In some places around the world, it is possible to arrange good, comprehensive health insurance for less than $100 per month. In some countries the cost of medical care can be so low that it can make more sense to pay for it as you need it, rather than insuring against it. And, under certain circumstances, health care can even be free. These are all potential upsides of one of the most important, complicated and personal aspects of retiring overseas.
With a few exceptions (notably, military policies), your U.S. health insurance probably won’t cover you outside the United States. Medicare generally won’t work overseas. Therefore, when planning for how to pay for your medical care as a retiree in another country, you’re choosing among three options: You could purchase a local insurance policy, an international insurance policy or opt out of insurance altogether.
This last option may seem frightening and risky, maybe even crazy, but I know a number of full-time retirees overseas who have chosen to go the no-insurance route. They’ve done the math and realized that they’re better off keeping an emergency medical fund (an amount of money that would be enough to cover even catastrophic care in the country where they’re living), rather than paying monthly insurance premiums. When you’re talking about a place where a doctor’s visit costs $2, as it can in Thailand or Vietnam, you begin to understand how this math adds up.
Still, most retirees don’t feel comfortable having no medical insurance. In this case, you’re choosing between a local health care policy and an international one. A local policy is one purchased in the country where you’re intending to retire. The big advantage of this type of health insurance is that it can be super cheap. Depending on your age (which is the primary determining factor), you can purchase comprehensive coverage for care at international-standard facilities in some countries for as little as $60 or $70 a month. In other words, you could arrange health insurance in some of the most appealing retirement spots in Latin America, including Panama, Uruguay, Ecuador and Colombia, for less than $1,000 a year.
The downside to this kind of policy is that the coverage is limited geographically. A local health insurance policy will cover you only in the country where it’s purchased and sometimes only in particular regions or at particular facilities in that country. Some local health insurance purchased in Panama, for example, will cover you only in Panama or at a particular hospital.
This can be ok if you’re retiring full time in Panama and don’t intend to travel outside Panama often. Even if you’re intending to live full time in a particular city, though, choosing to insure your medical care through a particular hospital in that city can be risky. Hospitals can and sometimes do go out of business. Then what?
The other downside to country-specific health insurance is that you usually can’t purchase it after age 60 or 65, depending on the country and the insurer. Your coverage won’t be discontinued after you reach the cut-off age (assuming you’re paying the premiums), but, beyond that age, you won’t be able to qualify as a new policy holder. This is one reason why, if you’re considering the idea of retiring overseas, it’s important to address the issue of health insurance sooner rather than later.
If you intend to move around a little in your retirement overseas, you probably want to arrange health insurance through an international carrier. Perhaps you intend to base yourself in Ireland or France, for example, so you can travel regularly throughout Europe. Or maybe you’re considering retiring overseas part time, basing yourself in Mexico but returning frequently to the United States so that you can stay in touch with your grandkids.
In situations like these, an international policy makes more sense, because you can customize it according to your plans. The biggest international health insurer is Bupa International. Coverage through Bupa is going to be more expensive than local coverage (perhaps considerably more), but it’s also going to be more flexible. And while international coverage is more costly than local coverage, it’s almost always less expensive than U.S. health insurance (Medicare aside).
Coverage through an international insurer like Bupa can be based in the country where you’ll be spending most of your time, but, depending on the policy, can cover you worldwide. It could even cover you in the United States, though the United States could not be your base country of coverage. Including the United States in your coverage will also increase the cost of your premium considerably because the United States is the most expensive place in the world to seek medical care.
The cost of a Bupa policy varies depending on the base country, the geographic scope of coverage, your age and any pre-existing conditions. A typical premium for a 60-year-old might cost $300 a month. Note that Bupa will accept you as a new policy holder through age 73.
In some places overseas, health care can even be free. In fact, this is the case in many countries. The catch is that you must be a legal resident and usually you must have paid into the social system at some point to access the available free health care services. The further catch is that the available free health care services may not be up to a standard you’ll be comfortable with.
Health care is free to residents who qualify in most of Europe, for example. I lived in Ireland for seven years. We used the free public health care services in that country often and were always happy with the results. In fact, my son Jackson was born at the public hospital in Waterford, Ireland. The care he and I received was great, and it was also free of charge. (Although, we were paying into the social services system because we were running a business in the country at the time.)
However, our experiences were during celtic tiger Ireland. Today, 15 years later, in bust Ireland, the country’s public health care is stretched to a near breaking point. Hospitals are closing, and even patients with serious concerns are on long waiting lists for treatment. And in most of Central America, for example, most foreign retirees are not going to want to use the free health care even if they do qualify.
Retired overseas, should you keep your Medicare? As I mentioned, Medicare typically won’t do you any good outside the United States. However, I recommend that you continue to carry at least Medicare Part A, which is typically free, viewing it as a fallback plan. The best strategy is often to continue paying for Medicare while investing in a local country policy in the country where you intend to base your retirement.
Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 28 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter. Her newest book, How To Buy Real Estate Overseas, published by Wiley & Sons, is the culmination of decades of personal experience living and investing around the world.