Overseas health/accident insurance — what seniors need to know

S.L. PEEK, Jr., of Starke, FL, wrote to ITN, “In the August ’97 is­sue, page 4, was a question con­cerning whether Medicare benefits would be paid overseas.

“The 1996 Medicare Handbook states, ‘Medicare in general will not pay for health care obtained outside the U.S. and its territories. There are some very limited excep­tions for care obtained in Canada or Mexico.’

“Knowing this, I contacted Cigna, my complementary health care car­rier. They advised me to pay for necessary care and get complete documentation. Upon my return home I should submit a claim to Medicare, which they will refuse since the care was not given in this country. Then I should send copies
of all documentation, together with Medicare’s refusal to pay, to Cigna and they would consider the charge.

“In October ’96 we were walking from the bus to the Maritime Mu­seum in Oslo, Norway, when my wife stumbled on a cobblestone sidewalk and fell, hitting her nose on the pavement. It was bleeding profusely.

“Walking behind us was a young doctor and he got there quickly enough to help her up. He got a first-aid kit from the museum and bandaged her nose tightly enough to stop the bleeding.

“He said that her nose was se­verely cut, that she should be x- rayed to see if anything were broken and that the cut should be stitched.

“We went back to our hotel, the Radisson SAS Plaza, and the

concierge suggested a very good walk-in clinic just two blocks away. They took her in immediately, x- rayed her nose, stitched the cut and had us on our way in about 30 minutes. Their charges totaled about US$120, which I paid with a Visa card.

“Five days later, as they re­quested, we went to a similar clinic in Bodo, Norway. They said the wound was healing nicely and then removed the stitches. The charge was about US$5, which I paid in cash.

“All of the personnel with whom we came in contact in both clinics spoke perfect English, were most capable and appeared to a layman to have excellent equipment.

“When we returned home I filed a claim with Medicare, which they rejected. I then filed with Cigna and soon received their check for 80% of the $125.

“While we are on the subject of health care, I might mention that my doctor gives me a copy of each of my EKGs, which I carry with me. I had four bypasses in 1990 and he said that having a copy of my normal EKG would help a doc­tor to make a diagnosis in case 1 had any problems.

“We have now made 34 trips to Europe, all but the first few com­pletely on our own.”

Medigap vs. Medicare

Mr. Peek’s Medicare supplemen­tal insurance (or Medigap) policy reimbursed some of Mrs. Peek’s overseas medical care costs as de­scribed in his letter. Medicare does not pay for overseas medi­cal claims.

There are federal guidelines for Medicare (and Medicare Supple­mental or “Medigap” coverages) that spell out specific unvarying benefits.

Here’s a quote from “Your Medi­care Handbook” (for a copy, call Medicare at 800/772-1213), under the heading “Care Outside the United States”:

“Except in cases in Canada and Mexico described below, Medicare does not pay for hospital or medical services outside the United States. (Puerto Rico, the U.S. Vir­gin Islands, Guam, American Sa-j moa and the Northern Mariana Islands are considered part of the United States.)

“In rare cases, Medicare can pay for inpatient hospital services that you get in Canada or Mexico. Mediicare can pay only if. ..

“1) You are in the United States when a medical emergency occurs and the Canadian or Mexican hos­pital is closer than the nearest U.S hospital that can treat the emergency.

“2) You are traveling through Canada without reasonable delay by the most direct route between Alaska and another state when a medical emergency occurs and the Canadian hospital is closer than the nearest U.S. hospital that can treat the emergency.

“3) You live in the United States and the Canadian or Mexican hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, re­gardless of whether an emergency exists.

“Medicare also pays for doctor and ambulance services furnished in Canada or Mexico in connection with a covered inpatient stay.”

Medicare administrative structure

The work of administering, pro­cessing and paying claims and pay­ments for Medicare Part A (hospitalization) and Medicare part B (doctors/medical) is actually con­tracted out to private insurance companies.

These “intermediaries” (for Medi­care part A) and “Medicare carri­ers” (for Medicare part B) are different major insurance compa­nies, such as Blue Cross, in the various regions of the U.S.

I spoke with a representative of two different such companies and was assured that the above “no overseas Medicare coverage” paragraphs are strictly adhered to by all companies concerned.

Thanks to ITN subscribers LORI MOORE of Santa Rosa, CA, and Dr.. BERNARD ZAZULA of Kew Gardens, NY, for their letters on this topic.

What do “Medigap” policies provide for overseas coverage? 

Many private insurance compa­nies sell supplemental, or “Medi­gap,” policies.

There are 10 standard benefit plans from which to choose, and the Federal Government requires that policies provide identical ben­efits regardless of which insurance company is involved.

These standardized plans are designated by the letters “A” through “J,” as they provide in­creasingly greater benefits — at increasingly higher costs.

Medigap plans “C” through “J” provide overseas medical emer­gency benefits, subject to certain conditions. It must be for emer­gency care and is limited to care normally provided by Medicare in the U.S., and there is a lifetime maximum coverage of $50,000.

Emergency overseas evacuation would have to be preapproved and determined to be “medically neces­sary” before costs would be reim­bursed.

(The Wirtanens subscribe to plan “F,” which provides 80% coverage of overseas emergency care after a $250 deductible. We would have to pay any costs as they occur and present the bills for reimburse­ment.)

HMOs

As an alternative to Medicare and Medigap insurance, many seniors are converting to HMOs, or Health Maintenance Organiza­tions, the granddaddy of which is the one founded during WWII by Henry Kaiser for his shipyard em­ployees and subsequently made available to the general public.

HMO benefits for seniors who convert their Medicare to these plans are also regulated by the Federal Government.

A spokesman for Kaiser said that in most cases reimbursement of overseas medical costs would re­quire presentation of receipts and medical/hospital records. They’ll have to be translated into English.

(Incidentally, you’ll most likely find that overseas medical costs are a small fraction of those for equiva­lent treatment in the U.S.)

Keep a good available-funds bal­ance in your credit cards. Most credit cards have a worldwide-use­ful “800” number and will increase your credit limit in case of emer­gency.

(In some countries, car rental companies will put a “hold” on credit card funds in the amount of the value of the car. Some foreign countries consider charging above your limit to be a serious criminal offense. Your travel diary doesn’t need a section entitled, “30 Days On Bread and Water.”)

The Kaiser spokesman also said that overseas medical evacua­tions are rare and are evaluated on a case-by-case basis. Their first priority in an emergency would be to get their member to the nearest appropriate medical facility for treatment and stabilization.

If it was determined to be medi­cally necessary, then Kaiser would provide air evacuation back to the U.S.

The spokesman reminded me that overseas medical evacuation does not necessarily mean evacuation all the way home. If appropriate treatment is available closer to the scene of the problem, then emergency evacuation may well be provided only to that nearer medical facility.

Kaiser, like many other health care providers, has a small brochure outlining what to do if you have an overseas medical emergency.

Overseas health care for the under-age-65 set

Blue Shield/Blue Cross has a long list of associated hospitals and medical facilities around the world that will accept under-age-65 policy holders for treatment, under the same “prepaid” payment condi­tions as any Stateside hospital.

Call your “Blue” health care pro­vider for a copy of the overseas list.

Most health insurance providers, HMO or otherwise, have a bro­chure or other printed instruction on what to do in case of an overseas medical emergency. Get a copy now, or well before your next trip, and keep it with your passport so that you’ll have it if you should need it.

“Blue” HMOs for over-65 seniors

Many Blue Shield/Blue Cross or­ganizations have plans that pro­vide for Medicare recipients to convert to a “Blue” HMO.

These “Blue” HMOs allow senior members to receive “prepaid" health care from a very large list of “Blue”-affiliated medical facili­ties around the U.S.

At present, however, these senior “Blue” HMO members cannot uti­lize the “Blue” affiliated medical facilities overseas with the same “prepayment” ease as those under age-65 Blue Cross/Blue Shield health policy holders. Stay tuned for any changes in this policy.

Medical evacuation insurance

Emergency medical evacuation is one of the overseas medical ex­penses that can quickly run up into serious money ($10,000 and way, way up).

This evacuation may be required because even the simplest, decent medical care of the kind we are used to may not be available.

In Moscow, for example (the capi­tal city of a major “developed” world power), if you have more than a simple medical problem, you very likely will be automatically transferred by air evacuation to a hospital in Helsinki, Finland. And we’re talking serious money for a flight in a specially modified, small plane.

If one has to be transported on a stretcher, a common alternative is to use a minimum of four first- class seats on a scheduled airline flight. (This also costs serious money — there are no advance-purchase discounts for this level of immediate service.)

The statistical likelihood of re­quiring expensive emergency medi­cal evacuation is extremely low, which allows most standard over­seas travel health policies to in­clude this coverage in their policies.

(Up until a few years ago, over­seas emergency medical evacuation coverage was supplied at no extra cost to holders of one of the major “Gold” credit cards.) 

Check to see what evacuation cost limits are in place in a travel insurance policy that you are con­sidering. An evacuation from a re­mote location, accompanied by medical personnel, can cost as much as $75,000!

If the travel insurance policy you bought had a $25,000 limit, you might end up owing the balance.

The extremely low frequency of need allows emergency medical evacuation coverage (and other modest overseas health-related ser­vices) to be supplied at a very rea­sonable cost by TRAVELER’S EMERGENCY NETWORK.

For details, contact them at 800/ ASK-4-TEN. A year’s protection costs $30 to $50 for the whole fam­ily. Their evacuation cost limit is $100,000.

In California, emergency medical evacuation within the U.S. or over­seas is provided by the Auto Club in their economical “AAA Plus,” “extra coverage” package. For de­tails and availability of this benefit in your area, check with your local AAA office.

Some other emergency medical evacuation coverages have been re­ported to be available at modest, of no extra, cost through membership in travel organizations such as the “Good Sam” RV group.

What’s new in standard travel insurance packages

Since 1995, some (but not all) standard travel insurance compa­nies began offering their customers the option of a major improvement in regard to the onerous “preexist­ing medical condition” clause which has caused so much policy-holder misunderstanding and distress due to denial of claims.

These companies’ policies will now waive the preexisting condi­tion clause if you purchase a policy within seven days of making the first deposit on a trip.

A typical problem with a preexisting condition clause

ITN reader WALTER WALLIS of Rancho Mirage, CA, lost $1,100 due to cancellation of a trip for medical reasons. 

His travel insurance policy from CSA Travel Protection had a pre­existing medical condition clause.

A family member saw a doctor for a complaint one day before the effective date of the policy. The complaint was subsequently diag­nosed as a serious problem that caused the Wallis trip to be can­celed.

If this first visit had been even 60 days before the effective date of the policy, the claim would still have been denied.

If this first visit had been after the effective date of the policy, the claim would have been paid.

If the clause had been waived at the time of purchase of the policy, this same claim would have been paid promptly and without the requirement of presenting medical records and doctor’s state­ments.

Mr. Wallis’ challenge to the in­surance company’s claim refusal — with letters and medical records from the doctor and hospital, con­sultation and a letter written by an attorney, a letter to the California 

Department of Insurance and, of course, a series of letters and re­sponses to and from the insurance company — was futile.

Waiver conditions

CSA TRAVEL PROTECTION (phone 800/348-9505) has offered a waiver of the preexisting condi­tion clause in their travel insur­ance policies since 1995, but specific requirements must be met.

Their conditions for this waiver are similar to those required by most travel insurance policies that offer this valuable option.

The policy must be purchased within seven days of the first trip deposit.

For trip cancellation protection, the entire cost of the trip must be insured. The maximum insurable amount is $10,000 per person or $40,000 per trip.

Red tape for claim payment requests

Without this preexisting condi­tion clause waiver (in any travel insurance company’s policy), you can expect to have to put up with a good bit of the headache of docu- ment/medical records presentation for any claim from an overseas medical problem or a trip cancella­tion due to a medical problem, even if the claim is valid and is ultimately paid.

According to most preexisting medical condition clauses, even a change in the amount or type of medication within a 60-day pe­riod prior to the effective date of a policy, for an otherwise “stable” medical condition, can be cause for a denial of a claim.

With a preexisting medical con­dition clause in your travel insur­ance policy, the burden of proof is up to you to demonstrate that within this 60-day period any pos­sible doctor/hospital visit was not related to the claim.

Getting that waiver

Many policies still do not waive the preexisting condition clause.

If you are considering plac­ing a deposit on a cruise or tour and are going to purchase some kind of travel insurance, WAIT until you can be assured of the opportunity to get a waiver of the preexisting con­dition clause on whatever in­surance package you might purchase.

A travel insurance package of­fered by a cruise line or tour com­pany may not offer to waive this clause.

If you find this to be the case, ask them, “Why not?” and find a policy that will waive the clause, making sure that you get records to prove that your insurance purchase/ policy effective date and tour de­posits comply with the time-limited period.

I strongly recommend that se­niors traveling overseas avoid travel insurance policies that will not waive this preexisting medical condition clause.

Companies that will waive the preexisting condition clause

The following travel insurance companies’ policies will waive the preexisting medical condition clause, if their individual require­ments are met: ACCESS AMER­ICA (phone 800/284-8300) and AMERICAN EXPRESS (phone 800/234-0375).

Trip cancellation coverage

A few travel insurance compa­nies will not only waive the preex­isting condition clause (“7-day rule" applies), they also don’t require purchase of trip cancellation cover­age for the full cost of the trip.

This is of interest because the likelihood of losing the whole amount of the cost of a canceled trip is small, unless the trip is can­celed very close to the last days be­fore leaving.

In the numerous travel-insur­ance-related letters that have crossed my desk, few have con­cerned the loss of the complete cost of a trip. Usually, there have been some refunds, or the whole amount of the trip had not yet been paid.

The following companies will waive the preexisting medical con­dition clause and will also allow purchase of trip-cancellation cover­age for whatever fraction of the cost of the trip that you choose; 

TRAVEL ASSURE (but not for cruises) (phone 800/228-9792), TRAVEL GUARD (800/782-5151), WORLD CARE TRAVEL ASSIS­TANCE (800/253-1877) and TRAV­EL INSURANCE PAK (800/243- 3174).

Be an informed travel insurance purchaser. Read and understand all the fine print in the brochure as well as the longer text in the actual policy; it’s usually in relatively un­derstandable language. (Or at least discuss these issues with your travel agent.) The policy that you purchase is a binding legal con­tract.

There’s no need to be paranoid about all this. Just add a reason­able amount of preparation for po­tentially disruptive and expensive overseas health problems to your trip planning and then enjoy the trip with greater peace of mind.

Happy trails.