Dream of Retiring Abroad? The Reality: Medicare Doesn’t Travel Well

Claudia Peresman, who will turn 63 on Sunday, moved from Stonington, Conn., to San Miguel de Allende in central Mexico in November. On her first night there, she tripped in the bathroom, hit her face on a wall and split her lip. Her neighbors helped her get a cab to a 24-hour emergency room at a hospital about five minutes away, where staff cleaned up the cut and sent her home. She paid the roughly $25 fee in cash.

Ms. Peresman recently bought a private insurance plan with a $2,500 deductible, for which she pays about $100 a month.

“What I wanted was catastrophic coverage,” she said. “Things are so affordable here that, outside of being admitted to the hospital, I can probably afford it.”

Even when retirees buy a private policy, Medicare is another piece of the puzzle that they have to consider. Once people become eligible for Medicare coverage, they face a 10 percent premium penalty for every 12 months that they are not enrolled in Part B, which covers outpatient services. (People who are 65 or older but still covered by an employer plan generally do not face that penalty.)

After paying into the Medicare system for decades, typically via payroll taxes, some expats are frustrated that they generally can’t use the program outside the United States. That’s just the way the law is written, an official at the federal Centers for Medicare and Medicaid Services said.

“C.M.S. cannot speak to or speculate on congressional intent,” the official said.

And retirees should honestly consider whether they will spend the rest of their lives overseas.

“Even if that is their goal, is their health and mobility going to allow them to accomplish that?” said Dr. David Shlim, 70, who treated many expats when he ran a medical clinic in Kathmandu, Nepal, in the 1980s and ’90s. “People should imagine that they may need to come back to the U.S. and ask themselves how are they going to do that and afford that.”

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