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Saturday January 20 2018
Admitted Health Insurance?

Alex Routh

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Almost all insurance policies are admitted. That means companies are licensed and registered in the place where they sell policies. For example, if you buy car insurance for a Mexican car, you would have to buy it from a Mexican car insurer. You couldn’t buy it from an American provider.

Almost all health insurance policies are admitted as well. In Mexico you could buy one from a local broker. If you were living in the USA, insurers are admitted in every State, which is why Blue Cross for example, is separately incorporated in almost all States. Every State has laws prohibiting non-admitted outside insurers, selling to their residents. Indeed, the USA for insurance purposes is like 50 separate countries. US medical insurers, in order to prevent other State regulators from fining them, have rules limiting your cover if you are not resident in that home State for 6 months per year. If they limit cover in this way, then they can make the argument to other State regulators that they are not insuring people in other States, and thus avoid million dollar fines and regulatory scrutiny.

So between countries and US States, there are barriers to portability of insurance policies caused by regulation and sovereignty. This can be avoided in the case of a car since you can import the car, and license it in the new country, or sell the one car and buy a new one if you move. For health insurance, when you live in two jurisdictions like Mexico and the USA, or live in one and want to return for medical treatment to the other, things become difficult. A Mexican policy would not let you return to the USA for treatment and force you to buy travel insurance when on a trip home. The catch is you generally can’t buy travel insurance to travel in your home country! US domestic policies restrict your time in other jurisdictions, have residency requirements, or limit the benefits abroad and are expensive! What can you do?

You can consider an international non-admitted health insurance policy. There are about 30 products, mostly British, but about 5 specialty American providers. The big names Blue Cross and Aetna, are generally only interested in group plans for American employee groups abroad. The US industry for individuals got its start insuring tens of thousands of missionaries. Every church sponsors 2 or 3 missionaries, which makes a lot of bodies needing international medical insurance. On the back of this missionary business there are good inexpensive solutions allowing you full cover in Mexico (or anywhere you want) and return access for treatment to US hospitals. For the American providers the catch is you must have a residential address outside if the USA and you must live outside of the USA for 6 months per year cumulatively. So you can have international portable health insurance and the best of both worlds.

Cabo residents should consider one of these policies not only because they are cheaper than a domestic US policy, but also because they are really international and allow you to live outside the USA.


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