Reimbursement vs. Direct Pay

There are two travel insurance models on the market. Most people find out which one they bought when it is too late to switch.

The Reimbursement Model

You travel. You get sick. You go to the hospital. You pay. You keep every receipt. You fly home. You fill in the claim form. You wait for the review — 30 to 90 days on average. You find out how much will be reimbursed.

That is the reimbursement model. It is the default model of most travel insurers worldwide. The practical problem: For a US$40,000 hospitalization in the USA (a simple appendicitis), you need US$40,000 available on the spot. Not later — now, before you leave the hospital.

Few travelers have that kind of reserve. Those who do not end up in one of two situations: declining treatment or taking on debt abroad.

The Direct-Pay Model

You travel. You get sick. You call your insurer. The TPA contacts the hospital. The TPA issues a payment guarantee. You receive treatment. You walk out of the hospital without paying.

That is the direct-pay model. It is the Asteroid model, operated by MDabroad. The practical difference: You do not need US$40,000 on hand. You do not need a high-limit credit card. You do not need an emergency loan. You do not need to wait 90 days to be reimbursed.

How to Tell Which Model You Are Buying

Insurers rarely advertise "reimbursement model" explicitly. The phrases that give it away: Reimbursement: - "Keep all your receipts"

- "Submit documentation when you return"

- "Review period of X days"

- "Reimbursement within Y business days" Direct pay: - "Call before seeking care"

- "Our team coordinates with the hospital"

- "We issue a payment guarantee"

- "Accredited network with direct payment"

Ask directly before you buy: "If I am hospitalized in the USA tomorrow, who pays the hospital — me or you?"

The Real Cost of the Wrong Model

Scenario 1 — Reimbursement: A US$52,000 hospitalization in Miami (appendicitis + 3 days). You pay by credit card. Interest accrues while you wait for reimbursement (45 days). Added interest cost: around US$7,400. Scenario 2 — Direct pay (Asteroid/MDabroad): Same hospitalization. MDabroad calls the hospital, issues the guarantee, coordinates the case. You leave without paying anything. Zero added cost.

The price difference between the two plans for a week in the USA: USD 6-15. The difference when you actually need it: potentially tens of thousands of dollars in interest, stress and drained savings.

Why More Insurers Don't Do Direct Pay

Direct pay requires real infrastructure: hospital relationships, a specialized TPA, the authority to issue financial guarantees, a 24/7 operation. That costs money and is hard to scale.

It is cheaper (for the insurer) to sell a reimbursement product and transfer the cash-advance risk to the insured.

MDabroad built that infrastructure over years of operating as a TPA for major international insurers. Asteroid is the first consumer product built on that foundation.

FAQ

Does direct pay cover any hospital? Within the MDabroad accredited network (162 countries), yes — the hospital receives the guarantee directly. In destinations outside the network, paying and being reimbursed may be necessary. Asteroid advises before your trip on coverage at your specific destination. What if the hospital does not accept the guarantee? In developed markets where hospitals know MDabroad, acceptance is standard. In exceptional cases, MDabroad negotiates directly — and if reimbursement is needed, the TPA has already collected the documentation. Is reimbursement insurance always worse? Not necessarily — but the difference matters most when the bills are big. For a US$200 consultation, reimbursement is fine. For US$50,000, it is a matter of financial survival.

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