10 Common Mistakes Expats Make Buying Health Insurance For Living Abroad

Avoid 10 common mistakes when buying health insurance for living abroad. Learn how to save money and get the right coverage by choosing deductibles, networks, prescription drugs, exclusions, reading the fine print and more. Expert tips to reduce your expat medical costs. minutes

01/04/24

  Mins Reading Time

About the author

Hi, I'm Marco Sison. I worked in finance for Fortune 50 companies before retiring early at 41 years old. I have been an expat for over 10 years, living in over 50 countries to show you the best ways to save, invest, and live in amazing countries outside the USA. I am a trusted resource on personal finance and overseas retirement for US News & World Reports, HuffPost, MSN Money, USA Today, ABC Network, Yahoo Finance, Best Life, Association of MBAs, and the iTunes documentary Seeking FIRE.

QUICK SUMMARY- Common overseas health insurance plan Pitfalls

  1. 1
    Choosing cost but ignoring coverage
  2. 2
    Filing all your claims
  3. 3
    Not paying all your fees at once
  4. 4
    Failing to use a global health insurance broker
  5. 5
    Picking a low deductible
  6. 6
    Including US coverage
  7. 7
    Not reviewing the network of providers
  8. 8
    Ignoring prescription medications
  9. 9
    Not considering the total insurance cost
  10. 10
    Skipping the fine print
  11. 11
    Bonus TIP- Missing your HSA discounts

Are you planning on moving abroad? Buying my first overseas health insurance policy was one of the most confusing decisions I had to make when I moved abroad. As an expat, it's crucial to have adequate health insurance coverage to protect yourself and your family in case of unexpected medical emergencies.

With so much confusing terminology and ambiguous jargon, it is easy to see how expats make mistakes buying expensive insurance, but still having inadequate coverage, unexpected expenses, and unnecessary stress.

In this article, I'll discuss the top 10 avoidable mistakes expats make when buying health insurance for living abroad, so you can avoid making the same mistakes and make an informed decision about your expat health insurance needs.

By avoiding these common mistakes, you can get the right medical coverage for the right price.

By the end of this article, you'll better understand the potentially costly pitfalls to avoid. Armed with correct information, you can make an informed decision and have peace of mind knowing that you and your family are protected, no matter where you are in the world.

Other Guides On Expat Health Insurance

Why Travel Medical Insurance Coverage Isn’t Enough For Expats Abroad
Cigna Expat Insurance- Best Global Health Plans For Living Abroad
Affordable International Health Insurance for US Citizens Living Overseas
20 Facts About Healthcare In Colombia Every Expat Must Know
Choosing An International Health Plan- Checklist For Buying Expat Insurance Coverage
The Expat Guide To Colombian Health Insurance Plans: EPS, Private, Global
A Step-By-Step Plan For Lowering Your Cost of Expat Health Insurance
Top 12 Best Medical Insurance Companies For Expats Living Abroad And 1 To Avoid [2022]
Expat Health Insurance Plans- Understanding Your Medical Coverage Options Abroad

The 10 common mistakes when buying health insurance for living abroad

1) Prioritizing Price Over Coverage When Choosing Global Insurance Plans

A high-end gold or platinum-level expat health insurance option can top $8,000 per year, while a high-deductible global plan with less coverage can start at $100 per month. However, regarding expat insurance plans, the adage "You get what you pay for" holds true. The more you spend on insurance premiums, the better your healthcare coverage.

You may immediately gravitate toward the cheapest global policy when using an online health insurance quote form. But the cheapest option may not be the best for your family.

It's essential to think carefully about the type of coverage vital to you and your family. Details matter.

  • Are you planning on having kids? Many plans have a waiting period for pregnancy coverage.
  • Does your family have a history of cancer? Getting stuck with the astronomical cost of specialist treatments can be financially devastating.
  • Do you need to see an eye doctor? Vision and dental coverage are extra options for health insurance.

By only focusing on benefits and coverage that matters to you, you can save thousands of dollars on your expatriate health insurance plan.

Read my article How-To Save On Your Expat Health Insurance Cost for detailed tips on slashing your global health insurance premiums by 50% or more.

2) Not Paying Attention to Your Number of Claims

Small-value claims can end up costing much more in the long run. Plan your claims carefully, as they can influence your insurance cost at renewal. Some expat insurance companies do not consider the magnitude of the claim but the frequency. If you have a history of filing excessive insurance claims, you may end up paying higher premiums.

A doctor consultation abroad can cost less than $30, but your premiums could rise by more than that if you claim that doctor visits are on your insurance. Personally, I pay out of pocket for 90% of my medical treatments and prescription drugs. Why? Because the cost of healthcare outside of the United States is so low, I can pay and avoid filing against my insurance policy.

In addition, five years of no claims may qualify you for a claims-free discount, saving you even more money on your cost of health insurance for living abroad.

3) Choosing A Smaller Monthly Payment Rather Than Paying Annually Upfront

I know the smaller monthly payment looks enticing, and while paying monthly may appear to be the best option for people on a tight budget, monthly premiums can cost you more in the long run. First, some insurance firms will give you a 5% discount on your insurance coverage if you pay in quarterly or semi-annual payments. Paying your annual premiums upfront can slash global health insurance costs by 15% or more.

Additionally, making an annual payment at the start of the policy year eliminates the likelihood of you missing a monthly payment and chancing your insurance lapsing.

4) Not Using A Worldwide Health Insurance Broker

While logic states that using a "middleman" would increase your cost, my experience is the exact opposite. A health insurance broker often represents several companies, so they can direct me to where I can get the right coverage for the best price.

Even though most expat health insurance companies offer you all the information on their website, I haven't found any price differences between going directly with a specific insurance company or using an expat insurance broker website to get multiple quotes from different expat insurance companies in one place.

Additionally, a licensed insurance agent is impartial and educated on the details of each type of International Health Insurance Plan. They can provide assistance with your decision-making process, help compare the pros and cons of different expat medical insurance providers, and help you find the most cost-effective policy that meets your family's needs.

5) Choosing An Unnecessarily Low Deductible For Your Expat Healthcare Plan

The importance of looking into the deductible when buying health insurance for living abroad is crucial. The deductible is how much you must pay upfront in medical expenses before the insurance company starts covering the medical expenses.

A deductible is another way insurance companies pass the cost of healthcare treatment on to you. Depending on the plan, the deductible options can range from $100 to $25,000 annually, significantly affecting how much money is spent on medical treatment.

While I said in point #1 that you "get what you pay for," this can also mean paying for something you don't use.

If you are young, healthy, and have no health conditions that need treatment, you could consider raising your deductible to reduce your monthly insurance premiums.

Check out my real-life sample quote below. Raising the annual deductible from $250 to $10,000 slashes 60% off the price of this global health insurance plan.

quote showing how changinge deduction options saves money when buying health insurance for living abroad

Save money by choosing a higher deductible option

If your lifestyle and health mean you seldom file claims, the extra money from the higher deductible plan will end up in your wallet rather than the insurance company.

6) Not Excluding Coverage In The US (or other high-cost countries like Canada, Hong Kong, and Japan)

As the American healthcare system is one of the most expensive in the world, excluding it from your plan can reduce your premium costs significantly. If you add the US to your area of coverage, the price of your insurance can jump by over 80% annually. However, you can save significantly if you eliminate or even limit the amount of time you spend in the US (some policies allow short trips to the US for an added cost).

7) Not Researching The In-Network Hospitals and Doctors Offered

Are the best foreign hospitals included in your international health insurance company's network? Did you know that the cost of healthcare services for any out-of-network treatment is significantly higher?

To keep your cost of health care down, stay within your international health insurance policies' network for any urgent care, doctor visits, or lab tests.

Check my article on the Best Medical Insurance Companies For Expats Living Abroad to compare networks, prices, and customer service. 

8) Not Reviewing The Types Of Medication You Take To Reduce Your Prescription Drug Coverage

Discussing your medications with your doctor can save you money when adding prescription benefits to your international health insurance policy. Start with taking an inventory of your medication regularly and ask your doctor if any could be switched to a generic medicine. Additionally, ask your doctor if there is a "therapeutic alternative" that treats the same medical condition but costs less under your plan. Your pharmacy insurance coverage may charge a 35% coinsurance rate for one drug, for example, but just a 20% coinsurance rate for a similar drug that is a preferred brand name by your insurer.

Other tips to save money on prescription drug benefits include asking your doctor to switch from two low-strength pills to one higher-strength tablet or prescribing a 90-day supply at only 2.5 times more than a 30-day supply.

 INSIDER TIP : Legal drugs abroad- Before moving abroad, look at all the medication you are taking. Not all drugs legal in the US are legal in every country. Examples 

Medicinal marijuana and CBD are legal in the US, but still criminal in most countries

9) Only focusing on monthly premiums and ignoring health insurance cost-sharing

The most obvious costs are your premiums or what you pay when buying health insurance for living abroad. However, not including deductible, copayment, or coinsurance in your total cost of healthcare insurance is a mistake.

Insurance cost-sharing (deductibles, copayments, and coinsurance) must be paid out of your pockets before your expat medical insurance company kicks in.

Expats who fail to consider this cost-sharing will be shocked by how much their medical bills increase.

For example, the global medical policy below, with a low $105.70 monthly premium, may seem like an attractive option for health insurance

IMG quote for expat health insurance for living abroad

Quote from International Medical Group

However, to get this lower price, I increased the deductible option to $10,000, and the plan options include a 20% coinsurance in addition to the high deductible. Deductible and coinsurance are real costs that the policyholder must pay before receiving coverage. Expats needing urgent medical attention could be left with a significant bill.

In addition, some policies may have different deductibles and copayments for different types of medical services, such as hospital stays, specialist consultations, or prescription medications. Failing to consider these costs can lead to unexpected expenses and financial strain for expats.

You may find it better financially to opt for a policy with a higher monthly premium. Still, lower cost-sharing amounts to ensure that you are fully covered in the event of a medical emergency.

10) Avoiding Reading the Fine Print Of An Overseas Medical Insurance Policy

I get it; insurance policies are complex and filled with legal jargon. Trying to make sense of pages and pages of strange terminology can make it difficult for expats to understand the terms and conditions of their global health insurance coverage.

But not reading the fine print can be costly, leading to medical and financial consequences. Use a Checklist For Buying Expat Insurance Coverage to ensure you don't miss the important details.

Skipping the description of benefits and the fine print can mean you are not fully covered in the event of a medical emergency. Medical insurance policies often have exclusions and limitations buried in the fine print. f expats do not read and understand these exclusions and limitations, they may be caught off guard by unexpected medical bills or find that the insurance company denies their claim.

For example, my international insurance policy will not cover any injuries I suffered hiking up a mountain over 14800 feet high. Insurance covers me if I need to be helicoptered to safety after a heart attack at 10,000 feet, but if I break my leg at 15,000 feet, I'm paying for everything.

Global Health Insurance Options Explained In Simple English

Need help understanding the insurance jargon and legalese of your global health insurance policy? This is where independent brokers can act as advisors. A qualified insurance broker can help you navigate the complex contract language, clarify the policy in simple English, and ensure you make an informed decision.

Additionally, independent brokers can assist you when comparing policies from different insurance providers to ensure that you compare apples-to-apples.

11. Bonus Tip for Expat Americans Living Abroad- Use Your HSA To Reduce Your Medical Costs Living Abroad

Not using your Health Savings Account (HSA) while you are overseas is a simple mistake that expats can avoid.

While you cannot contribute to your HSA account if you only maintain health insurance for living abroad, tax laws do not prevent you from using funds you already have in your HSA account to pay for qualified medical expenses outside the United States.

tax advantages of using an HSA with a health insurance plan abroad

An HSA is a tax-free way for American expats to pay for medical treatment while traveling. You can use your HSA funds to pay for medical treatments, including transportation to another city, if the trip is primarily for receiving medical services and lodging for an additional person traveling with you when receiving medical care.

Additionally, you can use your HSA funds to pay for medications purchased in another country. Technically the same over-the-counter medications (OTC) and prescription drugs (Rx) that qualify when you're in the United States qualify if purchased overseas.

 INSIDER TIP : Ineligible HSA expenses- While the HSA is a fantastic tax-free way to save money on your expat healthcare costs, it is crucial to understand the rules and regulations surrounding the types of expenses you can pay with your HSA. For example, you cannot pay your monthly premiums with funds from your HSA account. However, you can use your HSA for co-pays, coinsurance, or any deductibles.

Another example is purchasing medications. You can use your HSA to pay for OTC or prescription drugs, but only if they are legal in the US and the country you're purchasing them from.

Note, you cannot include in medical expenses a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if the trip is made on the advice of a doctor.

Key Takeaway- Mistakes To Avoid When Buying Health Insurance For Living Abroad

Buying worldwide medical insurance coverage is a critical investment for overseas expats. While the costs of an expatriate health plan can average $5000 per year, the peace of mind and financial protection for your family is worth the price. But don't spend money unnecessarily. To guarantee the best value for your business, ensure you don't make these common mistakes when buying overseas health insurance:

NEXT STEPS

If you liked this story, you will enjoy these other posts on expat insurance

A Comprehensive Guide To Philippines Health Insurance For Expats
24 Facts About Healthcare In The Philippines Every Expat Must Know
How To Get Health Insurance In Colombia As A Foreigner

FAQs: Worldwide Health Insurance Coverage For Living Abroad

What types of medical health insurance are available for expats living internationally?

Expats can choose from 3 alternative insurance options: international, travel medical, and local. International offers comprehensive insurance for expats and families living or working abroad for extended periods (12+ months). Coverage includes your host country and travels abroad.

Expats often opt for international health insurance because it protects them in the event of a medical emergency and for the cost of hospital treatment, outpatient care, and prescription drugs. While cheaper local health insurance offers expected benefits, local policies are generally limited to the country of residence. They may not provide coverage for medical care outside of the country, which is a significant disadvantage for expats who travel frequently.

Travel medical plans provide global coverage but generally do not provide any preventative care or wellness benefits. Some travel medical policies only provide coverage for short-term travel outside of one's home country and may limit trips to no more than 90 days. Additionally, while cheap travel health insurance provides limited coverage for urgent care, such as doctor visits, hospitalization, and emergency medical evacuation, it typically does not cover wellness care. It includes restrictions for pre-existing conditions or long-term medical coverage

What are the benefits of having worldwide medical insurance when living abroad?

Worldwide health insurance provides premium benefits, coverage, and medical assistance, including access to emergency medical care, preventive care, and vision and dental benefits.

With a worldwide health insurance policy, expats can ensure adequate coverage anywhere in the world.

Other benefits of buying health insurance for living abroad include:

  • Global coverage - able to access doctors around the world, having in your residence and home countries
  • Access to a broader range of private network of hospitals and international doctors
  • Less waiting times for qualifying benefits
  • Shorter appointment times before seeing your primary care doctor
  • A more comprehensive range of additional benefits (family planning, mental health, vision, dental, medical concierge, teledoc, etc.)
  • Coverage when moving from country to country
  • Emergency Evacuation- medical transport service to leave your post country during a medical emergency
  • Premium Benefits, Coverage And Service- including prescription benefits, mental health services, maternity-related costs

Additionally, expatriate health insurance provides peace of mind and financial protection from potentially devastating medical expenses for individuals and families living overseas. Moreover, overseas insurance plans offer excellent benefits, greater flexibility, and higher quality of healthcare service.

What coverage should I look for when buying medical health insurance when living abroad?

Health insurance for living abroad policies should include emergency medical treatment and routine preventative care. An overlooked but critical coverage is for medical evacuation to a nearby country or your home country if your current government cannot provide adequate medical treatment.

Expats should also review coverage limits, cost-sharing, deductibles, exclusions, and sub-limits. Consideration should also be given to a strong network of healthcare providers and international coverage. Review this Checklist For Buying An International Health Plan to complete the details.

What is the difference between travel insurance and global healthcare insurance?

Travel insurance and global medical insurance plans serve different purposes. Travel insurance fits short-term travel needs, such as trip cancellation or lost baggage, with limited, if any, health benefits. Global medical insurance is for long-term expats who need comprehensive health coverage abroad.

Expats should NOT consider travel insurance as a substitute for a global health plan. While travel insurance may provide some medical benefits, it typically has lower coverage limits and may not cover pre-existing conditions. On the other hand, proper worldwide insurance can provide sufficient coverage for nearly every healthcare need, from pregnancy, mental health, and eye doctor visits to cancer treatment.

How much does a global health insurance policy cost for expats that live abroad?

On average, global health insurance coverage costs around $400 per month. However, the monthly cost of a high-end platinum plan can top $1000 or more. The cost of expat health insurance for living abroad varies greatly. The main factors affecting prices are:

  • Maximum Benefits- the more comprehensive benefits, the higher the price.
  • Age – the older you get, the higher your medical expenses
  • Medical history – Some international plans don't cover pre-existing conditions or require a longer waiting period to access benefits.
  • Worldwide Coverage– which foreign countries in your geographical coverage area will affect the cost of international health insurance, with the US being one of the most expensive destination countries to include.
  • Claims history – some international health insurance companies will raise your renewal premiums for each claim. The more claims you make, the higher your chance of paying more for insurance at every renewal.
  • Adding Plan Benefits- extra optional benefits like maternity coverage, vision benefits, or adult dental care increase your insurance costs.
  • Payment Frequency – annual upfront payments get discounted, while monthly installments cost more.

About the author

Hi, That's me. I'm Marco Sison. I am a survivor of the corporate rat race. I started Nomad FIRE to show you an alternative to the stress and grind of 70-hour weeks to pay off a mortgage, student loans, and countless bills. After getting laid off in 2015, I said screw it all and retired early at 41 years old. I have traveled the last five years to over 40 countries to show you the best ways to save, invest, and live in amazing countries for 70% less cost than the US. I have been featured in: US News & World Reports, Huffington Post, MSN Money, USA Today, ABC Network, Yahoo Finance, Best Life, CW Network, Dr. Wealth, and others. [view press...]

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}