Retiring Abroad? What You Need to Know About Health Insurance

So you want to pack up all your cares and woes and retire overseas. The world is full of possibilities, from hundreds of thousands of miles of warm and habitable coastline to mountain towns and cosmopolitan cities on six continents.

Your retirement benefits including Social Security will travel to your destination. However, one thing that won’t follow you overseas is your health insurance.

Most U.S. health plans will not cover you overseas, and the few that do will only provide for emergency services. Medicare is also strictly limited to care provided in the United States. Short of heading back to the U.S. for your health care needs, there are lots of options — including paying cash, international insurance, in-country medical insurance, and national health care networks.

The best option for you will depend on where you plan to live and the lifestyle you plan to pursue.

Cash Is King

Paying cash for health care outside the U.S. is not as outrageous as it sounds once you divorce U.S. health care prices from international prices.

For example, the average cost per day of a hospital stay in the U.S. was $4,287 in 2012, compared to $476 in Spain, according to the . The reason is that U.S. retail (cash) costs for health care are wildly inflated and do not reflect the quality of care. If you’re relatively young, in excellent health, and have a comfortable cash reserve, paying cash for health care abroad is a sound option.

International Medical Insurance Policy

If your overseas retirement plan includes lots of travel, this may be your best option. International health insurance policies are structured in the same way as U.S.-based plans, with different levels of coverage and deductible amounts.

For example, annual premiums for plans from for a 62-year-old husband and wife start at $2,260 per year for a plan with a $10,000 deductible. These plans cover routine care, including doctor’s visits and testing, and travel with you from country to country. A median cost for one of these plans for a 62-year-old couple is around $5,500 per year, but it won’t provide coverage if you return to the States.

In-Country Medical Insurance

This is a less-expensive option for international retirees. Like U.S.-based insurance, these plans generally provide coverage through a network of affiliated doctors, hospitals, and other health care providers within the host country.

Plans vary from country to country, but as a rule offer comprehensive health care protection. Costs are about half that of an international policy. You can choose this option and supplement it with travel medical insurance if you plan to travel outside of your base country.

Hospital Insurance Plans

These are the least expensive plans, but they are the most restrictive because all of your care is delivered through a single hospital or hospital network. They will cover everything from routine doctor visits to surgery as well as medications and house calls. These plans can be as inexpensive as $75 per month for a married couple.

When you shop for these plans, look for one affiliated with hospitals situated in multiple cities. Unfortunately, these plans are usually limited to larger cities, so if you plan to live in the countryside you may have to commute for health care.

Nationalized Health Care

All but one of the world’s 33 developed nations have universal health care systems; the exception is the United States. A host of others offer universal health care for senior citizens. In most cases, these health care systems are open to all legal residents of the country.

For example, if you are a British citizen who resides in the United States, you are not covered by the U.K. system when you visit there. However, if you are an American living in England, Scotland, or Ireland, you may be covered by their national insurance plan if you have resident status. Similar rules apply in countries such as Italy. Other countries, such as the popular retirement destination of Ecuador, offer low-cost or free medical care to senior citizens who are legal residents.

Travel Insurance

Overseas retirement is not for everyone, and that includes those who retire overseas.

Travel insurance may be your best bet if you are not sure if you plan on staying permanently, or plan to spend only a portion of the year out of the country. Travel insurance allows you to keep your regular insurance in place in the United States while providing you with coverage in case of emergencies while you’re abroad, even for months at a time. Travel insurance will not cover you for routine medical care or for chronic conditions such as diabetes, but it will protect you in case of emergencies.