One of the many benefits of living in Mexico as an expat is the generally excellent level of medical care and the comparatively low cost of healthcare in the country. It is one of the key reasons more and more Americans, Canadians and retirees from other countries are choosing Mexico as a place to live. The cost of medical care in Mexico is low, but what are your options?
Savings on prescriptions and doctor visits compared to the U.S. can be as high as 50 percent, or more in some circumstances. But once you turn 65, getting health insurance to cover you in Mexico presents difficult challenges that require careful thinking and research to resolve.
Many expats living in Mexico purchase private health insurance plans sold by companies in Europe and the U.S. for coverage while living abroad. Premiums can be very reasonable, especially if the plan is restricted to medical costs anywhere outside of the U.S. But once you reach 65, premiums start to rise and by 70, most expats may find these private health insurance policies way too expensive.
Medicare and Medigap Coverage
Americans enjoy the benefit of eligibility to enroll in Medicare Parts A and B on their 65th birthday. Part A, which is free, covers hospitalization. Part B covers out-patient doctor visits for a monthly premium of US$140 in 2020. Parts A and B, however, do not reimburse any medical costs incurred outside of the United States, and failure to enroll in Part B within three months of your 65th birthday carries a significant financial penalty if you decide to enroll later in life.
Most seniors also purchase Advantage or Medigap plans that pay for deductibles Parts A and B do not cover and see this extra coverage as essential given sky-rocketing medical costs in the U.S.
A typical Medigap plan costs between US$89 and US$160 per month in the U.S. in 2020, and you must sign up within three months of your 65th birthday to avoid premium increases due to pre-conditions. Some Medigap plans have the extra advantage of providing a lifetime benefit of US$50,000 for emergency medical expenses incurred outside of the U.S. That means if you need emergency medical care while living in Mexico you can file a claim. But services must be provided within the first 60 days of leaving the U.S. That means you must provide proof of purchase of airline tickets for the period coinciding with your claim in order to get reimbursement.
Americans living in Mexico who sign up for Medicare must provide a U.S, address and state, under penalty of law, they live in the United States. If Social Security decides to investigate, which is rare, the penalty for lying includes a jail term and a fine of $250,000. All of this leaves seniors from the U.S, living in Mexico in a somewhat difficult situation.
They can sign up for Medicare and an Advantage or Medigap plan providing a U.S. address, pay the monthly premiums and return to the U.S. for their major healthcare needs. But the cost of traveling to and from the U.S. can add up. And, if you have a chronic condition that requires regular hospital or doctor visits, relying on Medicare while living in Mexico may not be a viable option.
Also consider that you may find yourself in a situation where you are too ill or injured to travel. Commercial airline flights do not allow visibly ill people to fly. If you are relying on Medicare as a primary source of major medical care, you should also consider a backup plan such as public insurance in Mexico (see below) or medical evacuation insurance.
Limited Insurance Options in Mexico
Private health insurance policies for seniors living in Mexico are available, but they are expensive, especially if you decide you also want to carry your Medicare coverage at the same time.
For example, one plan offered by Redbridge, located in Coral Gables, Florida, provides coverage in both Mexico and the U.S. with a US$5,000 annual deductible and an annual premium of US$3,936. It sounds reasonable, but on top of the cost of having Medicare you are looking at annual premium costs well above US$5,000. Redbridge also offers an expat plan with a US$10,000 deductible and a US$3,186 monthly premium. Coverage, however, is limited to inside Latin America.
Another option from VIP Universal Medical Insurance Group offers senior expats coverage anywhere in the world for a US$5,000 annual deductible and an annual premium of US$4,580.
These policies, however, may not provide an acceptable solution for most expat seniors living in Mexico, especially since premium increases due to pre-conditions and ageing will make them unaffordable for many of us.
Universal Care in Mexico
Expats with legal residency in Mexico can opt to enroll in one of Mexico’s publicly funded insurance programs. One is known by its initials IMSS (Instituto Mexicano del Seguro Social). It is the plan that covers working people in Mexico. However, retirees and other expats can apply. The application process, though, can be daunting. You must provide a valid, notarized birth certificate. There is a small annual premium if you are not employed by a Mexican company full-time. And once you are over the age of 60, there are waiting periods for some pre-conditions and no coverage for others. But for just a few hundred dollars a year you will have access to IMSS hospitals, and specialized clinics and physicians, wherever you are in the country.
Instituto Nacional de Salud para el Bienestar (INSABI) is another public program that covers those who are not employed traditionally in Mexico. Replacing the former Seguro Popular program, this program is 100 percent free and the application process is less complicated than that of IMSS, requiring only a CURP (Clave Única de Registro de Población, Mexico’s version of a Social Security or Social Insurance number). It typically covers pre-existing conditions. The choice of INSABI or IMSS is best made locally based on feedback from local expats who can tell you whether the facility is overcrowded or not and how modern the facility is.
Expats who are used to hospital and doctor visits in the U.S., Canada or Europe, however, may be in for a bit of a shock. While the care offered to the public is excellent, Mexico’s healthcare infrastructure is not always up-to-date and wards are common. Walk into a typical public hospital and it may feel like stepping well back in time, and even more so at smaller hospitals in rural areas. You may encounter shortages of critical supplies and nursing care is far more limited. For Mexicans, it is also common practice for a family member to remain with a patient at all times and provide the bulk of personal care. And you may find that speaking Spanish is essential since care staff is unlikely to speak any English.
An American friend living in Mexico City broke his arm in a bicycle accident in 2019. He had no private health insurance and relied on IMSS for care. The fracture required surgery, but he had to wait almost a week to get the operation. However, it might have been a longer wait in Canada, and many expats in Mexico have had very good care within the public system.
The Self-Insurance Option
Self-insurance is simply paying your own medical expenses out of savings. While the cost of medical care in Mexico is generally much lower than the U.S., private hospital care can still be expensive, especially compared with the public healthcare options. One or two hospital stays may make you wish you had joined IMSS or INSABI as your backup plan. Payment must be made in cash or using a credit or debit card before you will be released from the hospital.
Constructing Your Best Solution
One solution for American expat seniors living in Mexico is to sign up for Medicare Parts A and B, purchase a Medigap policy and pay for doctor visits in Mexico out-of-pocket. Then return to the U.S. for major medical care that will be covered by Medicare.
The cost of prescriptions also is so much lower in Mexico, so purchasing a drug plan to cover the so-called “donut hole” for seniors in the U.S. may not be necessary. And if you travel back and forth from the U.S. several times a year, your plane tickets may allow you to get Medigap reimbursement for emergency care at Mexico’s many world-class private hospitals since some plans pay for emergency treatment within 60 days of leaving the US. It might be more economical to put your money into buying plane tickets than private insurance.
And if you are going to depend on Medicare, you will definitely need a good emergency medical evacuation plan. If you are sick or injured you will not be allowed on a commercial flight. Readily available to seniors living in Mexico, these policies will fly you either commercially or in a private jet, depending upon your condition. Some plans will fly you to the hospital of your choice in the U.S. The annual premium is approximately US$600 per year.
If you are planning to retire in Mexico, are retired in Mexico or live here full-time, you have medical care options to consider. A lot depends upon your financial status and health, but the cost of medical care in Mexico will help make your decision a little easier.