Medicare: Living outside the U.S.

I recently got emails and a phone call from people living outside the U.S. who are turning 65 soon. Their questions were the same: Do I need to enroll in Medicare Part B and pay the $99.90 per month premium if I am living outside the United States? (Medicare does not cover medical services received outside the U.S.)

WORKING OUTSIDE THE U.S. AFTER 65

Bill lives in France and is working for Airbus, a very big employer. Because he is working and covered by an employer group health plan, you would think he meets the criteria in the 2012 Medicare & You Handbook (page 24).  It says a person who is working and has health insurance through an employer or union can keep that coverage and doesn’t need to enroll in Medicare Part B. This is what I wrote when I first posted on this topic last week – but it turns out that this rule might not apply to a person living and working overseas.

UPDATE:  It turns out that working outside the U.S. with health insurance is not necessarily treated the same as working inside the U.S.  I talked to Medicare and Social Security and got different and confusing answers. I also got scolded by someone with lots of experience writing about Medicare.

Patricia Barry, who writes the“Ask Ms. Medicare” column for the AARP Bulletin, read my original post and told me I was wrong to assume that foreign health coverage through employment would be treated the same as American coverage. Here’s what she wrote:

When I was in contact with SSA about this question, they defined for me the kind of coverage that would count as creditable for Part B purposes and they emphasized not only that national health services do not count but also that it had to be “American style” group health insurance — a kind that hardly exists in other countries.

Airbus is a European company and I doubt very much whether it would provide employees with American-style group health insurance, unless it made a special exception in his case.  Airbus is based in France, which has an excellent national health system, so it does not need to provide health insurance in the way that companies do in the U.S.  

I contacted Bill and told him he needed to talk directly to Social Security.  Here is his report from his call to Social Security (from France):

After being on hold forever I talked to SS yesterday, the woman did not know the answer but put me on hold and eventually came back and said I had to enroll and pay if I wanted to avoid the penalty.  It did not matter that I am completely covered here.  That is  not the way I read the outline online.  Going to try someone from the Louisiana delegation to see if I can get an answer in writing or email.

**LATEST UPDATE: See a later post with documentation that says Bill does not need to enroll in Medicare Part B because his group health plan, based on a national health plan, is recognized by Medicare as creditable coverage.  Click here for that info.

RETIRED AND LIVING OUTSIDE THE U.S.

Jim and his wife live in Mexico along with tens of thousands of other retired Americans. He is not working, but he and his wife are enrolled with the Mexican national health plan. The answer to his question was….. not clear when I called 1-800-Medicare. The person with whom I spoke could not find a definitive answer, so he took my phone number and said Medicare would get back to me. He told me this was the first time he had been stumped by a question about Medicare.

The eventual answer I got was “yes”, Jim must enroll in Medicare Part B when he turns 65, or he will begin to accrue a penalty of 10% for each year he is not enrolled in Part B. So if Jim returns to the US after 5 years and wants his Medicare Part B, he will pay a 50% higher premium.  At today’s rate, he would be paying $150 per month rather than the standard $99.90

The Medicare rep told me I should call Social Security, since they handle enrollment in Medicare.  The person I spoke with at Social Security was very clear about Jim’s situation in Mexico. She said enrollment in a country’s health plan does not count as creditable coverage. I asked her about employer coverage and she said that would exempt a person from the Part B enrollment requirement – but “Ask Ms Medicare” says this was incorrect information.

Here’s what else I found out:

People living in the U.S. and collecting Social Security when they turn 65  are automatically enrolled in Medicare Part A and B, and receive their Medicare card about three months before their 65th birthday. Medicare figures they want Medicare Part B. (I knew that.)

HOWEVER, people living outside the US who are collecting Social Security are not automatically enrolled in Part B. This is rather odd, since they are supposed to sign up for Part B even though they are living abroad, as explained above. I guess Medicare figures they might not want Part B.

What about Medicare supplements?

Jim in Mexico said he will sign up for Part B and would want a Medicare supplement – but his official address is in Mexico. He is registered with the local US Consulate as being a resident of Lake Chapala.

I know a person must use a physical address (not a P.O. Box) when filling out a Medicare supplement application. And I know Medigap premiums are based on the state in which a person resides. So I emailed a manager for UnitedHealthcare’s AARP Medicare supplements.

This question stumped my UHC contact. He trains brokers who sell their plans, and he always has answers to my questions – but not this one. He emailed me back a few days later with an answer from the UHC compliance department: A person must have a physical address in the U.S. to enroll in an AARP Medicare supplement. They cannot use a relative’s address.

Jim in Mexico cannot tell a Medigap company  he has a primary address in the U.S. because he is registered with the local US Consulate and Social Security as residing in Lake Chapala. So, he can have Medicare A and B  in case he gets really sick and needs to return to the US for care – but he is left with potentially big medical bills because he can’t enroll in a Medigap plan (or a Medicare Advantage plan).

That doesn’t seem right. Jim will be penalized if he doesn’t sign up for Part B. But if he enrolls in Part B, he doesn’t have the option of other Medicare coverage that would protect him from huge medical bills – options other Americans have. It seems like he is being penalized even if he does enroll in Part B.

WHY ISN’T THERE SOMETHING IN WRITING?

This is all very confusing and kind of disturbing. I got one answer from Social Security while Bill in France got a different answer.  And why wouldn’t Bill’s excellent coverage in France not count? Why should Americans working overseas have to pay for something they don’t need – especially when they have coverage that is BETTER than what they would get on Medicare (without paying additional money for a supplement).  And why isn’t this topic addressed in written form so people won’t make a wrong and potentially costly assumption based on what they find in the Medicare & You Handbook?

CLARIFICATION ON ENROLLING IN PART B: Enrolling in Part B is “voluntary”, BUT a person is penalized if they delay enrollment (unless they are working and covered by employer health  insurance. (This employment exception seems to apply only to people who have “american-style” health insurance.)

 

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10 Responses to "Medicare: Living outside the U.S."

  1. This article is full of (unintentional) misinformation. The confusion is over when the “penalty” applies. It is true you must start Part B in the beginning OR you get a penalty if you later apply. That doesn’t mean you MUST sigh up for part B. I live mostly outside the US (France) like the person mentioned in the article. Unlike the person mentioned, I do not work in France. My only health insurance has been a high deducible ($5,000) plan for the last 12 years. Until this year (when I turned 65) I saved for everyday health needs in a Health Savings Account (HSA) and paid cash for all my services. My catastrophic health coverage costs far, far less than a full coverage plan and my plan is even less costly (under $200/month) since I spend a majority of my time outside of the US. I received my “Red White and Blue” (USELESS in France) Medicare card this year and declined the Part B. I will face a penalty if I ever wanted to sign up, which I won’t. Living is France is the best health care choice for me as care is reasonably priced even for me. I can’t join their socialized insurance system but as a healthy person, insurance should be about catastrophic coverage, not nose bleeds, sprains and warts.

  2. Denise_Early says:

    Enrolling in Part B is voluntary, BUT a person is penalized if they delay enrollment unless they are working and covered by employer health insurance. Since I just exchanged emails with an editor at the AARP Bulletin about how I misinterpreted what she wrote, I will change my post to make it clear that “must enroll” is misleading.

  3. Denise_Early says:

    If you visit the US, do you get some sort of temporary insurance in case something happens to you while you are here? And now that you are 65, do you still have the same insurance plan?

  4. Denise_Early says:

    Enrolling in Part B is voluntary, BUT a person is penalized if they
    delay enrollment, unless they are working and covered by employer health
    insurance.

    I added this statement to the post to clarify the line, “Jim must enroll in Medicare Part B when he turns 65, or he will begin to accrue a penalty”.

  5. ceil martin says:

    Terry – your comment about the reasonable cost of health care in France points out the causes of high cost insurance company coverage in the US: commercials due to competition, media and mailing advertising, ceo salaries and other compensation amounting from $3 million to $8 million a year, etc. Health care is profit driven is the US. Recent senior supplemental insurance commercials pointed out that medicare paid only 80% of health care costs for senior citizens (cost $99.90 a month by the way) while their plans would cover the other 20% ( cost from $150 to $225 a month) Most of us just don’t do the math or we’d realize why we are so behind in health as well as health care costs.

  6. Deborah says:

    I’m 67 & live in British Columbia & have medical coverage here. I also have SS & part A Medicare with part B starting in July. I’m interested in adding a medigap plan. Is that possible? I still have a California address, but spend little time there.

  7. Denise says:

    If you have a U.S. address and get mail there, you should be able to get a Medicare supplement. You would also need a U.S. checking account or credit card to pay the premium. Medicare supplement premiums vary a lot from company to company. I am in Arizona and don’t know what the premiums are in California. Some companies let you sign up on-line or over the phone. You would need to compare prices company to company because the plans exactly the same, but each company can charge a different premium. You should do a goodle search for “medicare supplement plans in California”. You can talk to an agent, or the state might have a web site that lists the plans and compares their premiums. Though I’m not sure this kind of unbiased comparison exists.

  8. Logan says:

    Hi,

    Medicare bill states:

    “Every individual who—

    (2) has attained age 65 and is a resident of the United States, and is either (A) a citizen or (B) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the 5 years immediately preceding the month in which he applies for enrollment”

    If I am not a US resident at the time of my enrollment, i.e. living in Germany for example, do I not get Medicare?

  9. Karen McConnaughey says:

    I got into such an argument with a friend, and I wanted to make sure I was correct.

    I am a 72-year-old woman who lives in Mexico. I refused Part B and have never purchased a supplement plan.

    I will be visiting the US for a month. I said I didn’t need travel insurance because I could use my Medicare. I know it will only pay 80% of my expenses and I will have to come up with the 20%.

    She said ‘No…that’s not true; once you move out of the United States, you cannot use Medicare.’ I said, “I know I can’t use Medicare outside of the United States.” She said, “No, I threw away my card, because even if I go back to the US for a trip, I cannot use Medicare and I didn’t want to pay for it.”

    I said “Medicare after age 65 is offered for free; the only thing you pay for is Plan B, and you can refuse that but if you ever decide to get it in the future, it will be more expensive.”

    She still says she can’t use Medicare in the US. I say I can when I’m there for a month if something happens.

    Can you please clarify this for me and make sure I am dispensing the correct information.

  10. Denise says:

    If you don’t have Medicare Part B, you don’t have any coverage for doctor visits, labs, emergency room charges, chemo and radiation treatments.

    And if you delay enrolling in Part B, you will pay a 10% penalty for each year you did not have Part B.

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