Now that you're retired, you might be thinking about moving abroad. But what can you expect from Original Medicare, Medigap, and Medicare Advantage while living the expat lifestyle?
Here are the basics you need to know.
Introduction to Medicare
"Traditional" Medicare is Medicare Part A and B. Part A provides for hospital, skilled nursing, and certain types of home care. Part B provides for medically necessary supplies, services, and preventive care. You don't pay for Part A, but you do pay a fee for Part B, which depends on your income.
Of course, this isn't 100% coverage. You'll pay 20% of the cost of most outpatient treatments and $1,260 for a hospital stay. To cover those costs -- plus prescription drugs, which aren't included in Medicare Parts A and B -- you'll probably want to consider Medigap or Medicare Advantage coverage.
Medigap versus Medicare Advantage
Medigap provides supplemental coverage on top of traditional Medicare. There are 10 standardized plans that provide different types and levels of coverages. The cost of those plans depends on your age and health, however, and can vary depending on your provider. If you bought a Medigap policy before 2006, it might cover prescription drugs, but if you're buying a new one remember that in order to get this kind of coverage you'll need to buy Medicare Part D.
Medicare Advantage, on the other hand, is an alternative to traditional Medicare. While each Advantage plan is different, it will cover the basics of Medicare Parts A and B, and might provide for other expenses as well, like dental or vision.
With all that in mind, what happens when you decided to pursue an expat lifestyle? In this case there are two important issues for you to consider: coverage while you're away and coverage when you come back to visit the states.
None of the Medicare or Medicare Advantage plans will provide coverage for your new home country. That means you'll either need to buy in to the local national plan, if there is one, or purchase expat insurance from a private company. You can also look into private insurance in your new home or even paying most costs out-of-pocket.
The best choice really depends on the quality of care, the availability of a national plan, and the cost of private insurance and out-of-pocket fees. Just to give you an idea of how much this can vary from my own (nonretirement) experience, the average cost of an uncomplicated standard birth in the U.S. is close to $10,000. I paid less than $2,000 in South Africa.
Traveling back home
For your trips back home, you'll still be covered by Medicare Part A, provided you're over 65, already enrolled, paid Medicare taxes while you were working, and pay a premium in the rare cases in which Medicare charges premiums to Part A recipients. http://www.medicare.gov/your-medicare-costs/part-a-costs/part-a-costs.html
To continue getting Part B coverage while in the U.S., you'll need to keep paying the premium; you can always drop Part B, but if you decide to reenroll later on, you'll have to wait for an enrollment period and you may have to pay a penalty.
Finally, if you have another plan, whether through a national insurance scheme or a private provider, check what your benefits would be when traveling to the U.S. You might not need to worry about Part B coverage, or you may find that it's absolutely necessary to hang onto it.
Of course, there's a lot to consider when becoming an expat, but once you've sorted out these priorities the bulk of it is fun -- like, for example, whether a Panama hat would be a really great addition to your Panama wardrobe.
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