To Buy or Not To Buy Travel Health Insurance

The days are getting shorter. In fact, just this past week, we got snow! All this reminds me that it's getting that time of year when us North Americans think about travelling south for a winter vacation.

A number of years ago, I got a chance to speak at the University of Perth in Perth, Australia. The university made all my travel arrangements. One of the things they ensured that I had was travel health insurance.

I'd never purchased such travel insurance before. I was a pretty cocky 34 year old at the time, and I'd never been unhealthy. I'd travelled all sorts of places without incident.

Wouldn't you know it? I got there, and developed a nasty ear infection, from a cold that I'd had before I left Canada. (Having spent 21 hours on planes on my way to Sydney had driven the cold virus from my throat into my ears. It was miserable! By the time I got to Sydney, my ears were blocked and I couldn't believe how painful it was -- because I had a hard time gettting my ears to re-pressurize as the plane came in for a landing.)

In Australia, you pay your doctor. The medical system is somewhat similar to the US. So, I saw a local doctor and paid for my visit. I had called my travel agent and been told that I had to pay the doctor first and then send in my bill for reimbursement later.

When I got back to Canada, I sent in my bill. About two weeks later, I got it back with an explanation that I would have to submit the bill to my regular insurance company (in this case, the Ontario Health Insurance Plan or OHIP) first! Annoyed, I sent the bill to OHIP. OHIP didn't cover the full cost of my doctor's visit and didn't even bother to pay attention to the fact that I'd paid in Australian dollars instead of Canadian dollars. At this point, I could send the remainder for reimbursement from the travel insurer, but I found out there was a deductible, and the rest of my bill was less than the deductible.

Turned out, the travel health insurance was just about useless in this case.

It's critical that you read what kind of coverage you are going to get. Even more critical, if you are going to a country where you have to pay the doctor immediately, you should have travel health insurance that will pay all bills directly. Having to pay first and then get reimbursement could turn out to be the same kind of run-around that I experienced. After all, if you are just going to have to send the bill to your own health insurer first, unless that coverage is terribly lacking, why bother? At best, you may get a deductible covered, but is that worth the cost and hassle?

In my case, no.

However, this isn't the last word on travel health insurance. If you are a Canadian or American who spends many months out of country in the winter, you absolutely have to have travel health insurance. You also have to have the kind of insurance that will pay for you -- having to come up with the money first and then have the insurer reimburse you could be financially disastrous if you become seriously ill.

Monique L. Attinger
Posted by Wealthy Geek on October 18,2006 at 11:21 AM
Great cautionary tale. I've gotten travel insurance a couple times but always wondered whether it was worth it. Does anyone out there have tips to finding alternatives to travel insurance? The only one off the top of my head is "tack on a budget for small medical costs as part of your overall budget for the trip"--though not very realistic in this age of exorbitant airfare costs.
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