International Health Insurance for American Expats: Costs, Coverage, and the Medicare Gap

The $2,434.80 problem

An American who keeps Medicare Part B in 2026 pays $202.90 a month — $2,434.80 a year — for coverage that, almost everywhere outside the United States, pays nothing. Medicare "generally doesn't cover health care while you're traveling outside the U.S.," and the same rule applies whether you're on a two-week vacation or have moved abroad permanently (medicare.gov, "Travel outside the U.S."). Centers for Medicare & Medicaid Services (CMS) guidance is blunt: "In most situations, Medicare will not pay for health care outside the United States and its territories" (cms.gov).

This is not a small edge case. More than 760,000 Social Security beneficiaries already live outside the United States, collectively receiving over $7.5 billion in benefits each year (U.S. Department of State Foreign Affairs Manual, citing the Social Security Administration). Many of them are insured on paper and uninsured in practice — they keep paying Part B premiums for a benefit that stops at the border.

If you're planning to retire, work, or spend extended time abroad, the gap between what Medicare promises and what it delivers overseas is the single most important number in your healthcare budget. Here is how that gap works, and how international health insurance fills it.

What "outside the U.S." actually means

Medicare's definition of "in the U.S." is broader than the 50 states. For coverage purposes, you are considered to be in the United States when you're in any of the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, or the Northern Mariana Islands (cms.gov). A retiree in San Juan keeps full Medicare. A retiree in San José, Costa Rica, does not.

Everywhere else — Portugal, Mexico, Thailand, France, Panama, the expat destinations Americans actually choose — counts as outside the U.S., and standard Original Medicare (Part A and Part B) follows the no-coverage rule.

The three narrow exceptions

Medicare's fact sheet lists a short, specific set of situations where Part A and Part B *may* pay for inpatient hospital, doctor, or ambulance services in a foreign hospital (medicare.gov, fact sheet 11037):

1. **You're in the U.S. when an emergency occurs**, and a foreign hospital is closer than the nearest U.S. hospital that can treat your condition.
2. **You're traveling through Canada by the most direct route**, without unreasonable delay, between Alaska and another U.S. state when an emergency occurs, and a Canadian hospital is closer than the nearest U.S. hospital.
3. **You live in the U.S. and a foreign hospital is closer to your home** than the nearest U.S. hospital that can treat your condition — even for non-emergencies.

Medicare may also cover medically necessary care on a cruise ship if the ship is in a U.S. port or within six hours of arriving at or departing from one (medicare.gov). Physician and ambulance services tied to a covered foreign hospitalization are included, and beneficiaries file for reimbursement using CMS Form 1490S (cms.gov).

Look closely at those exceptions and you'll see what they have in common: every one assumes you live in the United States and are briefly near a border or coast. None of them help an American who has actually relocated abroad. For an expat in Lisbon or Chiang Mai, the practical coverage from Original Medicare is zero.

Medigap's foreign-travel benefit — and its low ceiling

Medigap (Medicare Supplement) plans add one genuine overseas benefit, but it's a thin one. Plans C, D, F, G, M, and N include foreign travel emergency coverage that pays **80% of eligible charges after a $250 annual deductible, up to a $50,000 lifetime maximum**, and only for emergency care that begins during the **first 60 days** of a trip (medicare.gov).

Three limits make this unsuitable as primary coverage for someone living abroad:

• **It's emergency-only.** Routine care, chronic disease management, and follow-up visits aren't covered.
• **The 60-day window** means it's designed for travelers, not residents.
• **$50,000 is a lifetime cap, not an annual one.** A single serious hospitalization — a cardiac event, a major orthopedic surgery, a cancer course — can exhaust it permanently.

Medigap is a reasonable backstop for retirees who live in the U.S. and travel internationally. It is not a plan for living overseas.

Medicare Advantage and Part D abroad

Some Medicare Advantage (Part C) plans add worldwide emergency or urgent-care benefits — often mirroring the Medigap structure of 80% coverage after a $250 deductible with a $50,000 lifetime cap. But Medicare Advantage carries a hard residency rule: if you're outside the U.S. for **more than six months**, you can be disenrolled and returned to Original Medicare (medicareinteractive.org, summarizing CMS rules). These plans are built around local U.S. provider networks and were never designed for expat life.

Part D prescription drug coverage is even simpler: it does not work outside the United States at all. Drugs you buy abroad aren't covered, which matters because medication is one of the most common ongoing health costs for older expats.

Should you keep paying Part B at all?

This is the decision that trips up the most people, because the answer depends on whether you might ever move back.

If you drop Part B while living abroad and later return to the U.S., you face a **permanent late-enrollment penalty: your premium rises 10% for each full 12-month period you were eligible for Part B but didn't have it** (medicare.gov). Skip it for six years, return at 71, and you'd pay a 60% surcharge on top of the standard premium for the rest of your life.

The trade-off looks like this:

• **Keep Part B** ($2,434.80/year in 2026, more for higher earners — the income-related adjustment kicks in above $109,000 in modified adjusted gross income for single filers and $218,000 for joint filers) and you preserve a penalty-free safety net for returning to the U.S. for treatment. But you're paying for coverage you can't use where you live.
• **Drop Part B** and you save the premium, but you bet you'll never need to return to the U.S. healthcare system — a bet that gets riskier as you age.

Many expat advisors suggest a middle path: keep Part A (which is premium-free for most people who paid Medicare taxes for 40 quarters) so the U.S. option stays open, and make the Part B decision based on how realistic a return actually is. There's no universally correct answer — only a calculation specific to your finances, your health, and your ties to the U.S.

What international health insurance actually costs

Because Medicare won't follow you, expats fill the gap one of two ways: enrolling in the **local national or private health system** of their new country, or buying an **international private medical insurance (IPMI)** policy that covers them across borders. Many people use both.

The price of IPMI varies widely, driven mostly by age, region of coverage, and whether the plan includes the United States:

• **Worldwide-excluding-USA coverage** averages roughly **$2,517 per year** for an individual in 2026 (William Russell, *How Much Does Expat Health Insurance Cost?*). Comprehensive worldwide plans commonly run **$5,000–$6,000** a year.
• **Plans that include U.S. coverage cost far more** — often **$10,000 to $28,000+** annually for an individual — because American medical prices are among the highest in the world.
• **For North America specifically**, individual premiums commonly fall between **$3,000 and $7,000** a year, while family coverage can reach **$10,000 to $20,000**.

Two design choices move the price the most. First, **geographic scope**: a policy that excludes the U.S. can cost a fraction of one that includes it, so if you don't plan to seek care stateside, excluding it saves substantial money. Second, **age and pre-existing conditions**: premiums climb steeply after 60, and pre-existing conditions may be excluded, surcharged, or subject to waiting periods.

Local coverage is often dramatically cheaper. Several popular destinations let legal residents buy into public or regulated private systems at a fraction of IPMI prices — but quality, wait times, and access for non-citizens vary by country, and some plans won't accept new enrollees past a certain age. A common expat strategy is to use affordable local insurance for routine care and a leaner international policy for serious treatment or evacuation.

A residency requirement many expats miss

Proof of health coverage isn't optional in many countries — it's a visa condition. Numerous residency and long-stay visas (across the EU's Schedule of approved categories, and in destinations from Spain to Thailand) require applicants to show private health insurance meeting a minimum coverage amount before a permit is granted. Because Medicare doesn't count as valid coverage abroad, an international or local policy is frequently the document that makes the visa itself possible. Confirm your destination's specific minimum before you assume Medicare or a U.S. plan satisfies it — it almost never does.

Practical takeaways

• **Treat Medicare as U.S.-only.** Budget for separate coverage from the day you move. Don't assume Part B, Medigap, or Medicare Advantage will help with day-to-day care abroad.
• **Run the Part B math before you go.** If returning to the U.S. is realistic, weigh the 10%-per-year permanent penalty against the premium you'd save. Keeping premium-free Part A preserves options at little cost.
• **Get IPMI quotes that match your real plan.** Exclude U.S. coverage if you won't use it — it can cut the premium by more than half. Price it at your *current* age; premiums rise sharply each decade.
• **Check pre-existing-condition terms in writing.** Ask specifically about exclusions, waiting periods, and whether coverage is renewable for life.
• **Confirm your visa's insurance minimum first.** The coverage amount required for residency may dictate which policy you buy.
• **Layer local + international.** Cheap local insurance for routine care plus an international policy for hospitalization and medical evacuation is often the best value.
• **Keep the CMS-1490S form in mind** only for the narrow border/cruise exceptions — it won't help with care where you actually live.

Next steps

Start with two phone calls and one quote. Call 1-800-MEDICARE (1-800-633-4227) to confirm your exact Part B status and what dropping it would mean for your return-to-the-U.S. penalty. Contact your destination country's consulate or immigration site to get the precise insurance minimum required for your visa category. Then request at least three IPMI quotes — one excluding the U.S., one including it, and one matched to your visa's minimum — so you can see the real spread before committing.

The expensive mistake isn't choosing the wrong international plan. It's discovering, in a foreign emergency room, that the $2,434.80 you paid Medicare this year buys you nothing on this side of the border. Plan for that gap before you cross it.