Many retirees look forward to traveling in their retirement, and more and more are actually retiring overseas, in part as a way to stretch savings. But what happens to federal benefits while you're out of the country? The short answer is that although Social Security benefits are available to retirees, Medicare generally is not.
Check Your Medicare Plan for Limitations
Traditional Medicare does not provide coverage for hospital or medical costs outside the United States (although Medicare does cover residents of Puerto Rico, Guam, the US Virgin Islands, American Samoa, and the Northern Mariana Islands). In rare cases, Medicare may pay for inpatient hospital services in Canada or Mexico.
Some Medicare Advantage (private Medicare) plans may provide coverage benefits for health care needs when enrollees travel outside the United States. Check with your plan before traveling. But those retiring overseas -- or travelers enrolled in the traditional Medicare program or whose Medicare Advantage plan does not cover foreign travel -- will need to purchase health insurance from another source.
How Can You Protect Yourself When Traveling Outside the US?
Medicare beneficiaries who are traveling and who have no other coverage must either buy short-term travel insurance or a Medigap policy that covers foreign emergencies. Medigap plans C through J offer travel emergency coverage, but the benefit applies only during the first 60 days of any trip. This Medigap benefit covers 80 percent of emergency care administered outside the country. A $250 deductible and $50,000 lifetime maximum apply. In addition, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including evacuations. The State Department's Bureau of Consular Affairs provides information on medical insurance while overseas. Also, see VisaGuide.World for a Complete Guide to Obtaining Travel Insurance.
How Can You Protect Yourself When Living Overseas?
Retirees who are moving to a foreign country can't use Medicare to pay for health care while they are living overseas. The options for retirees are to buy private coverage, pay into a government-sponsored system in their new country of residence, or go without coverage. If you're moving to a country with a strong national plan, you may be able to pay into the plan and receive coverage similar to other residents of the country. If national insurance isn't an option, many companies offer expatriate health insurance plans. Choosing the right plan depends on where you are moving. For example, if you're traveling somewhere remote or with poor local health care, evacuation coverage may be important. Another country may offer excellent health care, but each doctor visit may cost a lot of money, so a plan that covers outpatient doctor visits may be necessary there. No matter where you go, another consideration is whether the plan covers pre-existing conditions.
When You Return to the US
Whatever health care option you choose while abroad, if you return to the United States, you will still be covered by Medicare Part A. Medicare Part A covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices. There are no premiums for this part of the Medicare program, and anyone who is 65 or older and is eligible for Social Security automatically qualifies.
Medicare Part B, which covers outpatient services, charges a monthly premium. Unless you continue to pay the premiums while overseas, you will not automatically be covered by Medicare Part B when you return to the United States. If you drop Part B and then move back to the United States, you will have to pay an enrollment penalty. Premiums increase by 10 percent for each year that an individual is not enrolled. Therefore, if you think you may return to the United States, it may be worthwhile to continue paying Part B premiums while living abroad.
US citizens who were living abroad when they turned 65 and who were not eligible for Social Security when they left do not have to pay higher Part B premiums when returning to the United States. These retirees will not have to pay a higher premium if they enroll in Part B within three months of returning and establishing residence.
Learn more about the Medicare program. If you plan to travel extensively or move to another country, contact a local elder law attorney about your health care options.
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