Why Does International Medical Insurance Cost Less Than Domestic Health Insurance?

Healthcare CostsIf an individual is preparing for a trip abroad and understands the need for a specific type of medical insurance policy that will cover him during his trip, he will often hold his breath and ready himself for the impact of a giant premium as he, understandably, assumes that the international insurance premiums will be similar to premiums for domestic health care.

 

Of course, the impact is never actually felt because international insurance policies are much less expensive than policies in the U.S.

 

Medical Tourism – A Hint That International Insurance Is Cheaper

 

In an August 2012 article in Florida Today, a plastic surgeon in Columbia is quoted as saying that 30 percent of his clients are from the United States. The article goes on to discuss findings from the organization Patients Beyond Borders, which states that U.S. residents receiving medical treatment abroad can save up to 80 percent over domestic medical treatment prices depending on the location to which they travel.

 

These facts and figures are likely not surprising to industry professionals. Patients Beyond Borders noted on its Medical Tourism Statistics & Facts page that international accreditation for medical treatment affiliates abroad is growing roughly 20 percent per year.

 

If Medical Care is Cheaper Abroad, Why Do I Need International Insurance?

 

After discussing the reduced cost of medical care abroad, some might be wondering why a special medical insurance policy is even necessary when you travel abroad. After all, if you can save up to 80 percent over U.S. healthcare costs, why worry?
First of all, it’s important to consider the region that you are visiting. While Malaysia’s healthcare costs may be up to 80 percent less than those in the U.S., in Brazil you may save only 40 percent. In other regions, such as the U.K., your net savings could be even less.

 

Even with the savings, the costs of treatment could be much more than you can afford to pay out of pocket. Let’s say you are traveling to Malaysia and you have an accident that requires remote emergency evacuation and hospital care. In the U.S., let’s say these services would cost $100,000 or more. If you save the full 80 percent, you’re still looking at a bill of at least $20,000. This is significantly less than it would be in the U.S., but it’s not exactly affordable.

 

The Difference Between Medical Tourism and Emergency Care

 

Medical tourism is ideal for individuals who have a pre-existing condition that they need treatment for. International insurance provides a different set of coverages altogether. Its goal is to mitigate the expenses of treating an unexpected accident or illness while you travel abroad. In addition, it can be designed to provide coverage for specialized costs such as repatriation of bodily remains and trip cancellation.

 

The crux of purchasing insurance for your trip abroad is to control your potential costs for an unexpected accident or illness. By paying a predetermined, predictable premium you can manage the amount of your emergency treatment bills. In order to save more money on your premiums, you may choose a deductible for your policy, but you still get the comfort of knowing that beyond your premium and that deductible you likely won’t have any bills unless your treatments are so severe that they exceed the limits of your policy. Then, beyond these savings, you secure additional protections for events that can negatively impact your trip but are not necessarily related to medical treatment.

 

One More Question

 

One final question all of this might bring up is whether someone who is traveling abroad specifically for medical tourism purposes also needs a special insurance policy. The answer to that is yes. While the medical insurance issued for the trip abroad would not help with any pre-existing conditions, it will help keep the trip within a certain budget if you have an unintended accident that is unrelated to your pre-existing condition and needs separate treatment.

 

No one wants to come home from a trip abroad with an unexpected bill, even if that bill marks a significant discount over what it would have been if accrued in the U.S. Whether the cost of your emergency illness or accident treatment abroad is $5,000 or $50,000, ideally coming home without the bill is better.

 

NYIG is focused on providing international insurance solutions. Contact us today and let us help you find the best solution for your individual or group needs.

 

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