When purchasing a visitors insurance policy, you'll be faced with the task of choosing a plan that best suits your needs. This includes deciding on coverage amount, benefits, a high or low deductible, and many more factors. You'll also notice that there are two main types of visitors insurance policies - comprehensive coverage and limited or fixed coverage.
While a limited or fixed coverage visitors insurance policy may be attractive due to its lower cost, there are certainly risks associated with these types of plans. Let's take a deeper dive at the differences between comprehensive and limited coverage plans and why purchasing a limited coverage visitors insurance policy can be risky.
What Is a Limited or Fixed Coverage Policy?
Limited or fixed coverage plans are basic medical plans where the insurance company only pays a predefined fixed dollar amount for each eligible medical service or treatment after the deductible is met, and the remaining becomes your responsibility. These plans are typically considered low cost insurance plans, but financial coverage is limited.
For example, if you bought a limited coverage plan with a deductible of $50 and your doctor's visit cost $200, and the benefits allowed as per schedule of benefits is $85, that means that the maximum that this type of plan will cover is $85 for eligible expenses. However, the deductible must be satisfied before the insurance covers any costs. This means that the insurance plan will only cover $35 for this visit, leaving you responsible for $165.
Since your deductible has already been met in the example above, any eligible follow-up visits for the same condition in this scenario would be covered up to the benefits allowed as per the schedule of benefits for each visit, so your insurance would cover $85 of a follow-up visit and you would be responsible for all remaining costs. However, if you visit a doctor for another, unrelated injury or illness within your policy period, you'll have to satisfy the deductible again. You'll have to pay a deductible per injury or illness.
A limited coverage policy may not provide adequate coverage in the event of a serious medical emergency. You may end up paying much more out-of-pocket since the policy limits are low compared to a comprehensive coverage policy.
What Is a Comprehensive Coverage Policy?
A comprehensive cover policy offers much more coverage and higher benefits than a limited visitors insurance plan policy and is often the preferred choice for visitors to the United States for a number of reasons. While they may cost a little more than a limited plan, they offer better protection in the event of needing medical care for an injury or illness.
Comprehensive visitors insurance plans work on a percentage-based coverage model and typically have lower out-of-pocket expenses. For example, let's say your comprehensive coverage plan pays 80% of eligible expenses of the first $5000 and 100% thereafter, with a deductible of $50. If your doctor's visit is $200, you'll have to satisfy the deductible of $50. The remaining balance would be $150, and your insurance would pay 80% of the remaining balance. This means your insurance would cover $120, leaving you to pay the remaining $30. Your total out-of-pocket costs would be the $50 deductible plus the $30 remaining after insurance coverage, equaling $85.
For a follow-up visit in the same example, your deductible has already been satisfied so your insurance would cover 80% of eligible expenses. After $5000 of coverage, the policy would cover 100% of eligible expenses.
Why are Limited Visitors Insurance Policies Risky?
Limited visitors insurance policies are often considered risky due to predefined fixed coverage amounts and less benefits. Below are some of the risk factors to consider when deciding on whether a limited or comprehensive coverage plan is right for you.
May Not Have PPO Network
Limited coverage plans don't always offer a PPO network of doctors and treatment centers, so fees tend to be much higher. Comprehensive plans often use PPO networks which offer treatment at reduced rates.
No One-time Deductible
While comprehensive coverage plans offer a one-time deductible for an entire policy period rather than per injury or illness, limited plans do not offer such a benefit. For limited plans, you'll be required to satisfy the deductible per each injury or illness.
More Out-of-pocket Expenses
Due to the predefined fixed cost amount per service or treatment aspect of a limited plan, you'll likely pay much more out-of-pocket than you would with a comprehensive plan. This can add up to hundreds or even thousands of dollars whereas choosing a comprehensive plan can offer protection from paying too much out-of-pocket with flexible percentage-based coverage.
No Travel-related Coverage
Limited plans don't offer travel-related coverage, while most comprehensive plans do. This benefit can be important for those traveling internationally as it may cover instances such as lost or stolen passports, travel delays, and border entry protection.
Why Lower Cost Plans Can Often Lead to Higher Costs
While a lower cost visitors insurance policy may be tempting, keep in mind that these plans often lead to paying much more out-of-pocket in the long run. The fixed costs for specific visits means you'll be responsible for all costs beyond the predefined fixed costs, which are often low. Limited insurance plans are considered the very basic of coverage and aren't suitable for all travelers.
For these reasons, it is highly recommended that visitors to the United States consider purchasing a comprehensive visitors insurance plan that will reduce your liability and lessen the risk associated with receiving healthcare in the U.S. where medical costs are extremely high.
Learn more about the differences between comprehensive and limited coverage visitors insurance plans and compare your options on VisitorsCoverage, the trusted online marketplace for U.S. visitors insurance plans.
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