If your clients are over 50, flush with home equity, and free to roam, chances are they’ve started considering a place to retire. As real estate values in popular U.S. retirement destinations soar, Americans are increasingly looking abroad and finding the welcome mat lain out in places such as Mexico, Panama, Nicaragua, Belize, and Honduras. The cost of living in these locations has always been low, but now there are government-sponsored relocation incentives — no taxes on income earned outside the host country and duty-free import of household goods — to help finance a new lifestyle replete with ocean sunsets, a relaxing pace, and local color. The chance to own a quarter-acre of beachfront property for less than $100,000 doesn’t hurt, either.

The result is a swelling migration of Americans, many from California, heading south to enjoy the promise of idyllic surroundings and an affordable lifestyle. According to the Association of Americans Resident Overseas, there are already more than 1 million Americans living in Mexico and over 100,000 more in Central America. But in the rush to invest and relocate, few are taking the proper steps to guard their health with the right health plans and services. Perhaps swayed by real estate developers’ spins that local doctors make house calls, answer their own phones, take time with their patients, and charge low fees, new arrivals often rely on the low stress and clean air as a powerful health tonic and expect their current health plan to adequately protect them.

Inevitably, however, reality sinks in. Your clients may be enjoying tax breaks and ocean breezes, but once they’re over 50, chronic conditions don’t disappear, and serious sickness and injury are increasingly probable. Important questions bubble up: Where did the local physicians go to medical school? How well do they speak English? What is the procedure for emergency evacuation? Is it a covered benefit with inside limits?

As their insurance agent, you need to be equipped to help these expatriates stay safe and healthy with the right plans and services. What are the best solutions? Traditional options have notable shortcomings, but there are international health plans that address these problems and are important to understand.

First, let’s take a look at some of the options retirees traditionally grasp, with an eye on their potential pitfalls. The table below highlights the shortcomings of six different types of insurance coverage that retirees might bring with them when they relocate. These alternatives bear little resemblance to each other and are often in place by default or taken out on short notice as stop-gap measures based on a word-of-mouth recommendation. Remember, of course, that Medicare does not cover any health services delivered outside the U.S.

In addition to those plans listed, there exist guaranteed issue plans for stints abroad of six months or less and medically underwritten major medical plans for those who relocate. So how do you find the right plan for your client? It starts with selecting a few basic parameters to help profile your retiree customer and to take the measure of all available health plans.

For your clients, you need to understand their travel patterns and their need for coverage while in the U.S:

  • Are they relocating for most or all of the year?
  • Did they keep a home in the U.S. that they regularly visit?
  • Do they travel frequently to other destinations outside or inside the U.S.?
  • Is anyone covered by Medicare or some other U.S. group plan?
  • Are they comfortable with stateside coverage featuring high deductibles and significant co-insurance?

Answers to these questions allow you to select plans with short or long-term travel benefits and with primary or secondary coverage.

On the product side, make sure you have done your usual homework to check the carriers’ pedigrees and then get a handle on how the plan measures up against these characteristics:

  • Duration of coverage outside the U.S.
  • Duration of coverage inside the U.S.
  • Breadth and depth of international medical services
  • Comprehensive coverage typical of major medical plans
  • Experience with international claims adjudication and processing

By paying attention to the basic fit between product and customer, you can reduce the options to a manageable few and concentrate on the quality of the international claims and medical assistance services.

As a final step in your due diligence, find out what kind of resources the plan can bring to bear in Mexico and Central America to promote prompt access to quality health care.

  • Is the plan contracted with carefully selected hospitals, doctors, and dentists?
  • Do the providers accept direct payment from the plan?
  • Are there good local or regional options for specialty care?
  • What is the contingency plan for emergency evacuation?
  • Are there translation databases for medical terms and phrases?

Building relationships and clear communications with the best local doctors and the plan’s international medical assistance staff are the key to a retiree’s peace of mind. Of course, paying international claims promptly and accurately is a major service, as well. What’s the claims shop’s track record? Don’t be afraid to ask these questions; the answers are too important.

Using this approach, you can help your retiree clients find the plan that will best meet their medical and financial needs when they relocate in their later years. If their current plans don’t fit the bill, know there are options for them should they need them – and the questions above can help you select a plan that could work for them.

Brendan Sharkey is director of individual products for HTH Worldwide. He can be reached at bsharkey@hthworldwide.com.

Table 1: Traditional Options

Type of Plan

Potential Pitfalls
Domestic U.S. Plan Out-of-network and pre-certification penalities
Lack of international medical assistance
Denials for unfamiliar standards of care
Low ability to process international claims
Local Domestic Plan

Financial weakness of carrier
Limits on benefits for service in U.S.
Lack of English-speaking member services staff
Inconsistent claims procedures
Lack of international medical assistance

Travel Health Limits on duration of trip
Limits on benefits for services in U.S.
Supplemental coverage only
Speciality plan Not admitted in U.S.: limited ability to appeal claims
Extensive exclusions and limitations
Limits on benefits for services in U.S.
Medicare Supp Little or no benefits outside U.S.
Lack of international medical assistance
Low ability to process international claims
Evacuation only No medical and surgical benefits
Unclear criteria for evacuation
Unclear evacuation contingency plan