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health insurance research

Medical tourism vs. medical insurance tourism

Consumers adapt to high health care costs with these creative responses

by Tony Novak, CPA, MBA, MT, NAHU certified consumer driven health care consultant, originally published 5/19/2011  revised 8/12/2011

"Medical tourism" and "medical insurance tourism" are two terms that arose out of American consumer's need to manage health care costs in recent years. Both strategies are presumed to be safe and legal but consumers must take precautions and check the details of the coverage ensure that their strategies perform as expected.

Medical tourism refers to travelling outside of the home area to obtain medical treatment in an area where the cost is lower. While it usually refers to travel outside of the U.S. - India, for example - we now see increasingly frequent medical travel in some forms of treatment from expensive urban areas in the U.S. to facilities in less expensive rural areas still within the U.S. The cost of medical treatment is often so much lower in other countries that the entire travel expense is covered and the net out-of-pocket cost is still less than at home. Medical tourism is unlikely to be affected by national health reform measures.

Medical insurance tourism refers to travel by residents of states with restrictive health insurance laws to states where lower priced insurance is more readily available. Once a policy is legally issued in one state the coverage is valid with doctors and hospitals throughout the U.S. including in the states with more restrictive insurance. Some common examples are:

Individuals in the examples listed may be able to reduce their health insurance expense by hundreds of dollars per month or, in a few exceptional cases, save more than $1,000 per month. Policies purchased out-of-state are typically for a period of less than a year. We expect that the demand for this strategy will disappear in January 2014 as federal health reforms become effective.

About the author - This Web page and related content is written and periodically updated by Philadelphia-based consumer finance writer Tony Novak who has covered health care reform issues for various formats for about 30 years. Comments, questions, feedback and updates are welcome to help keep content relevant and up-to-date. Contact the author directly by e-mail, on Twitter or through the contact information included on his Web site. Article reprint rights as well as specifically customized content may be available on request. Some content may be offered for reprint without charge; other content may be offered for a fee. 
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This web site is independently owned and managed by Tony Novak operating under the trademarks "Freedom Benefits", "OnlineAdviser" and "OnlineNavigator". Opinions expressed are the sole responsibility of the author and do not represent the opinion of any other person, company or entity mentioned. Tony Novak is not an agent, broker, producer or navigator for any federal or state health insurance exchange but may provide uncompensated advice, reviews and referrals to these official resources. Novak is compensated as an accountant, adviser, affiliate consultant, marketer, reviewer, endorser, producer, lead generator or referrer to some of the other commercial companies listed on this site. Information is from sources believed to be reliable but cannot be guaranteed.