Travel Medical Coverage – Pros and Cons of Primary vs Secondary Coverage

Medical coverage should be an integral part of any travel insurance plan whether you buy coverage from a tour operator, cruise line, travel agent or a travel insurance comparison web site.   It can be a life line to help defray medical costs while traveling.  Medical costs, which in many cases either isn’t covered by at home medical plans due to territorial limitations or their benefits are scaled back because treatment is “outside of network”.

Medical coverage usually have a couple of common characteristics; they usually have a stated maximum amount that will paid and they may contain a per incidence deductible and/or co-pay.  In almost all plans coverage is only provided while you are on the trip and will not pay for continuing treatments once you’ve returned.  In addition coverage can either be primary or secondary.   Also, pre-existing medical exclusions may or may not apply depending on whether the plan offers a “waiver” of pre-existing medical conditions exclusion.

Primary and secondary are insurance concepts that usually apply to the  medical and medical evacuation coverages.  They also might impact personal effects coverage, but that’s another story.  Primary means that regardless of any other insurance you might have that might cover the same loss you will only have to deal with the travel insurance company.  Secondary means that you will have to submit your claim not only to the travel insurance company, but also to your back home medical coverage. While you pursue your claim with both companies the travel insurance company will not pay until you have a statement from your at home company as to what they will or will not cover.  This statement is usually called an “explanation of benefits”.  The travel insurance company can not complete their adjustment of your claim until they have this document to see what, if any, are the unpaid portions.

PROS & CONS

 PRIMARY COVERAGE

PROS:  You only have to deal with the travel insurance company and you don’t have to wait for your own health insurance to make a final determination.  The time saved might be critical if a severe medical emergency happens and payment must be guaranteed.

CONS:  primary plans tend to be more expensive and the more reasonably priced ones provided lower maximum limits than secondary plans.

SECONDARY COVERAGE

PROS:  Secondary plans tend to be less expensive because they don’t pay first.

CONS:  Claim payment might take longer because the claim must first be adjusted by the “at home coverage” before the travel insurance company will consider payment.

A small number of primary plans also use a “coordination of benefits” clause.  “Coordination of benefits” is another insurance concept that is designed to minimize the possibility of being over paid for the same claim.  What it means is that the insurance companies will coordinate their respective coverages so that coverage will not overlap.  There are specific rules that apply when group health insurance companies coordinate coverage and one of those rules is that the coverage that you’ve had the longest will become primary and the other coverage will be secondary.   These type of plans should really be considered as being “secondary” .

One Response to “Travel Medical Coverage – Pros and Cons of Primary vs Secondary Coverage”

  1. John Cook Says:

    An update since I published this post 3 weeks ago; we just heard from TravelSafe, one of the few companies that has a coordination of benefits clause in their plans, that effective immediately, that clause will no longer be enforced. Kudos, to TravelSafe and their underwriter for finally doing the right thing. If you advertise your medical coverage as primary than you can’t include a coordination of benefits clause. It’s as simple as that!

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