While the summer vacation season may be winding down, thousands of people travel overseas each day for business, school or pleasure. However, few consider that their medical insurance coverage might be less than expected or, even worse, nonexistent.
As part of trip preparation, travelers should review the local coverage rules for nonresidents. Some countries may offer ‘free’ coverage to tourists in emergencies, but might also require the bill to be paid before permission is granted to leave the country. As part of making your travel plans, consult a financial advisor or insurance agent to confirm overseas coverage. The Virginia Society of Certified Public Accountants (VSCPA) offers to the following advice on medical coverage preparation while traveling overseas.
Important questions to ask
- Does the policy cover my health care in my destinations?
- Does the policy cover hospitalization in a foreign country?
- Does the policy cover medical evacuation?
If the answer is “no” to any of the above, consider supplemental health insurance. Also, certain high-risk activities might not be covered. Ask if there are exclusions.
Many people dream of traveling overseas as part of retirement. Be aware that Medicare Part A and B generally do not provide coverage outside of the United States (with a few limited exceptions). Some Medicare Advantage Plans might provide health coverage for travel outside the U.S. Supplemental insurance can fill coverage gaps.
Students studying abroad
Most colleges have their own insurance plans or may allow coverage under a parents’ plan in lieu of the college plan with proper proof of coverage. Check how a student is covered and the extent of the coverage before he or she leaves.
Several private organizations will provide medical evacuation services for overseas travelers. Short-term travel protection can run from $100 to $500 depending on length of stay and individuals versus family coverage. The price of a Travel Guard AIG policy, for example, typically runs 6 to 7 percent of a trip's cost, depending on age. At Medex, policies start at less than $2 a day.
There are websites that allow you to compare policies (e.g., insuremytrip.com). These short-term policies are a form of group health and typically health questionnaires, forms and tests are not required.
Some plans offer concierge services that include vaccinations, immunizations and medical evacuation (e.g., medjetassist.com). Some also include trip interruption, trip cancellation and other nonmedical amenities, including restaurant reservations, tickets, lost luggage reclamation services and travel emergency assistance.
Travelers should always bring a copy of their insurance card and important medical documents with them.
The amount by which allowable medical and dental expenses exceed 10 percent of Adjusted Gross Income (AGI) is deductible. Through Dec. 31, 2016, the threshold is only 7.5 percent for taxpayers age 65 or older.
The U.S. Internal Revenue Service (IRS) does not preclude deducting medical and dental expenses incurred overseas. For the most part, the usual inclusions and
exclusions stipulated by the IRS apply. Drugs purchased and consumed in another country are deductible if the drug is legal in both the U.S. and the country you are visiting. Nonprescription drugs are specifically excluded from deductibility by the IRS.
Insurance premiums can be included in deductible medical and dental expenses. However, if a policy provides for payments for other than medical, only the portion of the premium that relates to medical coverage can be deducted. Ask your insurance carrier for a copy of a statement that shows the separation of the medical from other insurance coverage.