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How to Plan for Health Care When Retiring Abroad

If your clients are thinking of retiring outside the United States, they’re not alone. According to the Social Security Administration (SSA), more than 500,000 people receive benefits while living in other countries, and the vast majority are retired workers.

In this context, “outside” the United States means any destinations except the 50 states, District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands and American Samoa.

Although these expats receive SSA payments, Medicare does not reimburse them for health care services they receive in their new countries. Many people relocate internationally to take advantage of a lower cost of living and stretch their retirement dollars. How can retirees live in their dream retirement location while protecting both their health and financial assets?

There are many factors to consider before moving outside the U.S., explains Tiffany Benigni, director of LifePlan 20/20 Financial Planning Services at Pittsburgh-based D.B. Root & Company.

“Retirees on Medicare will face some complications,” says Benigni. “Medicare doesn't cover doctor and hospital charges in foreign countries. And most Medicare supplement polices that cover foreign travel — and all do — provide it for only 60 days.”

Individuals should sign up for Medicare Part A, however, even if they plan to move out of the country. The sign-up period is a seven-month window that begins three months before the enrollee turns 65.

Retirees pay no fee for Medicare Part A, which covers inpatient hospital stays, care in a skilled nursing facility, hospice care and some home health care. If they return to the U.S., either temporarily or permanently, they receive these services from a provider that accepts Medicare payment (most do).

While living outside the country, retirees have three options: “to get a private policy — not a Medicare Supplement — buy into a national program in the foreign country if available or self-insure,” says Benigni.

The U.S. Department of State offers information on a wide range of topics related to accessing and paying for health care in countries around the globe. The agency’s website includes a list of insurance companies that reimburse for medical treatment received outside of the United States.

They also list companies that cover medical evacuation. These policies pay the fees when individuals need to be transported by helicopter, plane or vehicle from a remote location—including a cruise ship. “Air ambulance” services can cost up to $100,000.

The government site also includes a comprehensive database that users can search to learn details about the quality of health care in their country of choice. In Panama, for example, the larger cities have excellent hospitals, but poor road conditions can make ambulance response times very slow in the outskirts. In Costa Rica, most prescription and over-the-counter medications are easy to find, but some expats regularly travel back to the U.S. to fill less-common prescriptions. Retirees in France will find a quality of care on par with U.S. standards, but will likely be required to pay for any non-emergency medical care up front.

The bottom line: Whether your clients retire domestically or in another country, they’ll need to plan for getting and paying for the medical services to help them enjoy those post-work years. 

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