What happens to my health insurance if I travel overseas?

Travelling overseas is an experience that broadens the mind while giving you an opportunity to explore new cultures and interesting places. But in the middle of all the excitement of planning your trip, you need to stop and think about what happens to your health insurance while you’re away.

While you can take out things like travel insurance to protect you while you’re away, what about your regular premium payments back home? Let’s tackle the nitty-gritty of how health insurance overseas and at home works so you can get back to what matters most: planning your holiday!

In most cases, your domestic health insurance policy won’t cover you for injuries, illnesses or hospital visits while you’re travelling overseas. In other words, it’s not a health insurance overseas solution. Australian health insurance is for medical expenses that happen within the country, which essentially leaves a gap in cover when you’re abroad. This means that if you get sick or have an accident while overseas, you’ll have to foot all the out-of-pocket costs for medical services yourself.

Bear in mind that some health insurance providers do offer limited international coverage or partner with health networks in other countries. But you’ll want to check directly with your insurer before jetting off so you are fully aware of the extent of your coverage. For the most comprehensive protection, make sure you look into buying travel insurance so you’re covered for emergencies, hospital stays, medical evacuations and more.

In most cases, yes!

If you plan to travel for an extended period, you might want to think about pausing your health insurance to save on premiums while you’re away. Many insurance providers in Australia allow their policyholders to suspend their cover for a set period – for some that might mean a month or two, right up to a couple of years. This can be really useful if you split your time between different countries and expect to stay overseas for an extended period. After all, who wants to keep paying for cover they can’t even use?

Before you decide to pause your health insurance, make sure you think about:

• Your eligibility: Not all policies can be suspended. Speak to your insurer to confirm if your current health policy is eligible for a pause.
• Length of the trip: Insurers have their own rules around the minimum and maximum time that you can pause your policy. In many cases the minimum is one month, and for some policies the maximum can be up to two years.
• Membership status: Pausing your policy doesn’t cancel your membership. You will still be a member of your health fund, but your cover and premium payments will be temporarily halted.
• Any pre-existing conditions: If you have a waiting period for a pre-existing condition, the time your policy is paused won’t count towards completing this period.
• Reactivation: When you return and reactivate your policy, it usually resumes under the same terms as before you paused it.

It depends on your current health insurance, as some providers are more flexible with pause lengths than others. However, in general it’s anywhere between one month and two years.

Pausing your health insurance means that while your cover and premium payments are put on hold, your membership stays active. This means you won’t lose any accumulated benefits or have to re-sit waiting periods you’ve already served. When you get back home and reactivate your policy, you’ll be able to pick up where you left off.

Do remember, however, that during the suspension period you won’t be able to claim any benefits. So you'll need to make alternative arrangements for health coverage while you're overseas. This is where travel insurance can come in really handy for medical emergencies and other travel-related issues.

Lifetime health cover (LHC) loading is an extra charge that’s applied to your health insurance premiums if you don’t take out hospital cover by 1 July following your 31st birthday. And pausing your health insurance can actually affect your LHC loading if you leave it too long. You can only be without cover for three years (i.e. no more than 1094 days) across your lifetime without being liable for extra loading. Pausing your policy for four years, for example, will mean one year is added to your LHC loading period – and you’ll have to foot that bill when you reactivate your policy.

Then there’s the Medicare levy surcharge (MLS) to consider. If you pause your health insurance, you won't be covered for the duration of the pause, which means you might be liable for the MLS. To avoid paying the surcharge you’ll need to make sure you have an appropriate level of private hospital cover for the entire financial year (or meet the criteria for exemption).

• Notify your insurer: Contact your health fund within 30 days of your return to tell them you are back home and want to resume your cover.
• Complete reinstatement application: Depending on your provider, you might need to fill out a reinstatement application to officially reactivate your health policy.
• Confirm payment details: See that your payment method and details are up to date. Make your next premium payment straight away to avoid any lapses in your cover.
• Provide travel evidence: Be prepared to provide your insurer with evidence of your travel dates, such as flight tickets or a copy of your passport.
• Resume benefits and cover: Once your policy is reactivated, your level of cover, benefits and waiting periods will be the same as they were before the pause. More importantly, you will be able to make claims again.

Having health insurance overseas is something you definitely need to get organised before you leave. But it’s just as important to take care of your domestic health insurance – especially if you want to save on premiums that will be automatically deducted if you don’t pause your policy.

Ultimately, whether you choose to hold on to your cover, pause it or rely on travel insurance solely, being prepared will give you peace of mind both during your travels and when you return home.