Health Insurance Before Medicare for Nomads in 2022
One of the biggest questions for Americans leaving the workforce before age 65 is health insurance coverage. In the US, a majority (70%) of employees are eligible to get health insurance through their employers. In addition, some are able to maintain coverage from their previous job once they retire. For many Americans, however, employer-provided health insurance is not an option. Either their employer does not offer it, they are self-employed, or they’e retired early and were not eligible for continued health insurance once they left the company.
At age 65, or if you are disabled before age 65, Medicare becomes available for most Americans, providing health insurance. In addition, if your income falls below a certain amount or if you meet several other criteria, you may be eligible for Medicaid.
“No, your health insurance is not accepted here.”
(📷 from our travels in Spain.)
But what if you step away from W2 employment before the traditional retirement age of 65? If you are temporarily or permanently leaving the W2 life—either for a sabbatical, to pursue self-employment, or through early retirement—you’ll need to purchase health insurance. While some are fortunate to have coverage through a spouse, partner, or parent on their employer insurance plan, many self-employed Americans purchase health insurance on the market themselves or through a broker.
One of the critical things to consider when choosing insurance is where you will potentially need to use your health insurance. Nearly all policies have limitations on where coverage is provided, and some are very restricted. So, once you add international travel to the mix, the health insurance landscape gets more complex. However, (spoiler alert), staying outside the US for part of the year can reduce the cost of health insurance premiums by thousands (and potentially tens of thousands) of dollars per year. Being flexible and leaving the US for more than half the year reduces your cost of living significantly. This opens up the world of health care geo arbitrage, or medical tourism, to reduce the cost of many procedures.
Most articles on health insurance before Medicare eligibility cover a laundry list of insurance providers and not actual user stories. But we’re not affiliated with any health insurance companies or endorsing one company over another. Instead, we’re simply sharing our actual experience in 2022, selecting health insurance for our mid-life nomadic travels.
What We Pay for Health Insurance as Middle-Aged Nomads
There are so many options available regarding coverage levels and deductible amounts. Before we got our coverage, we had an hour long phone interview with a Cigna representative to customize our coverage. We started this process three months before our 2021 insurance expired so we’d have plenty of time to digest information and decide which plan and options would work best for 2022.
We selected the Cigna Global Gold plan with a $7,500 deductible per person, $2M coverage, repatriation, emergency evacuation, and a wellness plan (aka, annual physical). When setting up this kind of international policy, one must provide an address outside their “home” country as “their international address.” Since we are nomads living in many places throughout the year (primarily in AirBnbs and the like), we selected a location in Portugal we had already reserved and expected to stay a portion of the year.
We (49-year-old male, 47-year-old female) with no pre-existing conditions pay a little over $500 per month for our health insurance premiums in 2022. For reference, this is less than half the cost of the Blue Cross Blue Shield policy that we had in 2021 (without ACA subsidy) which provided similar levels of coverage but ONLY in North Carolina. With this international plan, we have coverage both inside the US and worldwide. One major caveat: we are limited to a maximum of 6 months that we are allowed to stay within the United States each year. Ah, shucks, you mean we have to leave to go see exciting international destinations for at least half the year? Well, OK then, if we must go, we will!
Our Best Piece of Advice for Health Insurance After Stopping Working
Don’t listen to your negative friends. Don’t doom-scroll on Reddit. Don’t let a family member tell you you are crazy to walk away from a job because you “need the insurance.” There are many options out there, and yes, they will cost money, but that doesn’t mean they’re out of the question.
Many W2 employees will be presented with an opportunity to continue COBRA health insurance coverage via their old employer for 6 to 18 months when they leave the job. These plans may not be the best coverage or deal out there; hence, we recommend talking to a health insurance broker before signing on the dotted line. From our experience, COBRA coverage was more expensive than what we could buy privately (not even compared to the international insurance we now have). We’ve heard similar costs from friends as well. It’s a good idea to shop around. But you don’t need to do this on your own!
So, here’s our best advice: Visit or call a Health Insurance Broker!
Oh, and visit the broker before you quit so that you have 4-12 weeks to dig through the information overload. Trust me, there will be information overload!
So, simply visit a health insurance broker in your city or county and have them walk through all your options for your specific situation. You don’t need to make a purchase from a broker simply because they walked you through the options. The purpose of this experience is to make you an informed consumer. You can decide for yourself after the consultation.
If you use the broker and do choose to buy a plan through them, the insurance will not cost you more than if you did all the groundwork yourself on the internet. These insurance brokers get paid a commission built into the price of the health insurance product. And of course, they get paid additional commissions for any other insurance you might get from them, such as home, auto, renters, umbrella, etc.
Look for a broker through an insurance agent (home, rent, auto) you are already happy with. Or, ask a friend who is an entrepreneur, as they may have a broker they’ve used for their coverage. Remember that you do not need to work through a broker each year. In most cases, if you’re happy with your policy, you’ll simply renew it each year, and there’s no need to contact the broker again.
In our journey of obtaining health insurance after W2 life, we found that a lot of information online was outdated or incorrect. The broker we chose to work with was much more up-to-date on coverage options than what we were finding online. In 2021, when we were living in North Carolina and not traveling much (nor was the rest of the world due to the pandemic), we chose the Blue Cross Blue Shield Bronze ACA plan. When we became nomadic, we switched our policy.
Why We Didn’t We Use an ACA Plan in 2022
Tripping hazard we encountered during our international travel, on the Camino de Santiago.
We used a Blue Cross Blue Shield high deductible plan in 2021. We liked that our plan allowed us to see our current doctors in North Carolina. However, when we traveled outside of North Carolina in 2021, we were only covered for life-threatening accidents, like car accidents. This made us a little anxious about not having a lot of health insurance coverage as we visited family in other states. For example, if we contracted the flu or other serious illness while visiting out-of-state family, we would likely be out-of-network. This amount of coverage was not suitable for our upcoming nomadic international travels.
One option for travelers is to add travel insurance. These policies typically are limited to short trips and are supplemental to one’s primary health insurance, not “instead of” primary insurance. For our overseas travel in Q4 2021, we added an international travel health insurance on top of our Blue Cross Blue Shield ACA plan to ensure that we would be medically covered while hiking the Camino de Santiago and touring Portugal.
One of the reasons we left the workforce early was to do Roth Conversions and start paying taxes on our 401k monies before traditional retirement age. Roth Conversions are considered taxable income and, depending on how much is converted in a given year, may reduce or eliminate any ACA health insurance premium subsidy. For example, in our case, without ACA subsidy, our premium for the Blue Cross Blue Shield policy would be over $1,200 per month (or about $15,000 per year).
Where Does the Cigna Gold Health Insurance Cover Us?
The Cigna Gold plan covers us in the US for up to 6 months per year, which means we get to travel internationally the other 6 months—a pretty good deal for a couple of nomads!
Through this plan, we are not limited to coverage in a U.S. county or state like most ACA plans. The Cigna Gold plan also covers us outside the USA.
What Does the Health Insurance Not Cover
Our plan does not cover us if we are in a war zone, and it does not cover contraceptives or in-home nursing. For a complete list of coverage, visit Cigna.
Can I Contribute to an HSA With An International Health Insurance Plan?
For 2022, Cigna offers plans with deductible limits of $0 / $375 / $750 / $1,500 / $3,000 / $7,500 / $10,000. We chose the plan with $7,500 deductible to stay within the HSA guidelines for a high deductible health care plan.
If you want to contribute to your HSA the year you chose international health insurance, make sure to pick a plan that makes you eligible to contribute. Check with your accountant if you are unclear on any of this.
What Other Companies Sell Health Insurance to Middle-Aged Nomads?
Besides Cigna, there are other health insurance providers that sell products fitting the niche of the self-employed or unemployed nomads traveling outside the US. These companies include IMG Global and GeoBlue.
Check out this YouTube vlog, Go With Less, to know more about a very active online community discussing this topic:
How Can I Save Up To 90% on Health Insurance Premiums?
To save 90% on premiums, you can leave the US and purchase private health insurance from the country you reside outside the US for 11 months per year.
Or, you can purchase a Global Health Insurance Plan and travel between several countries, staying out of war zones and out of the US for 11 months per year.
How Can I Save Up To 50% on Health Insurance Premiums?
To save 50%, leave the US and purchase a Global Health Insurance Plan and travel between several countries, staying out of war zones and out of the US for 6 months per year.
How Much Should I Plan to Spend on Health Insurance if I Stop Working?
Once you have visited a broker and found a plan you like, you’ll want to calculate how many years you will need to cover your health insurance costs as an international nomad.
We calculated that we would need to plan $300,000 to $350,000 for health insurance between ages 45 and 65 as nomads spending three to 6 months in the US each year. For comparison, health insurance in the open market for residing in the US during the same time frame would be $675,000 to $750,000. We calculated these costs by taking our current year’s premiums for the Cigna Global Gold plan and adding 10% inflation per year over 20 years since health insurance premiums tend to rise faster than inflation. We did the same math for within-US coverage, adding 10% inflation per year over 20 years.
In reality, health insurance cost is a year-by-year decision for those stepping away from W2 employment, with some years utilizing a global health insurance plan and some years using ACA. Alternatively, some people take a year off of international travel and work a job that provides health care for a year or two before resuming slow nomadic living.
What is the Process for Pre-Approval and Claims Process Like?
In April 2022, we visited our primary care physicians in North Carolina for our annual exams. We had verified that they were in-network when signing up for the Cigna Global Gold plan.
A couple of days before our visit, we called Cigna (the help center for these plans is in Scotland), and they not only confirmed our doctors were still in-network, they also emailed us a pre-approval letter.
After our primary care physician visits, we have some follow-up appointments, which are now in progress. So, in the coming weeks, we will come back to this blog and update our experience.
Would You Keep on an International Health Insurance Plan Going Forward?
Yes. After our experiences so far, we will keep using this type of global plan for our health insurance. Here’s why:
Lower premiums
Choice of almost any doctor in the Cigna network within the US and around the world, excluding war zones
Eligibility for annual HSA contributions
Ability to select physicians throughout the US
Responsive and knowledgeable customer service
We look forward to updating you on the claims process as well as 2023 health insurance coverage selection.
We hope this helped you in your own search for health insurance before Medicare!
