For persons visiting the U.S., there are two major types of visitors' insurance plans:
- Fixed Coverage Plans: Limited coverage, least expensive at purchase
- Comprehensive Coverage Plans: Better coverage, more expensive at purchase
People often wonder what kind of insurance they should purchase. Our advice: Always purchase comprehensive coverage plans, and never the fixed coverage plans.
Travelers often find comprehensive coverage plans too expensive (which are actually very reasonably priced) and fixed coverage plans very attractive. Visitors to the U.S. are unaware of the expensive healthcare costs and usually do not understand the limitations of the fixed coverage plans to provide adequate coverage. Many fixed coverage buyers realize their mistake in purchasing a fixed coverage plan only after the expense is incurred.
My father is quite healthy but my mother gets sick frequently. Should I buy a fixed coverage plan for my father and a comprehensive coverage plan for my mother?
No, that is not a wise decision. If someone has a pre-existing condition, the insurance company will not cover their treatment. However, some plans will cover the acute onset of pre-existing conditions, there are no plans available on the market that will cover maintenance of pre-existing conditions for visitors. For any given age, the probability of someone being treated for a new medical condition is the same and therefore everyone pays the same premium. The difference between fixed and comprehensive coverage is the amount that is covered by the insurance company when a new medical condition arises. We always recommend that everyone purchase comprehensive coverage plans.
Acute Onset of Pre-Existing Conditions FAQRead Article
Pre-Existing Medical Conditions FAQRead Article
Can I first purchase a fixed coverage plan so that it is cheaper and later upgrade it to a comprehensive coverage plan if I need to?
No, you are not allowed to make changes to an insurance plan after the effective date. You would have to cancel the current plan and purchase a completely new plan as if you had never purchased the first insurance plan. Even if the new comprehensive coverage plan is from the same company as the old fixed coverage plan, all of the terms and conditions start over again, such as the pre-existing conditions exclusion, deductible and co-insurance.
The insurance companies will pay for new medical conditions that occur after the effective date of the current policy. Otherwise, everyone would first purchase the fixed coverage plan which is cheaper, and as soon as someone gets sick, upgrade it to the comprehensive coverage plan. In other words, if you cancel the fixed coverage plan and purchase a comprehensive coverage plan once you become sick or injured, the comprehensive plan would consider that condition to be a pre-existing condition and not cover it. You would then lose the limited coverage you did have under the fixed coverage plan.
Individual coverage limits in the fixed coverage plan look quite reasonable to me and I think they should be sufficient if my parents get sick or injured. Why should I unnecessarily spend more money on a comprehensive coverage plan?
If something were to happen to your parents, the comprehensive plans are designed to cover more of the expense compared to the fixed coverage plans. In actuality, you would be spending unnecessary money on a fixed coverage plan because of the limited coverage they offer.
Medical treatment in the U.S. is very expensive. For example, if you purchased a $50,000 fixed coverage plan, the insurance company will only pay $330 for an emergency room visit and $3300 towards a surgery. If an emergency room visit costs $2,000 or $3,000, you have to pay the difference beyond $330. If a surgery costs $30,000 or $40,000, you would have to pay the difference beyond $3,300.
Often times people do not understand what a $50,000 policy maximum really means in regards to a fixed coverage plan. $50,000 is the overall maximum limit once individual limits are all combined. E.g., $1,400/day, 30 days maximum for hospital room and board, i.e., $1,400 x 30 = $42,000; additional $660/day for ICU, 8 days max, i.e., $660 x 8 = $5,280. If you combine all the individual limits, the total of all those limits would be covered up to the maximum $50,000. It does not mean that after you pay the deductible, the insurance company will pay everything.
I bought the fixed coverage plan with $0 deductible. In that case, why do I have to pay anything? Why doesn't the insurance company pay everything?
The deductible is the amount you must pay before the insurance company starts paying anything. After you pay the deductible, the amount paid is based on the plan you purchased. In the case of fixed coverage plans, payment goes according to the schedule of benefits based on a given policy maximum.
If you chose a $50 deductible, and satisfied that deductible, the plan will pay according to the schedule of benefits. On the other hand, if you chose a $0 deductible, it will start paying according to the schedule of benefits immediately. Keep in mind that the schedule of benefits remains the same regardless of the chosen deductible.
By recommending comprehensive coverage plans that cost more, are you trying to upsell so that you can make more money?
Absolutely not. We recommend comprehensive plans because of the benefits offered. All the information we provide on the coverage and benefits of various plans are provided to you before you decide to purchase something. When you compare the comprehensive and fixed coverage plans, you will see that the comprehensive plans provide better coverage. There is never any upselling or cross selling done at Insubuy. We leave the decision entirely up to you.
What type of insurance do most people purchase for their parents visiting the USA? Do they buy a fixed coverage plan or a comprehensive coverage plan?
More and more people are choosing comprehensive coverage plans, as those plans provide you with better coverage and limit your out of pocket maximum liability.
Does it mean that fixed coverage plans are not good? Does it mean they are bad products?
No, they are not bad products. Fixed coverage plans pay fixed amounts as per the schedule of benefits and as those amounts are much lower than actual medical expenses in the U.S., they result in inadequate coverage. However, for the amount of premium that is being charged, the coverage is still good.
If a fixed coverage plan is so insufficient, why do insurance companies even offer them? Why do such products even exist?
Such products exist simply because many customers want a less expensive insurance option. Insurance companies can only provide limited coverage for the amount of premium charged.
Furthermore, U.S. based companies offer fixed coverage plans primarily to compete with many foreign based insurance companies (especially in India) that only offer fixed coverage plans for persons older than 55 years (some even above 50 years) of age.
How does Insubuy educate potential customers about the dangers of purchasing fixed coverage plans and advise them to purchase comprehensive coverage plans?
At Insubuy, we do everything possible to educate our customers and then we leave it up to them to decide. This article was written to explain the risks of purchasing fixed coverage plans to help educate our customers.
Around 15 years ago, Insubuy was the first company in the U.S. market to clearly define the two types of visitor insurance plans: fixed and comprehensive coverage. We were also the first company to make two clearly marked sections on our website indicating 'Fixed Coverage Plans' and 'Comprehensive Coverage Plans' so that people know very clearly that if one plan costs $400 and the other one is $1,300, what the major differences between the two types of plans are. Before that, everything was called 'travel medical insurance' or 'visitors insurance' and it was very difficult to figure out what you were purchasing and the differences between them.
When you search for quotes on Insubuy or if you select 'View All Plans', we have provided a high level summary of how each plan works. For fixed coverage plans, it states "After deductible, pays fixed amounts as per schedule of benefits." If you then click on the 'Schedule of Benefits' link you can learn how much the plan pays. For comprehensive plans, it says something to the effect of, "After deductible, pays 80% to $5,000, then 100% to policy maximum" or something slightly different depending on the plan.
You can compare several plans side by side in great detail and compare the differences between the fixed and comprehensive coverage plans. For fixed coverage plans, it shows exactly how much the insurance plan will pay for any given medical procedure. You will also see a link that states, 'How Plan Works,' which will explain the limited benefits of fixed coverage plans. Right below 'How Plan Works' there is a link for a 'Brochure' that tells you in more detail how the plan works and how much it will pay.
For the customers who call our office or send questions via email, we verbally explain the differences as well as write them in email replies. We routinely write on discussion forums and on review websites in order to inform our customers every chance we get.
Additionally, some of the insurance companies ask you to check a box in the online application signifying your agreement and acknowledgment that such insurance plans offer limited benefits. e.g., Inbound USA, Inbound Guest. You are not able to go further with your purchase until you have checked the box which provides you with another opportunity to reconsider the purchase of a fixed coverage plan. After you have finalized your purchase you will receive policy documents, the certificate wording is included in these documents and it will provide you with detailed information on how the plan works.
I understand that I made the mistake by purchasing a fixed coverage plan and now that I have a claim, I am left with large medical bills. Is there any way to obtain additional payment from the insurance company, as I do not have the money to pay these bills? Can you make an exception?
No. The insurance company will only pay according the schedule of benefits mentioned in the certificate wording and nothing additional. Any cost above the amount specified in the schedule of benefits is your responsibility. It is up to you on how you would like to handle the difference between the covered amounts and your portion of the medical expense. You will need to discuss this directly with the providers.
I am not satisfied with the way that a fixed coverage plan works and I am in no way going to pay big medical bills. I am going to file complaints, write bad reviews about such insurance plans or file a lawsuit against the insurance company for selling me such a useless plan.
Please understand, if a fixed coverage policy is purchased, it is only going to pay as specified. Insurance companies are in no way obligated to pay more than what is written in their certificate wording which was provided to you.
Insubuy tries to look into and resolve or assist with any complaints or posted concerns that are legitimate. Insubuy is not involved in the processing of your claim. We offer claims assistance if a claim is denied and there are questions or discrepancies regarding the denial. Writing an unrealistic and negative review would not be fair to the insurance company, broker or administrators unless the process of a claim was unfair based on what is noted in the plans certificate wording. Our goal is to assist our customers to the best of our abilities and we strived to do so from the beginning.