Medicare For Expats, Or A Mess Of Pottage?
By Susan Beverley / Oct 09 • Categorized as Overseas Retirement •
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Healthy Retirement
The latest intelligent ‘guesstimate’ from the State Department suggests that there are roughly 5.25 million Americans citizens not affiliated with the US Government who are living abroad. Of this figure, an increasing number are US citizens who have made the bold decision to retire overseas. With the American economy going through an extended period of extreme negativity and the resultant effects that this has had on every citizen’s life, it is not surprising that increasing numbers of baby boomers want to leave the US behind and go in search of a better life abroad in their retirement.
One of the main obstacles restricting many who dream of an international retirement is the fact that Medicare coverage stops at the US border. A pensioner’s eligibility to any other form of health insurance abroad can be strictly limited and prohibitively expensive.
One of the most frequently asked questions at Escape Artist from American citizens who actively long for an overseas retirement is ‘does Medicare stretch beyond US borders for American retirees overseas?’ And unfortunately, in all but a few exceptionally limited cases, the answer is a resounding ‘no!’ However, that is absolutely not a reason to stop dreaming and even to stop actively planning your escape from America when you retire.
In this report we will detail how Medicare does offer (very limited) cover overseas, what your eligibility is to other forms of international health insurance cover, what the future holds in terms of changing policy on the health protection obligations of the government to Americans who choose to retire abroad, and how you can actually use the opportunity of a new life abroad as a chance to turn your life around for the better in terms of your long-term health prospects.
How Far Does Medicare’s Coverage Extend Beyond American Borders?
Medicare is a US based health ‘insurance’ solution for those over the age of 65. It is a system into which you have probably paid for the majority of your working life. Yet it is a system that becomes almost wholly useless to you if you decide to exercise your right to freedom of movement and move to live abroad in retirement. The only exceptions to Medicare’s rule of not offering coverage outside the US are as follows: -
1) You will most likely be covered for a medical emergency that arises as you’re en route through Canada and traveling the most direct route between the continental United States and Alaska.
2) If you’re in the United States when an emergency occurs and either a Canadian or a Mexican hospital is closer to you than any in the United States then Medicare should cover your expenses.
3) Finally, if your US based home is actually closer geographically to a Canadian or a Mexican hospital than to one in the United States then Medicare should again cover you.
None of these scenarios is ideal or suitable for an American citizen planning their retirement overseas – whether that is to Argentina or Mexico, Costa Rica or anywhere in Europe for example. Other issues that Americans can face with regard to Medicare are that whilst you are automatically included in Medicare Part A (for hospital coverage) at no cost to you, (assuming you have made sufficient payments towards the system during your working life), you have to sign up for the optional Part B cover (for doctors visits) during a narrow window of opportunity after turning 65. If you’re living abroad at the time and you fail to do so and instead sign up some time after this period you will be subject to permanently increased premiums (which are roughly an additional 10% for each year you could have signed up but did not).
Can You Get Health Insurance Abroad to Cover You in Retirement?
Most medical insurance companies local to a given nation or those that offer truly international coverage have an age related restriction on when they will stop offering new policies – the upper age limit is usually 75. Additionally, the older you get before you sign up for an insurance policy with a given provider, the higher your annual premiums will tend to be. This is because statistically speaking, the older we get the more expensive and long-term care and medical assistance we are likely to need. Therefore, anyone thinking about retiring abroad certainly needs to begin looking into the health insurance options available to them in their proposed new nation of residence as soon as possible.
If you have any pre-existing health conditions or you would like the additional benefits of having access to home help or residential care these may all be available but certainly for extra cost. Whilst you may initially be ‘comfortable’ with the thought of having to return to America if you fall ill and use your right to Medicare, that may not become practical over the longer-term. You will at the very least need some form of emergency insurance in your new country to ensure you will be treated in the event that some critical medical event arises.
There are two organizations to consider contacting to get more advice on insurance companies offering the most flexible and potentially suitable international medical insurance policies. They are American Citizens Abroad (http://www.aca.ch/joomla/index.php) and The Association of Americans Resident Abroad (http://aaro.org/). Additionally, there are companies based onshore in America that offer long-term insurance abroad, as well as international insurance companies that offer cover in multiple countries overseas. Finally you have the option of looking to a local insurance company in the country to where you move in order to find an affordable and nation appropriate and specific policy.
Will the Medicare Restrictions on Overseas Retirees Change in the Future?
Multiple organizations supporting American citizens resident abroad are actively campaigning for the Obama administration to consider extending Medicare’s reach beyond US borders – if only to Canada and Mexico. Simply because of the logistical and potential cost factors involved, few people in a position to offer expert comment are of the opinion that it will never be practicable to offer Medicare coverage to American citizens if they choose to retire abroad. If you want to join the debate and put your weight behind the campaign you will certainly be welcome, but you should not put your plans of retirement abroad on-hold waiting for policy to change.
What Can You Do to Help Yourself?
With the cold hard fact of the matter clearly identified – that is if you move abroad you’re on your own when it comes to affording health insurance or medical care – you have no real option other than to take it on the chin and move forward. As part of moving forward from this realization you may like to consider how a retirement abroad may actually benefit you and your long-term health anyway! It’s well known that the sunshine and warm weather has many positive aspects conducive to good health. After all, sunshine offers our bodies the vitamin D we need to absorb calcium properly for healthy bones, and warm dry air is perfect in the fight against the pain of arthritis and some chest complaints. Sunshine offers a feel-good factor as well and prevents us from feeling the blues seasonally. So if you’re thinking about retiring to the sun you may well be doing more for your own wellbeing than any amount of Medicare insurance could offer.
At the same time, if you escape the hectic pace of your current working life in America and the stresses of economic meltdown, potential terrorist attacks, increasing youth dissatisfaction, rising unemployment, falling house prices and the general malaise that all of this brings, you’re bound to immediately feel the positive health effects in your life. You can add to this feeling of well being because you will have more time in retirement to eat well and healthily, to source the best local ingredients from daily markets; you will be able to take exercise in the form of a walk along a local beach which is far better for you than running on a treadmill in a sweaty urban gym for 20 minutes three times a week. You’re more likely to have time for friends and family and this will do you good. You will have the choice to live in a healthier location with no air pollution perhaps. What’s more, away from the stresses and strains of your old life you will likely find a new zest and passion for life and with all the positive endorphins rushing around your system you will be helping yourself towards a happier and hopefully healthier retirement anyway.
I would like to get the straight scoop on Medical insurance in Panama. One book I read said that you can only sign up and get medical insurance up to age 64.
My wife and I are both 66 and are really interested in Panama but the age limit for being able to get insurance concerns me.
Does anyone know if this is true or if there are other options.
this is a discussion that i have been having – i am on medicare and have humana supplement – their response to overseas coverage is the following:
“Your Humana plan H1036-065 has International Coverage available for a premium of $29 a month. The countries this plan covers are: the Bahamas, Costa Rica, Dominican Republic, Guatemala, Mexico, and Panama.
You may complete an Abbreviated Enrollment Form over the phone thru customer service or you may opt to have this prefilled and mailed to you. Thank you for contacting Humana where it is our vision to be the most trusted name in health solutions. If you have further questions, please continue to use the MyCommunications Center or call our Customer Service Department at the number on the back of your ID card. Thank you,
Katrina C. Customer Service Web Specialist 800-457-4708 Humana Insurance Company”
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the following is a reply from someone else – the English is not up to par so…
“…..if he is in a HUMANA MEDICARE ADVANTAGE PLAN (Medicare HMO), they dont need to buy anything extra, the HMO will cover O/S Med Exp.; the catch is that they have o have a U.S. residence at least 6 mo. per year to be in a Medicare HMO.”
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the same person later sent this:
“…MEDICARE ADVANTAGE Plans (HMO’s) have a residency requirement….it s/b in your HUMANA Plan pamphlet
my parents, who live in Miami, have a MEDICARE HMO also, with VISTA, and they cover ALL OVERSEAS medical expenses (their pamphlet indictes “for emergencies only”, buy when I called, they said that they would cover most anything, as long as they are participants in their HMO, which has a CMS indicated residency requirement).
it is preferable for the MEDICARE HMO that their participants have overseas expenses covered, since these will be about 1/3 as much as stateside expenses…..they shouldn’t be charging an EXTRA premium when their claims are going t/b reduced considerably for overseas usage…..VISTA doesn’tcharge any kind of extra premium.”