Major Health Insurer to Cover Medical Procedures Abroad

A major health insurer, WellPoint, Inc., will kick off a pilot program in January of 2009 that will offer “medical tourism” as a part of its benefits packages. The program will allow patients to travel to India for certain surgical procedures and reimburse them for getting medical care overseas.

A self-funded, Wisconsin-based specialty graphics business called Serigraph employs WellPoint to manage the company benefits. For purposes of the pilot program, Serigraph will waive co-pays and coinsurance for any of their 650 employees to fly to India for certain non-emergency medical procedures such as major joint replacement and upper and lower back fusion. In addition, Serigraph will pay for all travel expenses for the employee as well as a companion.

More and more U.S. patients are traveling abroad for major medical care. In 2007, approximately 750,000 Americans traveled outside the U.S. for their care with most doing so at their own expense.

The number of U.S. citizens who participate in medical travel is expected to increase to 1.5 million for 2008. Over the next 10 years, projections are that the number of patients traveling to other countries for medical care could reach 16 million annually.

As medical travel grows, it is only logical to assume that more companies will look to foreign countries for at least part of their employee health care. This surge in medical outsourcing is a development that is very likely to create even more tension between insurers and healthcare providers over the issue of reimbursement rates.

So, why travel elsewhere for what can be done close to home? According to WellPoint spokeswoman, Kristin Binns, one very good reason is that a joint replacement surgery that costs between $60,000 and $70,000 within the United States can be done in India for $8,000 to $10,000. Therefore, a company such as Serigraph can pay to send an employee to an upscale tourist hospital in India, waive all the co-pays and coinsurance and still save money.

Binns also said that patients are “entitled to all rights and remedies available under applicable law.” when questioned about the legal recourse a patient would have if unsatisfied with the surgical outcome. However, she did not specify which nation's laws would apply.

For many, medical tourism can be of great benefit. According to Dr. Razia Hashmi, chief medical officer of Anthem National Accounts for WellPoint, “It allows the customers to have choice.” He further noted, “Certainly, the cost difference is striking enough for some procedures.”

On the downside, a trip to India could take 20 hours. This means that only patients who are otherwise healthy would be able to travel such great distances to receive care. Many patients may be unable to benefit from the coverage and could actually suffer consequences of an increase in costs when they have no alternative to getting their care close to home.

WellPoint reports that the Joint Commission International accredits the hospitals in India that the insurer is working with. The company also maintains that the test program complies with the American Medical Association's guidelines for medical tourism.

Meanwhile, the medical insurance industry will be keenly focused on the results of Wellpoint’s pilot program, as they will play a key role in the future of medical tourism for other major insurers. Wellpoint is the second largest insurer in the United States providing health coverage for about 35 million people.

Only a small number of insurance companies have adopted the concept of medical tourism thus far. Blue Cross and Blue Shield of South Carolina provides for overseas care through Companion Global Healthcare. Another major insurer, Aetna Inc., started a pilot program for medical tourism this year. Other companies, including Cigna Corp. and United Health Group, Inc. are also looking into medical tourism’s possibilities.