By Ellis Rouchelle
If you’re considering moving to another country to work or retire — even if you’re just planning a vacation abroad — be sure you understand the health insurance requirements before you go.
In a growing international trend, countries across the world are requiring that foreign residents, and even vacationers, show proof that they have health and accident insurance when they enter the country. According to immigration and insurance experts, the requirement makes perfect sense.
“Countries are protecting themselves from expenses that should be borne by foreigners, not by the national economies,” says London School of Economics professor Sean Ethridge. “The social services of many countries are already over-burdened with poor immigrants and refugees so it’s logical that foreign workers and retirees be made to cover their own health care expenses.”
Ethridge believes that almost all countries will soon adopt health insurance requirements for foreign residents if they have not already. “Increasingly, countries are developing common immigration policies and for most of them a health care requirement is a no-brainer. Within 10 years, I predict that any country that has appeal to foreigners, whether for expats or tourists, will have similar rules.”
Among countries recently adding a health insurance requirement are those in so-called Schengen zone of Europe. The 26 countries in the area, mostly members of the EU, include Spain, Norway, Hungary, Iceland, Italy, Denmark, Estonia, France, Finland, Germany, and Latvia.
Even countries with existing health insurance requirements or public health plans that cover foreigners, are updating their requirements. “A number of countries that offer universal health care are considering adopting a two-tier payment system, one for citizens and another for foreigners,” says international insurance consultant Ron Montgomery. “Governments are realizing that it’s not fair that foreigners pay the same as citizens who have paid into a system for their entire lives.”
The growing number of retirees who relocate to another country pose a special problem for governments, Montgomery says. “These are generally older people with more medical problems and local experts are beginning to understand that they put a special burden on health services and, in most cases, are not paying their fair share,” he says. “This is especially true in Latin America, southern Spain, and southeast Asia, where there are growing populations of elderly North Americans, Britons, and Europeans.”
According to Montgomery, the governments of such popular Latin American retirement destinations as Mexico, Panama, Ecuador, and Costa Rica are planning changes to health insurance requirements and programs to accommodate foreign residents. “They have run the actuarial numbers for older foreigners and realize that they are underpaying,” he says. “This is especially true for elderly U.S. citizens, who tend to be sicker and more expensive than any other group.”
Julio Ramirez, a Panamanian health researcher, agrees. “We were shocked when we studied the real health care costs for elderly North Americans,” he said. “Both the private and public sectors have badly underestimated the costs and will be forced to make upward adjustments.”
Ramirez, who is working with Panamanian immigration authorities to revise rules for foreign residents, says increasing the cost for health insurance and health care has the added benefit for countries of providing a “means test” for prospective expats. “If they can’t afford to pay the real cost of health care, maybe they can’t afford to live here,” he says.