Expat Life

Moving overseas is the only way to escape the outrageous cost of health insurance in the U.S.

By Lief Simon

As my wife Kathleen and I prepared these past several months to shift our living situation and begin spending more time in Europe, I decided to take the transition as an opportunity to shop health insurance options.

Health insurance is vastly more expensive in the United States than anywhere else in the world. That reality I’ve understood for decades.

What I’ve come to understand better recently is how big the differences can be among international health insurance policies when it comes to both pricing and coverage.

Your age and the amount of deductible you choose make a difference in price, as you might guess. However, also important to your cost is the home base country you identify. A policy based in, say, Ireland comes with a different price tag than one based in, say, Panama or Ecuador.

Meantime, it’s important to understand what you’re buying. Some international health insurance coverage amounts to a basic major medical policy that covers you in case of an accident, hospitalization, or a debilitating disease. You’re on your own for regular doctor visits and day-to-day medical costs. That could be exactly what you’re looking for… or not.

Health insurance for a couple in their 60s costs $17,500 year in the U.S. In Panama, the same policy is $4,000. In Ecuador it’s $2,500.

Most international policies allow you to choose to include or exclude the ability to seek treatment in the United States. Including U.S. coverage as part of your policy increases your premiums, though not to the levels of U.S. health insurance, which, again, is the most expensive in the world no matter how you slice it.

An expat friend who moved back to the United States this year now finds himself in the middle of the Obamacare fiasco. As an expat, he was exempt from Obamacare.

Now that he’s returned to the States, he’s subject to the requirements of Obamacare just like every other U.S. resident. However, my friend is self-employed and so doesn’t have coverage through his work. He must seek coverage, therefore, through his state’s insurance exchange.

All he wants is a major medical plan with a high deductible. The insurance company (the only option for his state) won’t sell it to him. The only health insurance plan available to him is what he calls a “pre-paid medical care” plan. It includes regular doctor visits for checkups, a cold, or a hang nail. It also comes with a low deductible … and a high price.

The cheapest option available to my friend totals more than $17,000 per year for his family of four. He’s stuck. He’s back in the States for family reasons, meaning that, for the next few years at least, he’s going to be railroaded into a health insurance policy he doesn’t want (or really need).

That $17,000 figure is a bit higher than the average cost of health insurance for a U.S. family, which is about $14,500 per year, according to a Kiplinger’s article I read this week.

When I decided to shop coverage for my family, I got quotes from four companies. Two were for comparable plans with similar pricing. One was simply a major medical policy… the type my friend wants but is being told is not available to him in his state of residence.

The final plan I had quoted is one like the plan my U.S. friend is being forced to purchase except it includes options for higher deductibles.

The cost for our family of three among the four options I looked at ranged from $1,800 to $7,000 per year.

Yes, that’s $1,800 per year, not per month.

All policies I had quoted included the option for care in the United States along with a $5,000 annual deductible.

The policy I chose (as you may have guessed, the $1,800 policy) covers 100% of medical costs after the deductible for care outside the United States and 80% of the first $5,000 after the deductible for care sought inside the United States but outside their network. Care inside the network is covered 100% anywhere in the world.

We included a panel discussion on health care and health insurance options as part of our recent Retire Overseas Conference. One of the panelists participating in this discussion explained that one of the main reasons she left the States was the cost of health insurance.

Now that she’s free to choose whatever kind of policy she wants, she has opted for is a local plan in the country where she’s living. It’s good coverage that includes accidents while traveling but that does not allow her to travel to seek treatment in the United States. As excellent health care is available in the country where she’s living, she’s not concerned.

For this policy, she is paying $140 per month, a cost that delights her but that works out to about the total amount I’m now paying for coverage for my family of three.

And which makes my point about how variable coverage and costs can be. It really can pay to shop around.

Health care has been flipped on its head in the United States. The insurance companies run the game … and it is a game.

I see it something like trying to understand the price of an airline ticket,though, of course, with dramatically more serious stakes.

The insurance companies decide and dictate.

Last year, I underwent a procedure to fix my deviated septum. When I explained to the doctor that I would be self-pay (as the total cost of the procedure was less than the high deductible of my international insurance policy), he responded to explain that I could discount his fee by 50%.

Likewise, the hospital and the anesthesiologist took 50% of their costs off the top… and assured me that, even with the discounts, they were making more than they would have expected to be paid out from most U.S. insurance companies.

Everyone in the United States is arguing over affordable health insurance. I think they’re having the wrong conversation.

What Americans should be demanding is affordable health care.

The answer is to take control of the industry out of the hands of the insurance companies and the lawyers.

On a recent visit to Harvard University, I met with a member of the faculty who explained that he is working to do just that.

“You’re taking on the U.S. health insurance industry?” I asked.

“Yes, I am,” he replied simply.

I shook my head and then his hand. Talk about David and Goliath.

I wish him Godspeed.
___________________

Lief Simon has lived and worked in 7 countries on 5 continents and has traveled to more than 60 countries. He is editor of the Offshore Living Letter.

Credit: Live and Invest Overseas, www.liveandinvestoverseas.com

  • Galileo

    “The answer is to take control of the industry out of the hands of the insurance companies and the lawyers.”
    This sounds like the only solution! Price of services is greatly affected by insurance companies and lobbyists. The more they charge the more they profit. Kick these carpet baggers out of here and expose the recipients of their greed.

    • Globetrotter

      “the only solution!”

      But is that possible for America? Once anything becomes a profit center in the USA, those who benefit by it double down and buy all the necessary politicians and advertising (aka propaganda) to lock it in. This has been going on for generations.

      So though the world has scores of examples of national health systems that function much better at half the cost for the last 60 years, how can America and Americans opt for any of these choices with shaped perceptions and governments controlled by profit-takers?

      • StillWatching

        This post is proof that every once in a while, even Julius gets one right. Sadly, the situation is pretty much as he describes it. However, to answer the question Julius posed, all I can think to respond is that perhaps those freedom loving Americans (as he calls them) are willing to put up with what they have in order to appear as if they are rejecting the control of government. That character trait is among those that made the U.S. the great country it is (or was) and sometimes you have to accept the negative consequences of character traits that are over all positive.

        Frankly, the U.S. model and all the socialist models for healthcare are pretty bad and until (don’t hold your breath) a truly libertarian model is allowed to emerge, you will get what you already have.

        No, I don’t wish to indulge discussions of what the libertarian model would look like.

        • Kevin Lichtman

          A truly free market for health care in the U.S. (we never had one in my adult lifetime) would probably be charavterized by 75% purchasing private health insurance at substantially reduced rates (or opting out to self insure) and 25% depending on some form of government subsidized or directly distributed (like the VA) healthcare.

          • mjw9

            So Kevin, what happens when those who “choose to opt out” and “self-insure” get cancer that requires $500,000 in treatment costs that they can’t afford? or need very expensive heart surgery to the tune of $250,000 to repair a defect (this happened to my daughter)? Let ’em die? Will you be the one to tell them and their parents, children, and family that as citizens of the most prosperous nation in the world providing life-saving healthcare is just not a priority if you are not wealthy but that the citizens in ALL of the other economically developed countries get healthcare whether they are wealthy or not? If that is your position, then you think the definition of a “great country” is VERY different than mine.

          • StillWatching

            While I have no idea if your figures are accurate, I certainly agree with the general notion you posit. Like you, I have never seen a truly free market for health care and the currently extant in the U.S. is devolving to one that is more and more controlled by various forces, all of which are negative.

          • Globetrotter

            Can’t work Kevin. All the nations that deliver better universal healthcare at 1/2 the price the USA and as a matter of birthright, have learned 1. it can’t work unless the target market is the entire nation
            2. administrative costs are largely eliminated by removing the insurance companies
            3. no ailment of any kind, anywhere, can be refused (except if we are in the US).
            4. Each citizen has a right to choose their care givers.

            Both doctors and citizens can opt out of the system or buy a plan for faster treatment. For a citizen, this is unnecessary if they live in a rural area (care is as immediate as one finds in Cuenca with a wad of money). But it is popular in cities with business people. It is cheap as the government still pays whatever the law says they must. So if you want a private rooms, same day examinations, same day specialists..figure 1000 a year.

            Cost is removed from all health issues from birth to death. Of course, we all complain..as we do about roads and other gov stuff. (shrug) But it is no one wants to go backwards to what you guys have. The only national health system I can recall deteriorating seriously UK’s NHS. But their Conservatives are a lot like your Republicans. The article is correct. If you want quality healthcare at a reasonable price, you have to leave UK/US.

  • Chuck S

    First order of business is to let insurance companies compete across State lines, let’s hope this gets passed soon!

    • edgeof 2

      ….more of the same – won’t help the root cause if the problems. Competition has no place when talking peoples health care. Reminds of trickle down economics. Wishful thinking.

      • Timothy J. Williams

        Not true. If the health insurance industry were as open as the auto insurance industry, the premiums would be comparable.

        • StillWatching

          Arguing with fools and ideologues is like teaching a pig to sing. All you do is annoy the pig and waste your time.

    • StillWatching

      A libertarian step in the right direction, but no panacea at all.

      • mjw9

        I have asked many times with no answer…..What successful country in the world has ever prospered or even survived under “libertarian” governance principles?

        • mjw9

          Still waiting for an answer to that one!

  • LadyMoon

    What is the purpose of a health insurance company in the US? None.

    • StillWatching

      Wrong. It’s purpose is to insure against catastrophic loss that would happen to uninsured people that suffer tragic medical situations.

      Whether the U.S. health insurance system does a good job of that is a completely different matter.

      • Galileo

        I respectfully disagree! Their purpose is to insure their stock holders receive the maximum return on their investment. Their purpose is to lobby the government and drive the cost of health care through the roof.

        • StillWatching

          You are confusing purpose and result. Think about it.

          The desired purpose of the insured is to do as I have clearly stated; it is to insure against catastrophic loss that would happen to uninsured people that suffer tragic medical situations. The actions of the insurance companies and insurance lobby are completely separate from this and if you read the rest of my post, you would know that I accounted for it. I’ll restate it here: “Whether the U.S. health insurance system does a good job of that is a completely different matter.”

          • Galileo

            Ok, thank for the clarification of your comment. So, to paraphrase individuals purchasing insurance is betting something bad is going to happen and insurance companies are betting nothing serious is going to happen that they might have to cover.
            I think I would rather bet on myself than against my selfs probabilities knowing full well that nothing insurance companies provide benefit me in the least. The odds are in their favor… However, you are exactly correct in what you are saying. Some of us chose to say ___it! You can’t prevent blackbirds from flying over your head but you can prevent them from building nests in your hair and you can wash the doo doo out when it hits, if it hits. Lot of yadiyadiyadi mumbo jumbo…(:

            • StillWatching

              No, that isn’t accurate. An individual that purchases insurance isn’t betting that something bad is going to happen, he simply recognizes that something bad CAN happen and he is insuring against that. Insurance is insurance. The wise among us hope never to have a claim on any sort of insurance they may have, whether it is Life, Health or Automobile.

              Taking out an insurance policy isn’t betting against yourself. It is no more than stated: Insuring against risk.

              • Galileo

                I disagree! Insurance does not insure anything, it only gives some kind of hope for financial protection, that is only a hope.

                • StillWatching

                  Most companies (outside of Ecuador) are honest and deliver as per the contracts binding them. That is due to what every libertarian believes in—————– they are under the watchful eye of regulators. Fools (many of whom opine on this forum) believe libertarians are anarchists that don’t countenance government regulation of any sort. They fail to realize that we claim that among the rightful functions of government is to protect the citizenry from coercion and fraud. That is a huge umbrella that includes such thing as breach of contract and enforcement of laws, including contractual obligations.

  • Sarah

    While the insurance carriers are making money it must be said that federal laws as well as state laws regulate what insurance is required to cover in a policy, such as maternity, even if you don’t want that on your policy. Obama Care regulates a maximum on your deductible so it’s no longer an option to buy a high deductible catastrophic policy, even if you have the cash to cover the deductible. I could go on and on with examples. It’s not just the insurance companies, it’s also the drug companies, the state & federal regulatory bodies who have mandated coverage requirements that limit a consumer’s choices, & laws that mandate that hospitals cover anyone, including uninsured legal & illegal visitors to the US. There are a lot of things that would need to happen to potentially lower the pricing, & IMHO, that won’t happen. Insurance companies have been working towards true universal care paid for by the US government since the Clintons. Carriers want to administrate the care like they do with Medicare & Medicaid (where they are make money hand over fist while the Feds foot the bill) without having to make the enormous cost of the actual care. They are helping ratchet up the premiums cost until the populace gets so fed up with it that universal care for all will be legislated. I think that will happen in my lifetime but that will mean higher taxes.

    • StillWatching

      There is a heck of a lot of truth and insight in this post. Nicely expressed, too, because it doesn’t harangue a position, just lays out reality.

      • mjw9

        Your “reality” is just not real. Many other economically developed nation provide better healthcare outcomes for a significantly lower cost. THAT is reality.

        • StillWatching

          Your assumption that I am unaware of these facts that you seem to think are tightly guarded secrets, is completely wrong. You have no idea what my reality is.

        • Galileo

          Many other economically developed nations provide better healthcare without the intervention of a third party ponzi scheme called insurance.

          • mjw9

            AGREED!

    • IDJazzman

      And the result will be inferior health care.

    • Globetrotter

      “that will mean higher taxes” That has not turned out to be the with the many National Health plans around the planet. In all cases, health costs plummeted and stayed that way (with the UK under a Conservative government being a notable exception). As it is, the US pays double everyone else for non-universal health care (everyone else is universal) often with exclusions (no one else has exclusions) and less than a stellar quality. https://goo.gl/UXb87z and https://goo.gl/vebpTc So unless the US public service people are, by nature, SIGNIFICANTLY less honest than most of the planet, https://goo.gl/D9qufc you are wrong. Like the rest of us, you will find that your taxes rise less than 1/2 the cost of your present insurance premiums and you will all live longer with a higher quality of life.

      Unless Americans throw off the yolk of the misconceptions they have been saddled with, does the USA have a future?

    • Gigi

      Sarah, I agree. Look at how Mylan raised the price of EpiPen by 400% overnight. There will be others.

  • Lourdes N Mordini

    “The answer is to take control of the industry out of the hands of the insurance companies and the lawyers.” There is a huge difference between what service p[roviders bil and what they actualy get paid. And the services one receives are determined by the insurance companies to a great extend.

    • StillWatching

      In whose hands would you place that control that you wrest from the insurance companies and lawyers and how would you go about taking it from them? I hope you don’t think that government would be any less corrupt or subject to the influence of lobbyists.

      • Galileo

        Stillwatching, (: (: When did the people give up their responsibility of taking care of themselves? Government cannot be expected to be the “turn to” solutions to your person needs. One thing we seem to miss here is that we are going to die with or without insurance sooner or later. Later if life is decent, hopefully sooner when that is not the case.

  • Ray Fitzsimmons

    This article only applies to people under medicare age. Most U.S. citizens in Cuenca are over 65 & have medicare coverage which is half the price of IESS coverage with the new, increased pricing by IESS. Our cost is double what I already pay for medicare

    • KeithB

      My wife and I pay about $78/mo. for IESS coverage, quite a lot less than what we would pay in the U.S. with all the extras. If you weren’t grandfathered at the old IESS rate like we were, there’s plenty of low cost insurance plans available.

      • Ray Fitzsimmons

        I haven’t read anything that states you can be “grandfathered in” to the old rates of IESS. We had that rate & dropped it out of fear of the increase while out of the country (auto bill pay). Haven’t found any coverage for less than $200 each per month in Ecuador.

        • KeithB

          In May, IESS said that all voluntary members would have tp pay 17.6% of declared income but this was reversed in July or August. Now, only those who signed up since the new law took effect in February are paying the 17.6%– everyone who was in the system before then and didn’t cancel is still paying the old rate. I believe there were posts from Lina Ulloa on this site and Gringo Post that explained this.

          • Sue

            This is true according to my lawyer. Most of the people I know are still paying the $70-something rate and have been told that it will not change.

            • mjw9

              Aren’t you ashamed to be receiving such enormous benefits from a system you haven’t contributed a fair share to?

        • mjw9

          My Mediccare and supplement premiums are higher than that!

    • Linda Yazell

      Are you planning on moving back to the states? I understand you can drop Part B Medicare and your supplement. If you move back to the US, you can rejoin Part B, by paying a percentage more than you pay now. Not sure what that percentage is. I’m looking into this now because I’m planning on moving to Ecuador, and I have A B, and a supplement now.

      • Ray Fitzsimmons

        Since we satisfied residency requirements, we now split our time between Cuenca & Florida. You can not drop medicare part B once they are deducting it from Social Security. You are automatically enrolled at 65 & they will not honor their own form to drop out! I obtained the form our embassy & paid $54 to send it DHL to Social Security. It was ignored.

        • StillWatching

          Ray, I know lots of people that have dropped medicare part B after they were having the payments deducted from their social security benefits.

        • Galileo

          Ray, not true! I dropped my part B without any problems. Must be some “subpart” that i missed or rather should I say a requirement that didn’t apply to me that does apply to your situation. I don’t know but I would check into it again if I were you since you can get IESS for the cost of the part B coverage. (more or less) Good luck!

        • Ricki

          They do not except DHL. You need to mail the form from the US. We cancelled our B last year via mailed forms. We had kept it for four, but now we are re-enrolling.

      • Katheryn

        you can drop Medicare part B, however, should you have any large or major heath event, you will owe could end up owing a lot of money. Recently, I had to call the ambulance due to a recent knee replacement that got infected. The ambulance charged $7l5 to go 15 miles with no intervention or use of services other than transport there. I could have called a cab. I have medicare and I pay for an advantage PPO plan in addition, so really do your research.

        • Linda Yazell

          Am I correct in assuming this happened in the US and you didn’t have Part B? Or was this in Ecuador? The other thing to consider is that one might have a condition that makes it medically impossible to fly for a period of time, such as after a stroke or major surgery. So you wouldn’t want to fly home to have the surgery with the plan of getting back on a plane and making the extremely long flight back to Ecuador shortly thereafter. After seeing how long it takes to get from San Francisco Cuenca, I’ve pretty much decided that when and if I move, it will be to some place in Mexico, possibly Guanajuato.

    • StillWatching

      Get real, Ray. How are you going to access your medicare coverage in Ecuador when medicare covers nothing outside of the boundaries of the United States? Are you going to fly back to the U.S. every time you need medical care? You’d wind up paying far more in the end than you would by obtaining insurance here in Ecuador.

      • Ray Fitzsimmons

        I did not say what you are attacking me about. I am saying that medicare coverage in the U.S. is less expensive than being forced by Ecuador to purchase a major medical policy while in Ecuador. IESS coverage doesn’t cover you outside of Ecuador the same as medicare doesn’t cover you outside the U.S. Why won’t Ecuador allow us to pay as we go for inexpensive medical services in Ecuador?

        • StillWatching

          Here is what you wrote: “Most U.S. citizens in Cuenca are over 65 & have medicare coverage…”

          While most U.S. expats MAY be over 65, most do not have medicare coverage. They dumped it and so can you, in spite of your claim that you can’t.

          • Galileo

            Ray, do you have USA medicare or did your ever have it? I think you might be confused over the coverages and what a retired person pays and doesn’t pay. It makes no sense whatsoever to “dump” medicare since we don’t pay for it anyway. Now if you are talking about the “part B” portion, I agree…

        • Linda Yazell

          Here’s what AARP says:
          Yes, you can opt out of Part B. To re enroll, you’re required to submit a form (CMS-1763) that must be completed either during a personal interview at a Social Security office or on the phone with a Social Security representative. For an interview, call the Social Security Administration at 1-800-772-1213, or your local office.
          Medicare insists on an interview to make sure you know the consequences of dropping out of Part B—for example, that you might have to pay a late penalty if you want to re-enroll in the program in the future.

          My Medicare book says that the penalty to re-enroll is 10% for each year you’re out of the program. If the rate now is $138, and you’re out for 4 years and then opt back in, you’ll be paying $324/mo for Part B. If you’re going to split your time between Ecuador and the US, you probably don’t want to lose Part B.

      • Galileo

        Stillwatching, that has been my solution to the problem. It is only a four hour flight to Miami.
        I would rather pay my own way if that were not possible.
        I also believe that Susan Burke’s advice on healthy living should be a “rule” not just a good idea. We should take responsibility for our own well being, knowing that crap breaks eventually. Problem is the insurance companies cannot be counted on to be anything other than the problem.

        • StillWatching

          I’m confused about your reference to the 4 hour flight to Miami. What would that flight be for? To get medical care or to opt out of medicare? The latter doesn’t require a flight at all.

          • Galileo

            Just to go back for a pre-arranged medical care or other medical service. Emergencies should be easily handled here by most folks until stable out of pocket.
            In my case two months of private insurance at 17% will more than cover my travel expense.

  • Kevin Lichtman

    it is not the insurance companies alone that are driving price of medical care in the U.S. it is also medical service providers, pharmacuetical companies, liability lawyers and doctors. All are enabled through legislation that protects their markets and forces consumers to pay outrageous costs. For example in the U.S. and echocardiongram averages $1500. In Ecuador it costs $125. The U.S. price includes $300 for the physician’s evaluation which takes all of 5 minutes, perhaps, which comes to $3,600 per hour.

    • Galileo

      Kevin, be careful you are talking about the Gods! They are all part of an industry that spells elitism!

  • StillWatching

    “Health insurance for a couple in their 60s costs $17,500 year in the U.S. In Panama, the same policy is $4,000. In Ecuador it’s $2,500.”

    No matter what the cost is in any venue, Ricki will complain about it without end

    • StillAlive

      I had another weird flashback today:

      https://youtu.be/6ZlLQLFq_H4

      • StillWatching

        I wonder if that condition is treatable?

        • lorenzo

          The condition is treatable, but not covered under Medicare part B.

          • StillWatching

            Maybe he has a supplemental policy…

  • IDJazzman

    “The answer is to take control of the industry out of the hands of the insurance companies and the lawyers”.
    So government is suppose to take over? Oh, that had ought to really solve the problem. Not!
    It is just not the insurance companies, it is a lack of competition in the entire market, among insurance companies, hospitals, doctors and Big Pharma and much of how the US handles health care is predicated upon government regulations, which is designed to enhance the profits of all these entities. So now we go back to the root cause, which is the swamp.

  • cyber force

    this is be at least for Ecuador –now you pay 21 per cent of your retirement income for health insurance –already some are planning on moving out of Ecuador to other countries because of this change in law here as of feb 2017
    also the law was changed in regard to residency —

  • baba free

    I’m a citizen of one of those ‘evil’ socialist republics: New Zealand. We don’t pay anything for health care, though, they get their funding from various ‘indirect’ taxes…i.e, VAT is 15-17% and income tax is more biting than the US..but we, on the other hand, don’t fund non stop global wars, either…

  • Galileo

    Very good commentary SW. Unfortunately this is very true. I am ashamed we has lost the ability to learn from history.

    • StillWatching

      It reminds me of the oft told tale (although not actually true) that if you throw a frog into a pot of boiling water, he will immediately jump out to save his own life, but if you but that frog into a pot of tepid water and gradually bring the water to a boil, the frog will allow himself to be cooked.

      So it is with people’s gradual slide into statism. It is so easy for people to justify a small but constant erosion of the values that they once held (think self reliance) and succumb to the siren song of “something for nothing”, or at least something that they are getting for less cost or effort than if they earned it on their own.

      Over the course of my lifetime I have seen this gradual erosion and I believe it has ruined the fabric of society. Look around and you will see people everywhere doing things that would have caused your parents to blanch. How sad.