Medicare Coverage Abroad: What Expats Need to Know

Introduction

Medicare, the federal health insurance program for Americans 65+, provides virtually no coverage for medical expenses incurred outside the United States. This creates a significant gap for American expats and retirees living abroad.

Understanding Medicare's limitations—and your options—is essential before relocating. The decisions you make about Medicare enrollment can affect your coverage and costs for years.

What Medicare Covers Abroad

Standard Medicare (Parts A and B)

Medicare generally does not pay for healthcare outside the US. Three narrow exceptions exist:

1. **Emergency in Canada/Mexico while traveling between Alaska and lower 48 states**
2. **Emergency when foreign hospital is closer than US hospital** (border areas)
3. **On a cruise ship within 6 hours of US port** (limited)

These exceptions are rarely applicable for expats living abroad.

Medigap Foreign Travel Emergency Coverage

Some Medigap plans (C, D, F, G, M, N) include foreign travel emergency coverage:

• **Coverage:** 80% of costs after $250 deductible
• **Lifetime maximum:** $50,000
• **Duration:** First 60 days of each trip
• **Limitations:** Emergency care only, not routine

This provides a safety net for short trips but is insufficient for those living abroad.

Medicare Part D (Prescriptions)

Part D does not cover prescriptions purchased from international pharmacies. Medications must be filled at US pharmacies to be covered.

Keeping Medicare While Abroad

Part A (Hospital Insurance)

**Cost:** Free if you or spouse paid Medicare taxes for 40+ quarters **Recommendation:** Keep it—no cost, provides coverage during US visits

• Coverage resumes immediately
• Helpful for emergency visits home

Part B (Medical Insurance)

**Cost:** $185/month standard premium (2025), higher for high earners **Decision factors:**

• You plan to return to US within a few years
• You return frequently for medical care
• You can afford the premium

• You're settled abroad permanently
• Premium is significant burden
• You have other coverage for US visits

• 10% premium increase for each 12-month period you could have had Part B but didn't
• Penalty is permanent
• Can only enroll during General Enrollment (Jan 1 - Mar 31)

Part D (Prescription Drug)

**Cost:** Varies by plan (average ~$35/month) **Penalty for late enrollment:** 1% of national base beneficiary premium per month without creditable coverage

**Consideration:** If you have prescriptions you refill during US visits, maintaining Part D may be worthwhile.

Alternatives for Healthcare Abroad

International Health Insurance

Primary option for expats. Covered in detail in our International Health Insurance guide.

• Costs: $200-$800/month depending on age
• Covers routine and emergency care abroad
• Can include US coverage as add-on

Local Public Healthcare

Many countries provide healthcare to legal residents:

• Spain: Access after 1 year of legal residency
• Portugal: Access after establishing residency
• Costa Rica: CAJA system open to residents (~$100/month)
• Mexico: IMSS available to permanent residents

**Quality varies:** Research specific country before relying on public system.

Local Private Insurance

• Mexico: $200-$400/month for comprehensive coverage
• Spain: €50-€150/month
• Portugal: €50-€100/month
• Thailand: $100-$300/month

Limitations: Usually covers only that country.

Decision Framework

Scenario 1: Recently Retired, Trying Abroad

• You may return
• Late enrollment penalties are permanent
• Provides safety net for US visits

Scenario 2: Established Abroad, Unlikely to Return

• Keep Part A (free)
• Evaluate Part B cost vs. benefit
• International insurance as primary coverage

Scenario 3: Return Annually for Extended US Visits

• Use Medicare during US stays
• International insurance for abroad

Returning to the US

If you dropped Part B and return permanently:

1. **General Enrollment Period:** January 1 - March 31 each year
2. **Coverage starts:** July 1 of that year
3. **Gap coverage needed:** January - June
4. **Penalty applies:** 10% per year without Part B

Special Enrollment Period

• Had group health coverage through employer
• Lost coverage due to qualifying event

Note: International insurance typically doesn't qualify for Special Enrollment.

TRICARE and Veterans

TRICARE Overseas

• Limited to certain areas
• Requires enrollment in TRICARE Overseas
• Coverage varies by location

VA Healthcare

Veterans must receive care at VA facilities (almost all in US). No coverage for foreign providers except emergency care in limited circumstances.

Key Takeaways

• Medicare Parts A, B, D provide essentially no coverage abroad
• Keep Part A (free); carefully evaluate keeping Part B ($185/month)
• Part B late enrollment penalty: 10% per year without coverage
• International health insurance is primary coverage for expats
• Many countries offer local public or private healthcare options

Next Steps

1. Verify your Medicare enrollment status at Medicare.gov
2. Calculate Part B costs vs. potential penalty if you drop
3. Research healthcare options in destination country
4. Get international health insurance quotes
5. Plan for coverage during any US visits