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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.
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