How Seniors Are Managing Their Healthcare Costs As Expats

When it comes to common money worries, paying for healthcare is the number one financial concern for seniors. With the cost of healthcare for retirees climbing to $285,000, healthcare costs have now become an integral part of financial planning as a senior.

As a result, many seniors are now seeking ways to pay for their heightened healthcare costs- particularly if they choose to move abroad. According to estimates from the State Department, the number of American expats is approximately 9 million and rapidly rising.

While many seniors confirm a significant perk to moving abroad can be the lower healthcare costs, they still have to come up with ways to foot the costs in their older years. From securing international health insurance policies to budgeting for healthcare in their retirement budget, here is how seniors are managing their healthcare costs as expats.

How Expats Are Managing Their Health

Relying on the Country’s Public Healthcare System

First, expats often rely on the public healthcare system of the country they now reside in.

For example, according to the Expat Insider survey, 39 percent of the seniors relocating abroad claim that the public healthcare system in Spain is easily affordable compared to other national averages. The ‘Sistema Nacional de Salud’ (SNS) provides free basic and emergency care.

Meanwhile, people in other countries like Costa Rica can benefit from the state-provided system in exchange for a small income-based contribution.

Elsewhere, in Mexico, senior expats can enroll in the IMSS for a $400 charge per year. The requirements state that you must be a permanent or temporary resident and contribute for at least 4 weeks. The coverage for IMSS lasts for up to 52 weeks and extends to primary care, hospital expenses, and surgery. 

In an article published by the Associated Press expat and Mexico resident says he and his spouse pays $80 per month for IMSS, Mexico’s public health system. However, they also use private healthcare for most needs and continue to pay out of pocket. Even then, the cost is minuscule compared to the costs they would pay if living in the U.S. For instance, treatment for a motorbike accident would cost $20 in Panama.

Things to Consider

Of course, the effectiveness of this approach varies dramatically depending on the country you’re living in and the specific health challenges you face. Sometimes healthcare might be more expensive than you expect. Other times, there may be some serious quality issues.  

Because of this, it’s crucial to do your research. Make sure you understand the ins and outs of the healthcare system in question.

What happens if there’s a serious health issue? What about long-term support needs? Some countries have much better systems for this than others.

Using International Health Insurance Coverage

Expats living in countries like Spain and Germany can also subsidize the gap in public healthcare coverage with international healthcare insurance or senior expatriate insurance policies.

Many people also choose to buy a global health insurance plan, which covers them across the world on their travels. Some of the most commonly chosen plans include Cigna Global’s Medical plan and IMG’s Global Medical Insurance Plan.

Things to Consider

When choosing a global health insurance plan, look for a plan that covers the destination or destinations you intend to travel to. There are also three kinds of insurance policies to choose from: local health insurance, travel insurance, and international health insurance.

You will also want to tailor your plan to your medical needs. Most insurance plans will cover hospital visits and emergency medical evaluations. However, if you have an existing medical condition or want to include coverage for dental care or private accommodation you can personalize your policy.

Also remember that insurance policies are a preemptive approach. They work best when you get them in place long before there’s a health issue.

Make sure you consider how the policy changes over time. Some become more expensive as people age. This could make them unrealistic for seniors who don’t have much money. 

Dipping Into Their Savings

The local healthcare system and insurance often aren’t enough to fully pay for a senior’s healthcare needs. Because of this, some expats find that they need to dip into their savings to meet their healthcare costs.

For seniors living in the US, Medicare coverage kicks in at 65. However, seniors can amend their state health plan coverage choices if their annual plan of notice (ANOC) indicates an increase in premiums or if they have plans to be expats in the coming year. Medicare coverage does not extend beyond the U.S. for longer than 6 months.

Of course, this issue isn’t limited to expats. Many people in the United States need to rely on their savings to pay for healthcare costs. Some even go into debt.

Things to Consider

If you’re going to live as an expat, it’s wise to have a healthy savings backup. This gives you flexibility for whatever challenges come your way, including health issues.

It’s also worth thinking about any incoming money versus expenses. You don’t want to be whittling away at your savings simply for living, then have nothing left when a health issue strikes.

A health savings account (HSA) is relevant as well. Only 45 percent of those who had qualified for an HSA have gone ahead and opened one, according to an article published in the Journal of Financial Service Professionals.

Using Credit

Unfortunately, credit is increasingly common as a way to pay for health costs. This is true for people living in the United States and expats.

Getting health insurance and having a decent savings account can reduce the risk that you’ll need to rely on credit. Even then, a large health crisis could still derail your plans.

Does Being an Expat Help With Health?

Living overseas does have some benefits, as your healthcare could be much lower than they’d be in the United States. But, at the same time, you don’t have access to supports like Medicare, Medicaid, and American assistive programs.

The overall effect will vary depending on the country you choose and how your health changes over time.

While there’s plenty you can’t predict, doing your due diligence can make a huge difference. Think carefully about the healthcare system of your chosen country, as well as your options for financing any care.

Planning ahead is important too. This gives you time to get the right insurance set up and to develop a healthy savings habit.

Also, make sure that you get a checkup before you leave the United States. This helps you avoid getting caught in a healthcare emergency while you’re abroad.

You should also have a backup plan in place, even if you plan to retire overseas. If being overseas doesn’t work out, for whatever reason, it’s important that you have something to come back to at home and enough funds to return.

Final Thoughts

Whether you’re in the United States or overseas, planning is one of the best ways to manage your healthcare costs. This allows you to weigh up the different options and find the best path forward.

Beyond this, it’s crucial to simply take care of your health. This includes eating well, getting enough exercise, and having regular checkups. Taking these steps lowers the risk of many health issues, which then means fewer healthcare costs.