One of the first concerns my wife, Tracy, and I had when we chose to house sit full time was how health insurance coverage worked for full-time travelers. Quite honestly, it’s also one of the number one questions I get from my clients. Health insurance is often a confusing concept. Even the most straightforward situations can be difficult to navigate.
Even though the health insurance mandate by the US government was repealed, it’s still wise to make sure you’re covered. According to a poll by Kaiser, 19% of people in America said they wouldn’t be able to pay a medical bill that was $500 or more, and 60% of Americans who struggle with their medical bills have been contacted by a collection agency.
A life of travel can be an incredible experience, but you definitely don’t want to drive yourself into debt because you’ve decided to go uninsured and incur unexpected medical expenses.
Luckily, there are a few steps you can take to figure out what type of health insurance coverage you’ll need, and how you can protect yourself in case you’re confronted with a medical emergency while you’re on the road.
ESTABLISH A “HOME BASE”
The first step you’ll need to take when creating a health insurance plan for yourself as a digital nomad is to establish a “home base”, or domicile, if you haven’t already. Many health insurance plans vary state-by-state which means you may have different options depending on your domicile state.
Some full-time travelers will domicile in a specific state solely because of its health insurance options. For example, Florida is a popular state amongst travelers looking for traditional health insurance plans that will provide nationwide coverage.
CONSIDER THE NETWORK (PPO vs HMO)
When you’re a domestic traveler, the number one thing you can do for yourself is to check your health care network’s range of coverage. This is true whether you are currently covered under a plan or shopping around for new options. Although most areas of the country tend to be covered by some of the major players like Blue Cross Blue Shield or Cigna, others may not be. Some regions’ medical centers accept local health insurance networks, or they may be considered “out of network” which could result in a large medical expense if you have an unexpected health scare while traveling.
As a general rule of thumb, PPO (Preferred Provider Organization) plans offer more options for coverage while you’re traveling. For example, even if you have to visit a provider that is not in the network, you most likely will still have some coverage.
On the other hand, HMO (Health Maintenance Organization) plans typically do not cover any medical expenses out of network, and you usually have to have a referral from your primary care doctor in order to see a specialist. HMO plans are usually cheaper than PPO plans due to these restrictions.
As far as traditional health insurance plans go, you’ll mostly want to look for PPO plans that will provide coverage when traveling out of state.
If you’re a W2 employee who works remotely and receives health insurance benefits, you may already be covered under a plan that works nationwide. Check with your HR Department to help you understand your coverage options while you’re traveling.
If you’re self-employed, you may have more flexibility to find the type of coverage you need through a network that supports the travel destinations you’ve envisioned for yourself; however, health insurance will be expensive! You can either pursue health insurance coverage through the ACA marketplace, or you can look into private insurance options. Whatever route you choose to take, make sure you weigh the cost against the value of each plan.
FINDING HEALTH INSURANCE THROUGH THE ACA HEALTH CARE MARKETPLACE
Finding an insurance plan on the Marketplace may be the best option for you if you have a pre-existing condition as any plan on the Marketplace must cover anything pre-existing. If you have lower income, the tax credits you can receive will also significantly reduce your monthly premiums.
Through Healthcare.gov, you can find health insurance coverage that works for you. To qualify for marketplace insurance, you have to meet three criteria:
- Be a US resident.
- Must be a US citizen or national (legally present).
- Can’t be incarcerated.
You also have to wait until the Open Enrollment period, which typically starts November 1st, unless you have had a “qualifying event” such as having a baby, getting married, or changing jobs.
To look at your options, head to Healthcare.gov, enter your zip code and personal information, and browse through your available plans and estimate costs. Depending on your income, you may qualify for tax credits that lower the total cost of your insurance. These tax credits can greatly reduce your monthly premiums, and you can even receive your tax credit in advance from the IRS.
ARE YOU LOOKING FOR INTERNATIONAL COVERAGE?
Looking to travel outside of the US? You’ll need to know how your coverage protects you when you’re abroad. Many health insurance plans don’t cover any medical expenses incurred while abroad, while others only cover a percentage. Some insurance providers offer supplemental health coverage that covers the length of your international trip.
Keep in mind that traveler’s health insurance isn’t the same as travelers insurance, which can help to cover trip cancellation or other losses you incur while traveling. Make sure you have the appropriate coverage for your trip, even if it requires having both supplemental health insurance travel coverage and travelers insurance!
HEALTH INSURANCE IF YOU’RE SELF-EMPLOYED
Being self-employed makes obtaining health insurance significantly more difficult, especially if you plan to travel full time. Finding the coverage you need either through the ACA Marketplace, or through a private insurance seller can be difficult. A few things you’ll need to look at are:
- Whether the insurance’s network will cover the areas you’re traveling.
- Whether the cost for the insurance coverage will fit into your budget.
- What additional expenses there may be for things you need like prescriptions, annual exams, or ongoing medical treatment for a pre-existing condition.
The sad reality is for many, health insurance coverage is a huge deterrent to leaving their full-time job and becoming self-employed to pursue a travel-focused lifestyle. The average cost of Obamacare, before tax credits, is just under $400/month. That doesn’t even include deductibles and out-of-pocket maximums that can reach into the 10’s of thousands! If you have pre-existing conditions or need more expansive coverage, that number could be significantly higher. Other factors are taken into account, as well, such as the number of people covered by your policy, your age, current bill of health, and location.
While some people qualify for tax credits under Obamacare that help take some of the financial burden away from paying a hefty monthly premium, this isn’t true for everybody. In fact, if you’re a successful self-employed business owner, this is likely not true for you. Even if you choose not to go the Obamacare route, private health care plans tend to be outrageously expensive by comparison. Although the coverage is better, the value for the prices being charged often may not be there.
Additionally, you could consider looking into a health share program. Please keep in mind that healthshare programs are not health insurance policies. Healthshare programs tend to be less expensive, and act as an expense-sharing group for people who are generally healthy and don’t wish to enroll in traditional health insurance. However, they’re not a perfect solution.
Healthshare programs often aren’t required to cover pre-existing conditions, and because they’re usually associated with religious organizations, they often don’t cover family planning costs, or any other medical costs that don’t meet their beliefs.
I would also recommend that anyone considering a healthshare program have significant reserves of cash on hand. It’s not uncommon for patients to pay their medical bills up front and then submit the receipt to the company for reimbursements. It can take months to receive this reimbursement and don’t expect the company to reimburse you for your credit card interest while you wait!
WHAT IF YOU HAVE A PRE-EXISTING CONDITION?
Under current laws, a health insurance company can’t refuse you coverage or charge more if you have a pre-existing condition. However, with constantly changing federal insurance laws about how the ACA marketplace (and insurance in general) is regulated, that could change. This isn’t just true for the ACA marketplace. There has been talk about making it legal for insurance companies to deny coverage to those with pre-existing conditions, or to remove coverage in the future. This could mean that even if you have insurance through your employer, your coverage is still at risk.
As many as 130 million adults under the age of 65 in America have a pre-existing condition, so this doesn’t impact a small number of people. Traveling as a freelancer or otherwise self-employed individual, and needing to find (and keep) an insurance policy that covers your pre-existing condition, may be cost-prohibitive. However, there are a few things you can do if you have a pre-existing condition, like work part-time at an employer who allows virtual work or who offers insurance to part-time employees. This may help you to bridge the gap between your dream of becoming a full-time traveler and having a need for specific insurance coverage.
DO YOU QUALIFY FOR MEDICARE?
Medicare coverage for Part A and B will cover you anywhere you travel within the United States. There are even some (extremely rare) situations where it will cover medical emergencies in a foreign country. However, you need to be watchful when you travel. Some Medicare plans only offer full coverage if you go to a provider within your network. If you’re travelling to an area where providers are largely outside of your network, be mindful that any unexpected medical expenses may be much larger than you had anticipated.
Do you plan to do a lot of international travel while you’re covered by Medicare? You have options. Some Medigap coverage offers emergency medical coverage for US citizens who are traveling outside of the United States, which can be useful for international travelers who are concerned about health care while they’re abroad.
COME UP WITH A GAME PLAN
Although health insurance is a critical component of living a financially successful life as a digital nomad, it’s even more important to have a game-plan for medical emergencies that might happen while traveling. It’s not fun to think about the worst-case-scenario, but knowing all of your options ahead of time can save you a lot of headaches in the long run.
Take the time to think through any potential medical emergencies that might happen and thinking through a plan for each of them can not only save you money, it can also save you stress in the moment as you try to decide the best thing to do. Wherever you travel, be aware of what hospitals or urgent care centers near your location are within your network, and keep a relevant copy of your health insurance card accessible.
Health insurance, although not the most exciting topic to consider, is an important part of being location-independent. If you’re not sure where health care coverage fits into your finances, it might be time to contact a financial planner or health insurance broker in your area who can help you to piece together a comprehensive plan that makes room for insurance and prioritizes savings to cover unexpected medical expenses that aren’t covered.
You’re traveling because you want to live a life that you enjoy and are proud of. Don’t let huge medical bills and health insurance coverage confusion get in the way of that! Feel free to contact me with any questions – I’m happy to help!