Traveling? Medicare Might Not Cover You

Dear Carrie,

My husband and I recently retired and plan to spend the next few years traveling, mostly abroad. We're both enrolled in Medicare, which we've heard won't cover us on international trips. Should we consider supplemental coverage?

Dear Reader,

I'm thrilled to hear you're taking full advantage of your early retirement years. One of the things I look forward to most when I retire is exploring new places and connecting with others around the world.

That said, you're wise to expect the unexpected. Apart from being unpleasant and a potential disruption to your travel plans, an accident or illness could lead to big out-of-pocket costs—even if you're covered by Medicare.

In fact, the amount of coverage you'll have depends not only on where you go but also on whether you have Original Medicare (Parts A and B) or a private Medicare Advantage plan. And in some cases, it can make sense to purchase additional travel insurance, regardless of the type of Medicare coverage you have.

Here's how you'll be covered depending on the type of plan you have—and what you can do if your coverage falls short.  

When traveling in the U.S., rest assured that Original Medicare will cover you in all 50 states plus all U.S. territories, such as Puerto Rico and the U.S. Virgin Islands.

However, what you've heard is true: Original Medicare doesn't pay for health expenses incurred outside the U.S.—unless:

• You're traveling between Alaska and another U.S. state through Canada "without unreasonable delay," and a Canadian hospital is closer to you than the nearest U.S. hospital capable of treating your illness or injury. Medicare determines what qualifies as "without unreasonable delay" on a case-by-case basis.
• You have a medical emergency while you're traveling in the U.S. and a foreign hospital is closer to you than the nearest U.S. hospital capable of treating your illness or injury.
• You live in the U.S. and a foreign hospital is closer to your home than the nearest U.S. hospital capable of treating your medical condition, regardless of whether it's an emergency.

If you're on a cruise, be aware that you'll be covered only in U.S. waters. Once you're more than six hours away from a U.S. port, Medicare won't pay for medical care.

All Medicare Advantage plans must cover, at a minimum, everything Original Medicare covers, including emergency and urgent care anywhere in the U.S. However, a Medicare Advantage plan may not provide standard coverage outside your service area—a significant drawback for those with a vacation home in another state or who otherwise frequent a different part of the country. Be sure to check with your plan provider to understand the limitations outside your standard coverage area—and consider adjusting your coverage or plan provider as necessary.

Be that as it may, some Medicare Advantage plans do offer at least some coverage for foreign travel, though there may be restrictions. For example, some plans may require you to pay out of pocket and then seek reimbursement, while others may cap their overseas travel benefits. Always research the details of your policy before you travel so you understand exactly what is and isn't covered.

As for cruises, Medicare Advantage's domestic rules apply when you're in U.S. waters, and foreign-travel rules apply when in international waters.

If you have Original Medicare, you might consider purchasing a supplemental Medigap policy, which is a private plan that helps fill the shortfalls in Medicare coverage, often including international travel. If you wind up needing your Medigap coverage abroad, you'll generally have a $250 annual deductible and a copay of 20%, with a lifetime limit of $50,000. Also, coverage is typically limited to the first 60 days of your trip.¹

For both Medigap and Medicare Advantage plans that cover international travel, it's important to understand your provider's distinction between emergency care—for a condition or an injury that places your mental or physical health in serious jeopardy—and urgent care for less serious conditions, such as an ear infection, which may or may not be covered.

Given all of these restrictions on care, I advise that all international travelers look into purchasing additional travel insurance. In addition to covering things like nonrefundable trip costs and cancellations, most travel insurance policies cover emergency medical expenses—within certain limits. For example, some plans don't cover accidents that result from adventure activities or expenses related to preexisting conditions, so you may wish to purchase a more comprehensive policy.

As pricy as supplemental coverage can be—averaging between 5% and 6% of your total travel costs—the peace of mind it provides will allow you to enjoy yourself without the shadow of unexpected medical expenses looming over your trip. Safe travels!