As global travel increasingly becomes a key aspect of retirement plans, many retirees are eager to explore new horizons. However, before setting off on international adventures, it is vital to review your medical coverage. A health emergency outside the United States can present unexpected challenges for Medicare beneficiaries.
Ken Dalecki, a retired editor from Washington, D.C., encountered such a challenge during a 2016 trip to Asuncion, Paraguay. At 74, Dalecki experienced a sudden and alarming issue with his vision. After noticing a growing dark spot in his right eye, he quickly realized that he might be dealing with a detached retina—a condition requiring urgent attention to prevent blindness. The stress and anxiety of dealing with a health emergency in a foreign country underscore the need for thorough preparation and planning.
Following guidance from the U.S. embassy, Dalecki sought medical help at a local hospital. His experience underscores an important tip: when traveling abroad, it is advisable to have contact information for local medical facilities readily available. Dalecki confirmed via Skype that his Medicare plan would not cover emergency care in Paraguay. Fortunately, his surgery was successful and relatively affordable, costing around $3,300—substantially less than he would have paid in the U.S. However, the potential financial burden of healthcare services outside the U.S. highlights the importance of financial protection.
This experience highlights a critical point: traditional Medicare generally does not cover healthcare services outside the U.S. and its territories. However, certain Medigap supplemental insurance plans—specifically Plans C, D, F, G, M, and N—provide emergency healthcare coverage abroad. While some plans, such as E, H, I, and J, are no longer sold, those holding these policies continue receiving foreign coverage. These Medigap plans typically cover 80% of medically necessary emergency care costs abroad after a deductible, with a lifetime limit of $50,000.
Traveling abroad—or even within the U.S.—can present additional coverage challenges for those enrolled in Medicare Advantage plans. These plans often have limited service networks, meaning care obtained outside your local area could incur higher out-of-pocket costs. This underscores the need for additional coverage beyond Medicare Advantage plans.
Consider Travel Insurance
Given the evolving landscape of travel and health insurance, purchasing travel insurance before your departure is prudent. While a stand-alone travel medical policy is an option, a comprehensive travel insurance plan with medical coverage may provide greater overall value. According to Carol Mueller, Vice President of Marketing at Berkshire Hathaway Travel Protection, “You might purchase the policy for its medical coverage but end up using it for other benefits.” For example, policies with trip cancellation coverage can protect you if you need to cancel your trip before departure, and trip interruption coverage can help cover costs if you must return home early.
Lynne Peters, Product Director at InsureMyTrip.com, notes that while comprehensive policies are more expensive, they offer broader protection. Typically, these policies cost between 6% and 8% of your travel costs. It is important to ensure that your insurance covers all prepaid expenses.
Premiums vary based on factors such as age and trip length, with older travelers potentially paying higher premiums—sometimes up to 10% to 11% of trip costs. Purchasing a policy within 10 to 14 days of making your first trip payment usually ensures coverage for preexisting conditions. Be sure to read the policy details carefully, including limits on medical coverage, and consider adding medical evacuation coverage, which can cover the cost of specialized transportation home or a traveling nurse.
Travel insurance is especially valuable for cruises, often requiring significant upfront payments. While traditional Medicare may cover medically necessary services on a ship within U.S. territorial waters, it will not cover services on a ship more than six hours away from a U.S. port.
In certain scenarios, medical evacuation coverage can be critical. Daniel Durazo, Director of Communications at Allianz Global Assistance, explains, “Cruises are notorious for disembarking ill passengers at the nearest port, which may not have adequate medical facilities.” An air ambulance to a proper medical facility or back home could cost upwards of $20,000 from nearby locations and significantly more from distant regions like Asia.
As you finalize your travel plans for 2024, ensuring comprehensive health coverage should be at the forefront of your preparations. Whether you’re navigating the complexities of Medicare or considering additional insurance options, taking the necessary steps to protect your health abroad is essential for a worry-free journey. If you have questions about how your travel plans might impact your financial or healthcare coverage, or if you’re seeking personalized advice, the team at Legacy Private Trust Company is here to assist you. We invite you to contact us to explore how we can support your needs and help you travel with confidence.
If you are a Legacy client and have questions, please do not hesitate to contact your Legacy advisor. If you are not a Legacy client and are interested in learning more about our approach to personalized wealth management, please contact us at 920.967.5020 or connect@lptrust.com.
This newsletter is provided for informational purposes only.
It is not intended as legal, accounting, or financial planning advice
