We here at Live and Invest Overseas receive more questions to do with collecting Social Security and using Medicare while living abroad than we do on any other topic.
When I moved abroad in 2001, at age 49, Social Security and Medicare were far from my mind. I wasn’t old enough for either one.
But today, almost 20 years later, I’ve come to appreciate the importance of these topics.
Let’s clear up a few definitions and misconceptions
Both Social Security and Medicare are administered by the Social Security Administration (SSA), but they’re not the same things.
Social Security Retirement is what we normally refer to as “Social Security.” It’s what you collect sometime after the age of 62, based on what you paid into the program during your working life.
Social Security recipients are eligible for Medicare when they reach age 65.
Social Security Disability Insurance (SSDI) is for those of any age with disabilities. Like Social Security, your eligibility is based on your participation in the Social Security program during your working life.
SSDI recipients are eligible to receive Medicare two years after they are deemed eligible for SSDI.
Supplemental Security Income (SSI) is NOT what we think of as Social Security, although the two are often confused.
SSI is a needs-based program for people with limited income and resources. The program is paid for by general tax revenues, not from the Social Security trust funds. SSI does not qualify you for Medicare, though it often works in conjunction with state Medicaid programs.
“Living abroad,” as defined by the Social Security Administration, applies to those not residing in one of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, or American Samoa… for at least 30 days in a row. If you return to the United States and stay for more than 30 consecutive days, you are no longer considered to be living abroad.
Note that the definition for “living abroad” is different for SSI. I’ll cover that below.
Receiving Social Security while living abroad
As a U.S. citizen, you are still entitled to your Social Security and can receive it while living abroad. The SSA will even direct deposit your check into your local bank account in most countries. Follow the link to see the list of almost 140 countries where direct deposit is available.
The amount of Social Security you receive does not change no matter where you’re living.
Non-U.S. citizens can also receive Social Security payments while living abroad. There are exceptions, based on your country of citizenship, your country of residence, and whether the payments are based on your own earnings or someone else’s.
If in doubt, check out the SSA’s Payments Abroad Screening Tool to see if you are eligible.
If you are not eligible to continue receiving payments, your payments will stop after six full months of living abroad and will resume once you’ve returned to the United States for at least one calendar month.
SSDI follows most of Social Security’s rules
Again, SSDI is an entitlement based on money you’ve paid in. As such, it generally follows the same rules as Social Security.
You are required to tell the Social Security Administration if your disability improves or if you return to work. Generally speaking, they will continue your payments for one year after you’ve returned to work.
Don’t risk using SSI while living overseas
The rules for Supplemental Security Income payments are quite different than for Social Security, or SSDI. You are not eligible for SSI if you move outside the United States, and you cannot collect SSI when living in Puerto Rico.
Generally, if you leave the United States for 30 days or more, you can no longer receive SSI. After you have been outside the United States for 30 or more days in a row, your SSI can’t start again until you have been back in the country for at least 30 straight days.
If you fail to report your move overseas, or make a misleading statement about it, the Social Security Administration can not only fine you and stop your SSI… they can also stop your SSDI and your Social Security retirement benefits.
In all cases, be sure to report your current address to the Social Security Administration. Overseas residents receive mailings that must be returned to the administration, or your benefits may stop.
Using Medicare while living overseas
The bottom line is that you cannot use Medicare outside the United States.
This means that, when moving or living abroad, you need to be sure to factor health care into your plans.
That said, some Medicare Advantage plans will cover you abroad. These are plans offered by insurance companies that bundle Medicare with other insured medical, dental, or vision services.
In addition, some Medigap plans will cover you abroad. These are insurance plans that “top up” costs that Medicare does not pay.
In both cases, coverage is limited to certain situations and to a specified period of time. As a result, Medicare Advantage and Medigap may be fine for emergencies while traveling, but they’re not suitable health care solutions for expats or retirees living abroad.
Should I keep Medicare if I’m living overseas?
This is the core question we receive all the time. I’ll address it according to Medicare’s three parts.
Medicare Part A:
Part A is for hospitalization, and most people are automatically opted into Part A at age 65 if they’re eligible for Social Security.
There is no premium for qualified individuals, so there’s no reason to opt-out of Part A if you’re eligible.
Medicare Part B:
Part B is for doctor, lab, and other outpatient costs for medical services and preventive services. There is a fee for Part B, which is forecast to be US$153 per month for 2021. Part B is accepted by Medicare providers in any geographic location in the United States.
Is it worth keeping Part B when living overseas? It depends on your circumstances.
If you spend significant time in the United States, I’d keep it. Or if you live in a place where it’s feasible to go to the United States for major medical care, I’d keep it just in case.
If, though, you live far from the United States and don’t plan on returning, I’d skip Part B.
For any situation in between, you’ll need to think through the costs and possible benefits… remembering that a single hospital visit while in the United States can be costly.
I recently spent one night in an Arizona hospital, and Medicare covered 100% of the costs. The bill they paid is equal to 23 years’ worth of Part B premiums, so, in my case, the decision to keep Part B was a good one.
Medicare Part C:
This is a term used to describe Medicare Advantage plans. There is a premium for these policies, the amount of which varies with the services offered. Most plans rely on a physicians’ network, which is often tied to a geographic area within the United States.
Generally, Medicare Advantage plans are not worth keeping if you’re living abroad, unless you plan on routinely returning to your network in the States for medical care.
Medicare Part D:
This term refers to Medicare-subsidized drug plans, offered by participating insurance companies.
For most of us, this is not worth having abroad for two reasons.
The first is that Part D plans have a relatively high deductible (US$445 for 2021). Most people—even those who take daily medications—can buy a year’s worth of drugs abroad for less than the Part D deductible.
A few years ago, I used Diclofenac Gel (Voltaren) for sore knees. The list price in the United States was US$66 per tube. The price in Mexico was 145 pesos per tube, about US$7 at the time.
The other reason not to sign up for Part D is that you’d need to return to the United States routinely to pick up your medications. You can’t ship them overseas.
If you’re spending most of your time in the United States and your drugs are expensive (or unattainable overseas), Part D may be worth it. Otherwise it’s not.
Health care options for military retirees
Tricare is a health care regime for military personnel. Those of us of a certain age will remember it as CHAMPUS, which is what it was known as prior to the 1980s.
Unlike Medicare, Tricare is available to retirees who are living abroad. If you plan to use Tricare, be sure you have an authorized provider nearby if your plan requires it. Follow this link to find authorized Tricare providers abroad.
Military retirees can also use military hospitals and clinics, where available. Remember that active duty personnel have priority at these facilities.
Remember these final takeaways
Here are the key summary points to understand about Social Security and Medicare abroad:
- Moving abroad will not affect your Social Security retirement benefits and will not affect SSDI payments…
- SSI cannot be used when living overseas…
- Medicare cannot be used outside the United States…
- Keep Medicare Part A when moving abroad, and do a cost/benefit analysis with respect to parts B and D…
- Report any changes to the Social Security Administration promptly…
- Finally, you can still call the Social Security office from overseas if you have a question about your benefits. From abroad, call +1-410-965-0160 between the hours of 9 a.m. and 4 p.m. Eastern Time.
Part-Time Mexico Expat and Overseas Property Alert Correspondent