Posted by International Living | Dec 15, 2019
Time and again, I
get asked the question, “Can I take my U.S. Medicare
coverage with me when I move overseas?” It’s a simple question, but
the answer is a little more complex.
In effect, the
answer is: Yes. But to figure out how, we need to look at things in a bit more
detail.
What is
Medicare?
Medicare is the
U.S. federal health insurance program for
people age 65 and over. It also extends to certain younger people with
disabilities and those with ESRD (permanent kidney failure).
How does
Medicare work?
Medicare is divided
into parts A, B, C, and D. Parts A and B make up Original Medicare and are
usually received automatically at age 65. Together, they are designed to cover
80% of “Medicare-approved services.”
Part A covers
hospital stays, care in a skilled nursing facility, and home health-care, under
certain circumstances.
Part B covers medical
services received from a doctor and supplies that are medically necessary to
treat your health condition. These can include outpatient care, preventive
services, diagnostic services, ambulance services, and durable medical
equipment.
Part C (Medicare
Advantage Plans) are a type of Medicare health plan offered by private
insurance companies that contract with Medicare. Medicare Advantage Plans
provide all of Part A, Part B, and, in many
cases, Part D benefits. Most Advantage Plans include
worldwide emergency care services.
Part D covers prescription
drug coverage. It must be purchased separately as a stand-alone Part D policy,
or in a MP-PD, Medicare Advantage Plan.
Medicare Supplement
Plans, also called Medi-Gap Plans, are also offered by private insurance
companies that contract with Medicare. They cover certain healthcare costs not
covered by Original Medicare, such as deductibles, copayments, and the 20%
(after deductibles) co-insurance that Medicare alone does not cover. Some
Supplement Plans offer worldwide coverage for urgently needed services and some
of them do not.
Read the Evidence of Coverage
carefully. In addition to worldwide urgently needed services, Plans G and
F provide world traveler coverage for Medicare-approved services.
Now, onto the
questions I hear regularly.
What if I plan to be a
part-time retiree, living four to six months abroad each year, and then
returning to the States for the rest of the year—what should I do about
Medicare?
In this scenario,
it would be advisable to maintain your Medicare A, B, and either an Advantage
Plan or a Supplement Plan (Medi-Gap).
For an Advantage Plan, you are required to maintain Parts A
and B active, and to reside in the coverage area for a minimum of six months per year. Most Advantage Plans
have low or zero premiums, and they include worldwide emergency medical
coverage.
For a Supplement Plan you are required to maintain
active Parts A and B, and to reside in the state that issues the Plan. Plans F
and G include worldwide emergency care, as well as foreign travel coverage for
Medicare-approved services.
When receiving
medical care during foreign travel, you must pay a $250 deductible, 20% of all
service costs, and all amounts over the $50,000 lifetime maximum for world
foreign travel coverage. You must pay for services upfront and submit proof of
payment to your carrier for reimbursement.
I plan to live full-time
overseas—but I suppose there’s always the chance I’ll return to the U.S. when
I’m older, if my circumstances change. Is it worth my while to maintain any
portion of Medicare, on the off chance that I’ll need it? What are the pluses
and minuses of doing so?
There are two basic
requirements to maintain Medicare Parts A and B. The recipient must maintain
his or her citizenship or legal status in the U.S., and he/she must stay
current with the Part B premiums. There is currently no residence requirement
for Original Medicare (Parts A and B).
In most cases, Part
A has no monthly premium and it is expensive to re-purchase later. Therefore,
there is seldom any reason to drop your Part A coverage.
Part B has an
increasing monthly premium; for 2018, it has an average cost per month of $134.
However, there are several reasons that make it worthwhile to keep Part B.
These include being
able to take up coverage the day you return to the U.S. or its territories,
avoiding any monetary or timing penalties upon reapplication, and the freedom
to apply for either an Advantage or Supplement Plan as soon as you return to
the U.S.
Example 1: Janice Smith
loses her husband while living in Thailand. She decides to return to the U.S.
and live out her days close to her children and grandchildren. Because she has
kept both Parts A and B, she will have first-day coverage when she returns to
the U.S., with no penalties or premium increases for being absent from the U.S.
She can immediately apply for an Advantage or Supplement Plan (depending on her
health) and be covered the first day of the following month.
If she applies on
June 30, she will be covered on July 1. If she is over 65 and three months old
she will have to undergo medical underwriting (based on the health criteria of
the issuing company) in order to qualify for a Supplement Plan, but not for an
Advantage Plan.
Example 2: While living
in Thailand, Janice and her husband decide to discontinue their Part B
coverage. A few years later, Janice loses her husband while living in Thailand.
If she returns from Thailand after March 31, she must wait until January of the
following year to begin Part B coverage. Whenever she returns to the U.S., she
will pay a penalty when she reap-plies for Part B coverage. If she applies for
a Supplement, she will have to qualify for coverage based on the health
criteria of the issuing company.
Always weigh your
options before dropping Part B coverage when beginning your expat life.
I plan to be a “roving retiree”
and spend a few years traveling in retirement before returning to the U.S. At
that point, I figure I may spend part of the year away and part of the year
Stateside. What should I do about Medicare? Is it worth paying for it even
while I’m traveling?
Balancing the cost
of maintaining Medicare coverage while living and traveling outside the U.S.
depends on individual circumstances. In the end, the decision is personal to
each of us. However, certain principles apply to most situations.
If the “roving
retiree” maintains residence in the U.S., he/she could maintain Parts A and B,
and keep the Supplement Plan in force.
The advantages of doing that
are:
• Having access to
worldwide emergency and traveler coverage while out of the States, via the F or
G Supplement Plans.
• If an
emergency return to the U.S. is needed, being fully covered immediately upon
re-entry.
• Not having to
undergo health underwriting for a Supplement Plan upon return to the U.S.
The disadvantages are:
• Having to
continue to pay Part B and Supplement premiums.
• Maintaining legal
residence in the U.S. while traveling abroad.
If the retiree
discontinues Part B, the Supplement is terminated. The retiree would then face
the same time delays and monetary penalties to renew coverage that we saw in
the Example 2 scenario of Janice Smith living in Thailand.
“There is seldom any reason to
drop Part A.“
Whether you
maintain residence or not, if you drop Part B, you face the same time delays
and penalties when you reapply for coverage.
Do I have to keep an address in
the U.S. to maintain Medicare coverage? For instance, if I am resident in Costa
Rica, and I’ve arranged my finances so that I no longer have a state income tax
liability (because I left the U.S. from Florida, which doesn’t have a state
income tax)…do I still need to maintain some sort of Florida address in order
to maintain my Medicare coverage?
This question
concerns eligibility and residence.
Eligibility for
Medicare Parts A and B depends on your legal status in the United States, not
on residence. If you meet the requirements for Parts A and B, you are not
required to maintain residence in the U.S.
Eligibility for
both Medicare Supplement Insurance and Medicare Advantage Plans requires that
you maintain both Parts A and B of Medicare and legally
reside within the coverage area.
And remember: You can only
maintain Part B if you continue to pay your Part B premium.)
For Advantage
Plans, you must maintain residence for a period of six months per calendar year
within your policy’s coverage area.
Coverage area for
Advantage Plans is most commonly based on the county you live in. Medicare
Supplement Plans require that you reside in the issuing state.
Usually, residence
is defined as the location where the consumer files his tax return. Both policies require a physical address in the coverage area and
will not accept P.O. boxes.
An example: I was talking with
an expat recently who informed me that he and his wife have taken out residence
in Costa Rica. He then stated that they have no more liability for state tax.
However, he keeps a
Medicare Supplement Plan for future use in case he needs it.
This idea is a
sticky one because of residence requirements. It could possibly place one at
odds with Medicare fraud, waste, and abuse (Federal), as well as state tax
evasion.
Although government
agencies have been lax in coordinating statistics in the past, Medicare fraud
is a hot-button issue, and it is expected to be increasingly enforced in the
future.
Fraud, waste, and
abuse is a major concern of the Centers for Medicare and Medicaid Services
(CMS), and it’s a required course each year for agent renewals.
Every year we see
the requirements for reporting—and the penalties for nonreporting—becoming more
burdensome. Once reported, most cases are aggressively investigated.
The article Everything You Need to Know About Medicare Abroad first appeared on
International Living.
No comments:
Post a Comment