"We have all read that a med evac/helicopter or boat pickup from a cruise ship can cost upwards of $25,000. When the US Coast Guard is involved, they don't charge anything for air/sea rescues. Why does it cost so much and who is actually levying these astronomical charges?"
This is an excellent question from an InsureMyTrip customer. We'd like to share what we know about medical evacuation costs, to clear up the mystery of why travel insurance products for medical evacuation are so important to have.
The short answer is that while our customer is correct in saying that the Coast Guard does not levy any charges for air or sea rescues, the Coast Guard is not always involved in medical evacuations from cruise ships. The Coast Guard may be contacted if the ship happened to be within U.S. waters; outside of U.S. waters, jurisdiction changes, and the Coast Guard as a U.S. military entity would likely not be the resource called upon to perform the evacuation. Also, while it's common to imagine that "evacuation" from a cruise ship means being airlifted in a helicopter hovering over the deck of the ship while out in open waters, that's not necessarily the case. Unless your medical emergency is so dire and life-threatening that there is no time to spare in getting you to a port, the medical evacuation operations would more likely take place from the nearest port of call. In that case, whether by helicopter or ambulance, you would be transferred to the care of a specialized medical evacuation company, not the Coast Guard. The seemingly "astronomical" fees charged by these companies cover a number of things, but if you think of it as, essentially, a privately chartered flight or ambulance with the benefit of expensive life-saving equipment and highly skilled, trained pilots and medical professionals, the cost may begin to make sense. Also, for the sake of perspective, while the Coast Guard does not actually bill anyone for the rescues they perform, the costs of their operations are absorbed by American taxpayers. A Coast Guard rescue is not cheaper than an air ambulance rescue; it's just paid for by a lot more people, who never really see the bill.
Of course, beyond the question of whether or not upwards of $25,000 for a medical evacuation that COULD be offered for free by the Coast Guard is a reasonable charge, there's the question of how to avoid paying for such a charge if you happened to be unlucky enough to receive that kind of a bill. Travel insurance can offer not only coverage for the costs of emergency evacuation from your cruise ship, but also valuable additional benefits such as Hospital of Choice (allowing you to request transport to a particular medical facility, if at all possible) and comprehensive travel medical coverage that could assist you with the costs of your care, whether on board the ship or at a hospital elsewhere. In other words, rather than worry about the possibility of being stuck with a $25,000 bill, it might be wise to look into investing a much smaller sum of money in a policy that could eliminate your responsibility for that bill altogether.