not apply.

At first glance, there are three alternatives:

  • US health insurance
  • Expat health insurance
  • Travel insurance

Each with their own unique pros/cons…

Type Eligibility US treatment Price
US Min 6mo US residence + $$
Expat Min 6mo foreign residence + $$$
Travel Min 6mo residence - $

US Health Insurance

Long-time foreign resident are wholly ineligible for US-based health insurance due to residency requirements.

For those returning stateside, good luck finding an affordable short-term PPACA compliant policy to cover the 6 month gap before eligibility in US plans.

On the upside, bless the wonks, there is an Obama-care exemption for those US citizens which pass either the bona fide resident or physical presence test under USC 26 §5000A(f)(4). Not that most non-executives could afford the premiums demanded by reasonable individual plan.

Expat health insurance

These plans generally cover treatment in either your country of citizenship or country of residence. In a perfect world, this would be the plan-type of choice for expats. Country of citizenship treatment for serious accident/illness; country of residence for more minor issues.

Unfortunately, expat health plans are often even more expensive than equivalent US-based health insurance plans. If you’re a non-exec, it’s doubtful that your company will offer this perk, so good luck affording a policy.

Travel insurance

These come in two flavors, US-based plans and foreign-based plans. Generally, there is a 6 month residence requirement, which will determine whether whether you are eligible for the US-based (min 6mo US residence) or foreign-based (min 6mo foreign residence) plans.

The biggest down-side of travel insurance is that they only cover emergency treatment, i.e. to minimize their cost, they will repatriate you ASAP to your country of residence (usually where the plan is acquired).

For relatively minor injuries (e.g. a broken leg) this level of coverage should be sufficient. However, in the event of a serious accident/illness, this money-saving tactic could kill you. For example, say you were involved in a serious car accident while visiting family in your country of citizenship. Travel insurance would cover your stabilization and medical repatriation to your country of residence (expat home). You’d then be left to the state system (e.g. NHS) with limited social/family support during recovery. Moreover, if you’re unable to work, or otherwise violate your visa conditions due to your illness/accident, you very well may face deported back to your country of citizenship, where you’d be uninsured, and more or less left to die without adequate treatment.

Seriously, it’s that dire. In a place like the US, the best an uninsured former expat could hope for is medical bankruptcy (certainty) and surviving without treatment long enough to become eligible for Medicaid (highly uncertain).

Additionally, some plans have additional restrictions on travel to the ‘home country.’ For example, if you’re an Indian national, resident in the US, your US-based plan may not cover you in India. As of yet, I’ve found no way to screen for these exceptions, other than to (attempt) to read through the 20-100 page terms and conditions for each policy.


None of the above is professional advice…far from it. If you’re in the same unfortunate boat, thrust into the complex tax and compliance situation that US policy imposes on its expat community, but can’t afford appropriate advice, good luck!

“There is no hint that help will come from elsewhere to save you.”
- R.I.P. Sagan.

PS. Given my income constraints, I’ve decided to opt for travel insurance, i.e. adequate cover for a minor illness/accident; wholly screwed in the event of a major problem.

Written with StackEdit.

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