Day 14: Step #6, Choosing Health Coverage

Go Local, Go International, Or Go Naked?

Dear Student,

We’ve discussed how to consider and choose among residency options… and I’ve walked you through how to plan for your total tax liability in your new country of residence.

Today, therefore, we’re going to consider the third of the three most important practical issues you should be addressing at this stage of your live- or retire-overseas planning: Health coverage.

Bottom line, you have four options: an international policy, a local policy, a travel policy, or no policy at all.

This fourth option can be more reasonable than it may seem, depending on where you decide to relocate and spend your time. In some countries on my favorites list (Thailand, for example), medical care is so affordable that it can make sense to pay for it as you need it, rather than to insure against it. Most people, though, most places in the world, feel more comfortable knowing that they’re covered in case of medical emergency or, certainly, calamity.

Not everyone is comfortable going naked, as it were.

This means you’ve got to decide whether you want an international policy, a travel policy, or a local, in-country one.

One of the main advantages of an international health insurance policy is that it can cover you under all circumstances anywhere in the world, making it a good option if you intend to travel regularly beyond your chosen overseas haven; if your go-overseas plan is to move around among two or three countries; or if you, like our Intrepid Correspondents Paul and Vicki Terhorst, intend never to relocate anywhere but to roam the world perpetually, discovering and exploring as your wanderlust dictates.

An international policy also can be a good option if you’re an American and intend to divide your time between your chosen overseas haven and the United States, because it can be possible to purchase an international health policy that will also cover you when you return or pass through Stateside.

This is the kind of coverage Lief and I have opted for. Our Bupa International policy, based originally in Ireland but now in Panama, covers us anywhere in the world, including in the United States when we visit. We’re paying extra for this, as the U.S. is the most expensive place in the world to obtain medical care. Given our lifestyles and travel schedules, though, we decided recently to make this additional investment.

All that said, an international health insurance policy has an important downside: It’s more expensive than a local one, perhaps substantially more expensive. Local medical insurance can cost less than US$100 a month. In some countries, depending on your age, less than US$50 a month.

It’s important, though, that you understand what you’re buying. Policy options, details of coverage, deductibles, and premium costs vary dramatically both country to country and agency to agency within a country.

In addition, local insurance providers accept new policyholders only through a certain age that is typically younger than the cut-off age for an international policy. In other words, depending on the country where you’re intending to relocate and your age, a local policy may not be an option. You may have no choice but to invest in a (more expensive) international policy if you want formal health coverage.

Note, too, that some in-country insurance companies allow you to renew your policy only until a certain age. Others offer lifetime coverage.

Bottom line, though, if you qualify, in-country insurance options in some of the world’s top overseas havens can be remarkably affordable.

Uruguay, for example, boasts one of the world’s most affordable in-country options for obtaining medical treatment as a resident here. For around US$50 to US$100 per month, you can obtain hospital-based coverage through two programs, La Asistencial and Sanatorio Mautone. As a member of either of these programs, you are covered for all in-patient treatment, surgery, emergencies, tests, even after-care in your home.

It’s tremendous coverage and an amazing bargain, especially considering the standard of the care. However, you must understand that this is not health insurance, per se, but a hospital-based program, meaning the coverage does not follow you to any other hospital or medical facility within Uruguay and provides no coverage outside the country.

With an international health insurance policy from a carrier like Bupa, on the other hand, once insured, the coverage continues for the rest of your life, as long as you pay the premiums. Bupa can’t deny renewal.

Moreover, Bupa is a big and solid operation. When it comes to health insurance, you may feel more comfortable buying from someone who’s likely going to be around in 10 or 20 years… when you need them.

And, again, perhaps the biggest benefit is that a Bupa policy, for example, is usable anywhere in the world.

Bupa rates vary depending on the country where you’re living. For example, a 60-year-old retired in Panama can get a policy from Bupa, with a US$5,000 deductible, for about US$4,500 a year. That’s US$375 a month. A 70-year-old living in Panama will pay just over US$12,000 for the same policy. That’s US$1,000 a month. Much more costly than local in-Panama coverage but still less expensive than typical U.S. health care.

Here, then, is the thinking you should entertain as you consider your options for health insurance overseas:

First, do you want a local policy or an international one from a company like Bupa? There are pluses and minuses either way.

Second, if you intend to be only part-time in another country, spending only a limited time abroad each year, perhaps what you want is not health insurance but travel insurance.

Finally, depending on where you’re thinking about taking up residence as a foreign expat, you could consider the option of going without insurance, period.

This is a very personal choice. The most important thing is that you can sleep at night. If the thought of going naked, as it were, sounds horrifying, don’t consider it.

However, I know a number of expats who do just that. Since these folks spend most of their time in places where the cost of medical care is extraordinarily low, they don’t worry about insuring against it. Again, Thailand would be a good example.

What’s more, in some countries, once you become a permanent legal resident, you’re eligible for free health care. During our years living full-time in Ireland, for example, we enjoyed medical care at no cost, including coverage for the delivery of our son, Jack. This would be the case in France, too, if you qualify for full-time legal residency.

Which option is right for you? In short:

Local insurance is cheap but limited in its coverage. International insurance is more expensive (though less expensive than comparable coverage in the United States, for example) and should cover you anywhere you travel. What you decide to do depends on your age, your current health status, and your overseas plan. Lief and I carry a Bupa insurance policy with a high deductible. We’re still relatively young and healthy, and we move around a lot, typically in countries where health costs are low, so the high annual deductible isn’t a concern for us. We’ve decided that we don’t mind paying as we go for ordinary medical care (Jackson’s sore throats, for example, and Lief’s two dislocated shoulders). However, we want to be covered in the event of a medical catastrophe anywhere in the world. That’s what our high-deductible Bupa policy allows for.

Most countries have both public and private health care facilities. Public health care systems (also called social security systems in many countries), especially in developing nations, typically offer a lesser standard of care than you are probably accustomed to. If you are traveling to (or living in) a country that does offer private health care, I recommend that as your number-one option for medical and emergency treatment.

If you determine that you’re not comfortable with (or not eligible for) the public health care system in the country where you intend to live or retire, following are your other, paid options.