4 Ways Expats Can Cover Healthcare Costs When Medicare Isn't an Option

senior man paying doctor in foreign currency

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It’s a sad fact that Medicare benefits can’t be used outside the U.S.

Lots of people would like that to change, and some countries are actually improving their health care infrastructures in anticipation of U.S. Medicare recipients being able to use their benefits abroad at qualified facilities…someday…maybe.

But until that day comes, those who retire overseas can’t count on using Medicare to pay for their health care expenses. They can continue to pay into the system and keep their Medicare coverage active so it’s there for them if they ever decide to move back or return home for treatment.

There are a few exceptions: if the nearest foreign hospital is closer than the nearest U.S. hospital where you are having a medical emergency or you're on a cruise ship that is no more than 6 hours away from the U.S., Medicare will likely provide benefits. Last, if you are traveling through Canada between Alaska and another state and a Canadian hospital is closer than the nearest U.S. hospital for treating your illness or injury.

Options for Covering Healthcare Expenses as a Retired U.S. Expat Living Abroad

If you don't fall into one of these exceptions but want to retire abroad, there are still some very affordable health care alternatives in other countries. Here are four primary health care options for retirees living overseas in places where Medicare can't be used.

Opt for a National Health Plan

Almost every country outside the U.S. has some sort of national health plan that offers universal coverage, including coverage for foreigners with residence visas. These plans vary widely in cost and quality from country to country.

They have all the pluses and minuses of socialized medicine, and in very poor countries those minuses are magnified the farther you are from a major metropolitan area…the quality of staff and facilities falls off sharply outside the big cities. But all offer at least a basic health care safety net, and in places like San José, Costa Rica; Quito, Ecuador; Merida and Puerto Vallarta, Mexico; as well as in other major cities, staff, and facilities at public hospitals are excellent, and many resident expats take advantage of these.

Get Covered by a Private Health Plan

Almost every country outside the U.S. also has a private health care system that operates alongside the public system. Doctors participate in the public system, but also have private practices and operate their own private specialization clinics. Services at these facilities are covered by local private insurance policies.

Private insurance companies in popular expat countries work much the same as private insurance companies in the U.S. and provide the same types of plans and coverage, but at dramatically lower costs due to the generally lower cost of medical care outside the U.S.

Many hospital systems will also offer hospital-based discount plans. For very reasonable discounted prices at specific hospitals and clinics, expats and locals alike can receive all their medical services. These facilities are often the best in the country, and some are affiliated with U.S. hospitals and have ISO ratings and international certifications. Again, in the major metropolitan areas of most countries, it’s not hard to find medical care that’s the equal of anything available in the United States.

Sign Up for International Health Insurance

Another option is an international insurance policy that provides coverage in a number of countries or on a global basis. This is an option for expats who travel a lot or anticipate changing their locations often enough to make the higher premiums worthwhile.

Premiums are higher than private insurance in particular countries but can still be significantly less than monthly premiums for private insurance in the U.S.

Pay Out-of-Pocket

There is always the option to simply pay out-of-pocket for medical services in other countries. This is something that can be cost prohibitive in the U.S. but affordable in other places. Many common medical procedures such as hip replacements, pacemaker implants, cataract surgery, etc., along with dental procedures and cosmetic procedures of almost every kind can cost half or less what they do in the United States. This makes it affordable to simply pay with cash or a credit card.

Health care in most popular overseas retirement destinations features a variation on the above themes, and everyone’s individual health care needs are different, so most expats use a combination of these strategies depending on where they settle. This range of affordable health care options is one of the things expats value most about living, working, or retiring abroad.