Global health insurance
Mention health insurance to anyone in the US and eyes glaze over and fire shoots from their nostrils. Research consistently shows that health care and its evil twin, health insurance, is one of the top concerns for US citizens. It’s also one of the largest expenses in a typical family’s budget. A mini-retirement can bring those worries to the surface, as employer provided health insurance may no longer be an option and sticker shock sets in.
Unless you’re comfortable with unpredictable and unlimited financial risk (you shouldn’t be), health insurance is a mandatory part of life. There are hundreds of plan options available that are a real pain to weed through. But, here are the main health insurance types for families taking a mini-retirement:
COBRA- a federal law requiring employers to make the same group health insurance policy available to past employees for 18 months after an employee leaves a company. If you have good coverage and want to keep it, this is an option to do so. But, it’s worthwhile to check on pricing early because you’ll likely be surprised by how much it will cost you without an employer subsidy.
Affordable Care Act- domestic marketplace for health insurance that is either offered by State or Federal government through an exchange. Normally, you can only sign-up for ACA plans at certain times of the year, but leaving your job (and your employer provided health insurance coverage) counts as a “qualifying event” so you can enroll at that time regardless of when it is during the year. ACA insurance premiums are based on family size and income (keep in mind that W-2, 1099, stock sale gains, and dividends are all counted as income).
If you are going to be within the US during your mini-retirement, your low income for the year may make ACA a great option. There are a number of resources available to help sort through the different plans. One additional note is that there are very few nationwide coverage plans left on the exchanges. So, if you plan to be moving around the US a lot, it may be worth looking at alternative options.
Travel Medical Insurance- typically provides limited coverage only while outside of the US. This option is viewed by most US travelers as supplemental insurance since it usually does not cover pre-existing conditions, ongoing expenses within the US, and a host of other items. Most conclude that a travel health insurance policy does not offer the necessary protection from financial risk to be your only policy. You could layer a travel medical insurance plan on top of a domestic policy to provide necessary short-term coverage .
International + Domestic Insurance- bundled US and international health insurance plan. If you’re like a lot of people taking time off work for a mini-retirement, a mix of time in the US and international travel may be on your agenda. There are a handful of domestic insurers and brokers that provide combined domestic and international insurance options. The benefit is that you receive comprehensive coverage and can clearly assess potential financial liability and care coverage in a single package. You also only have to work with a single agency for benefit questions and claims.
Reviewing health insurance contract plan options requires some real fortitude. Boiling it down to the most important elements, these are the coverage technicalities to take into consideration:
Plan type- choosing a PPO, HMO, international, or other type of plan determines the extent of coverage you get within a network of designated providers. Note that coverage networks are getting smaller, but all plans under the ACA must cover emergency care even if out of state and/or out of network (though this does not apply to international coverage).
Premium- amount paid (on a monthly or annual basis) to buy access to the coverage plan. This is the minimum amount you will pay for coverage.
Deductible- how much you have to pay before the health insurance starts covering costs. If you choose a qualified, high deductible health plan, you are eligible to contribute to a health savings account, which can be a great option for turbocharging tax-free retirement savings
Co-Insurance- how much (usually shown as a percentage) you have to pay once your deductible is paid
Co-Pay- how much you have to pay out of pocket for an office visit, test, or prescription
Out of pocket maximum- the most you would be on the hook to pay in any given plan year. This is the most important number to consider. Healthcare expenses are the number one reason for individuals filing for bankruptcy, likely because people lack an understanding (or fail to fully consider) the worst case scenario.
Lifetime maximum- how much in total the insurance will pay over the lifetime of the policy. Also important for worst case scenario considerations.
Case Study: global insurance for global citizens
After we had sufficiently organized our finances, transitioned our work and downsized our material possessions, the freedom to relocate made all the places we had been thinking about going become real possibilities.
Setting up shop in a low cost of living area where we could enjoy a higher quality of life had already been on our minds. And the culture, cuisine and climate of Mexico was calling our names. Before we could go somewhere so exotic and dangerous, though, we needed to make sure we had insurance*!
*That was sarcasm, by the way.
At the time we were preparing to head South of the Border, Max had already been working as an independent product manager, but 99.9% of our healthcare costs were covered by the employer provided policy through my (Brittany’s) full-time job. As the company was amid acquisition, we were lucky to be able to transition to COBRA with six months subsidized. It simplified the decision process for the beginning of our location independent venture, and we added an affordable supplemental travel insurance for that time period.
But, as the half-year mark approached, we knew we had to re-open the can of worms that is global insurance shopping. The matter was further complicated by the fact that we had some business and personal commitments that would keep us on American soil for a few months. A brief but dizzying search of our options proved it was practical to pay out of pocket to extend COBRA until we’d be expatriating again. It was a hefty $1600, but it was more comprehensive than we’d get for the same price on the open exchange. And we strategically used that time to do complete rounds of doctor visits and dental check-ups.
Since our intention was to use our mini-retirement to connect with greater purpose as global citizens, international coverage was weighted more heavily in our decision. At the same time, we weren’t comfortable going with 0 domestic coverage. Especially because extended trips back to the US for work projects and to visit family were also part of the plan.
Naturally, like any economic and efficiency-minded individuals would do, we created a spreadsheet to compare our options. Again, since we wanted to be covered within the US and abroad, we looked at two main categories:
Two other factors that we ruled out and added in:
Coinsurance - is one of the ways providers split the cost of paying for services. Deductibles and copays are forms of cost sharing too, except that coinsurance--which is usually set at a fixed percentage--applies even after the deductible is met. Since we knew we’d be looking a high deductible plans, we decided early on that coinsurance didn’t make sense , so we only looked at policies with 0% coinsurance.
Maternity - coverage was also a factor for us since we’re 30-somethings considering having children. But, we weren’t far enough along in our family planning to know where or when (or how*) it would happen. We did some research on what it would cost to pay out-of-pocket to give birth abroad, and took that into consideration.
*no, we don’t think a stork will bring our baby, though that would be cool.
Our final analysis tallied the monthly premium, deductible, copay and forecasted out-of-pocket expenses to calculate an estimated 6-month cost that helped standardize an otherwise jumbled comparison.
At the time we were making this decision, there were no global options that were accepted as qualifying coverage under the ACA so we had to account for the penalty for being uninsured (even though we had better insurance than most people going through the exchange). But, luckily that piece of the policy has been eliminated, so we won’t have to get into that cluster*@%!
Why IMGLOBAL is a Great Choice
Shopping for global insurance is one of those experiences that has a way of never feeling satisfying. The insurance business is based on risk aversion after all. But, ultimately, we are happy with what we got.
IMGlobal is our best health insurance choice for 3 main reasons:
US coverage is available for 6 months and contract with the UnitedHealthcare PPO network (which we had previously and were happy with)
Maternity is covered after 10 months* and the deductible is subsidized for care provided outside the US
(*of continuous coverage in the premium plan or higher)
High deductible options offer a good value for “catastrophic coverage” and a decent suite of services
Also, as a married couple, being just 2 people doesn’t qualify for a family plan “discount”, so we went with a less expensive option for Max and paid up for a premium plan that will cover maternity care for me (Brittany) if/when we get pregnant.
In total, we paid $5,300 for both of us for the year, but it gives us the comfort to pursue worldwide travel and access care in ANY state when we’re in the US.
If we had forgone the maternity coverage, the cost would have been $1,000 total. Considering the deductible, and the estimated costs of giving birth abroad, we would probably pay the majority out of pocket anyway. But, we feel it’s worth the investment to have the peace of mind if any complications arise.
As a healthy young couple, we are able to pay for routine, preventive care costs. Since I’m a borderline naturopath, this almost works out better. If, god forbid, we have a major accident or a more chronic condition develops, $15,000 is the most we’ll pay for related care. And we have that amount accounted for between our HSA and savings account.
In the end, we have comprehensive global insurance coverage that is a better value than what we get in the US alone—that’s more flexibility and more peace of mind at a more reasonable cost for us.