The Cost Of Medical Care And Health Insurance Living Overseas

“Kathleen, I’ve been reading your newsletter for a long time and love it, as well as loving the idea of retirement overseas. We’ve been spending one month and longer away from the cold Midwest winters for the last four to five years, and this year we are heading to Spain/France for two months, so we’re getting closer.

“My reason for commenting today though was specifically because I just read your articles about the cost of retirement in Algarve, Abruzzo, and Carcassone.

“I didn’t notice any amounts factored in for health care and wouldn’t that be an important expense to include? Medicare certainly wouldn’t cover Americans abroad, so we would have to have some sort of health insurance, correct? Really wondering how much the cost of living would be increased with having to add that in.

“Really love your articles!”

–Mary D., United States

In most cases, the budgets we publish and reference are what we think of as “base budgets.” These include rent, utilities (electricity, gas, telephone, cable, and Internet), groceries, and entertainment (eating out, some local travel, movies where offered, etc.). These costs form the baseline of anyone’s budget living anywhere in the world.

However, as you suggest, these are not the only costs of living. The trouble is that costs beyond this baseline are personal and variable.

One important cost that is very personal and very variable is health insurance. You can choose not to have it. If you’re moving somewhere where health costs are very low, you could pay for day-to-day health care (sore throats, sprained ankles, etc.) out of pocket. This can make a lot of sense living in Southeast Asia, for example, where you can see a doctor for just a few dollars and even some places in Latin America, where, likewise, medical costs are very low. Why insure against the cost of health care if you’re generally healthy and the cost of health care where you’re living is negligible?

If you want health insurance, your options include both local insurance and an international policy (from Cigna, for example). Local health insurance can cost as little as US$50 per policy-holder per month. International insurance is more costly but still much more affordable than U.S. health insurance.

Regardless how you choose to address your health care costs living overseas, we recommend, in the case of an American, that you keep your U.S. Medicare if and when you qualify for that coverage. This can serve as major medical insurance, a backup or security net, as it were, in case of a catastrophic health event (understanding that this would require you to return to the United States for treatment).

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