Has the Threat of ACA Pushed People Toward Retiring "Overseas"?

[sengsational]

Might those that FIREd, or are planning on it soon, and are a long way from Medicare considering bailing out of the whole obamacare thing by just getting heath insurance and healthcare outside of the US?

For instance, according to Kathleen Peddicord in How to Retire Overseas, you can get HI in Panama for $150/mo with a $300 deductable. She went to the ER for an infected spider bite that set her back a grand total of $70, including an English speaking doctor, blood work and injections. She also talks about "Bupa International" who sells a policy for a 60 year old couple living in Panama for $181/mo that has a $3,400 deductable. If the couple is 70, it's $379/mo.

I'm not saying that those that never considered travel suddenly put this on the list of possibilities, but for folks on the fence, it might make a lot of sense to put ACA into the equation and you might find yourself with an umbrella drink in your hand and much more money in your pocket.

--Dale-

 

[gerrym51]

NO

 

[REWahoo]

No

 

[Gumby]

If you were on the fence about retiring abroad, this might make a decision a little easier, but it's probably too soon to tell whether it will have any wholesale impact. I don't think people understand the issues well enough yet. We are having trouble here on ER Org, and we're generally in the vanguard on things like this.

 

[Accidental Retiree]

Has anyone seen "The Best Exotic Marigold Hotel"? What did the hotel operator call his venture? Outsourcing retirement?

NO, I would not leave the U.S. and retire overseas. DH has mentioned it, but I keep reminding him of the humidity and the mosquitoes.

If I am gonna have all that, I might as well go live in Houston and retire with family.

 

[MichaelB]

Our original "Plan A" was to retire overseas. It was a lifestyle choice, not cost driven, and it still might happen. The cost of healthcare here in the US won't be a factor, though. The destination country would need to be one where I was confident I could access the best health care, not just be assured of a reasonable price. Easier said than done.

 

[george76]

Might those that FIREd, or are planning on it soon, and are a long way from Medicare considering bailing out of the whole obamacare thing by just getting heath insurance and healthcare outside of the US?

For instance, according to Kathleen Peddicord in How to Retire Overseas, you can get HI in Panama for $150/mo with a $300 deductable. She went to the ER for an infected spider bite that set her back a grand total of $70, including an English speaking doctor, blood work and injections. She also talks about "Bupa International" who sells a policy for a 60 year old couple living in Panama for $181/mo that has a $3,400 deductable. If the couple is 70, it's $379/mo.

--Dale-

I very much doubt that either of those two insurance quotes you gave would allow coverage to anybody with a pre-existing condition. With ACA one is now finally allowed coverage even with a pre-existing condition.

I can't speak for anybody else, but ACA will make a huge difference for us in terms of even having the chance of early retirement.

 

[sengsational]

If you were on the fence about retiring abroad, this might make a decision a little easier, but it's probably too soon to tell whether it will have any wholesale impact. I don't think people understand the issues well enough yet. We are having trouble here on ER Org, and we're generally in the vanguard on things like this.

Yep. Too soon to tell. But even though the SO would never dream of it, I still read the health care sections of the Peddicord book a second time, just to make sure I wasn't getting it wrong. It seems to me that the overseas facilities deliver reasonable care for a tiny fraction of what our facilities are able to charge.

How about this for our US people in the US near Toronto or Vancouver: Buy a Buba policy and drive over the border for health care? Might work for people all along any international border. Or you could do your patriotic duty and earn $1 more than the cliff subsidy cliff amount and drop, what is it, 30% of your income into a policy that your current doctor doesn't participate in

 

[Live And Learn]

NO. In fact my ER decision was based upon ACA passing into law. Without it I couldn't have gotten a policy (pre-existing conditions). I'm prepared to pay full freight costs, even though it increases my "success" ratios for my portfolio lasting to age 90 down from 92% to 85%. I'm hoping that DH's employer continues to offer HI but if not I'll deal with the cost of Obamacre.

 

[kevink]

We live full-time in Mexico and like many other expats here consider ourselves mostly U.S. health care and insurance "refugees." My wife and I (56 & 50) have an excellent high-deductible insurance plan that covers us worldwide (though we have to be based outside the U.S.) - 10K deductible, no limits, any doctor or hospital, free second opinion - through Best Doctors and premiums are just over $1300 total per year for the two of us. We could also "go naked" here in Mexico and sleep well at night given costs.

You get very used to being able to call a doctor on their cell phone and see them within a day or two (specialists included), docs that make house calls or take you to the hospital themselves if something serious happens, no nurses, PA's, insurance intermediaries or the like to deal with, spending a relaxed 30-60 minutes with the doctor vs. the standard U.S. rushed run-around, etc.

That said we'd love to feel like we could afford to live in the U.S. but the only likely scenario for doing so would be to move to a State like New Mexico that's signed on for the exchanges and Medicaid expansion in which case we'd be elibible for Medicaid based on our very low taxable income. That'd give us bare bones/catastrophic hospital coverage and for routine stuff (since we are pretty healthy, knock on wood) we'd use a clinic or doctor that's happy to take cash in exchange for not having to deal with paperwork and still get our dental work done in Mexico.

Looking further down the road though there are plenty of reasons to stay here in Mexico, starting with the fact that assisted living in the best places here (Lake Chapala area), of which there are many, run $1100-1400 a month all included, with three meals a day and year-round perfect weather.

If we had it to do over we'd have stayed in the corporate world a lot longer and accumulated the seemingly huge nest eggs most on this board talk about, and that are clearly necessary (absent megacorp health plans) to deal with health care and long-term insurance costs in the U.S.

 

[FIREd]

Perhaps. I agree it's too soon to tell and I will wait until full ACA implementation to make a decision. I don't have a problem with ACA per se and I am not trying to flee the system, but healthcare is darn expensive here and it does not seem like ACA will solve that particular problem for me. The level of care is high in the US, but I think it's a poor value relative to other systems.

 

[kevink]

To be clear, I don't think more than a tiny percentage of retirees, early or otherwise, are going to choose the expat option, but we know many here in their late 50's or early 60's whose savings from dropping high-deductible individual health insurance plans in the U.S. now pay for their food, most of their rent, and all of their out-of-pocket medical costs. Meanwhile Canadians, who make up about half the expat population in this area (which is the single largest expat community in the world) marvel at the brutal choices folks from the U.S. face.

Given the lack of cost containment, the complexities and the parties feeding well at the U.S. healthcare trough under ACA I personally think it's not only not a solution but likely to be so disastrous it will force a second look at single payer since that's clearly what actually works. I don't expect to see that happen in my lifetime, however.

 

[haha]

I personally think it's not only not a solution but likely to be so disastrous it will force a second look at single payer since that's clearly what actually works. I don't expect to see that happen in my lifetime, however.

Some commentors think that is a design feature. ACA may turn into a disaster so rapidly, that single payer will come very quickly, if only to avert bankruptcy

I am not at all sure that would be good, or optimal, but when some statist solution does not work, almost always the next step is never to go toward a more market oriented system, but instead to increase state involvement.

Ha

 

[jon-nyc]

I can't speak for anybody else, but ACA will make a huge difference for us in terms of even having the chance of early retirement.

Indeed, ACA was what enabled ER for me.

 

[sengsational]

I think I see the a trend here for ER's not close to Medicare age. If you have a pre-existing condition (or even if you don't?) and your income is less than the subsidy cliff of 60K or so, you're thinking everything is rosey. If you don't have a pre-existing condition and your income to support your desired lifestyle would put you above the subsidy cliff, you're thinking things are VERY FAR from rosey indeed! I think the folks under the cliff amount might be a little worried, though, that the subsidy number might go down, leaving them with a nest egg they can't spend without triggering the big insurance bill. Or maybe minimum distributions will push them over the line. The curse of living in "interesting times". --Dale--

 

[FIREd]

I think I see the a trend here for ER's not close to Medicare age. If you have a pre-existing condition (or even if you don't?) and your income is less than the subsidy cliff of 60K or so, you're thinking everything is rosey. If you don't have a pre-existing condition and your income to support your desired lifestyle would put you above the subsidy cliff, you're thinking things are VERY FAR from rosey indeed!

My thoughts exactly. If you are a young, healthy ER then ACA does nothing for you unless you live near poverty level or at least keep your income at that level. It is possible mind you to do just that even with millions of dollars in assets.

 

[pb4uski]

No in my case. As long as I can manage my income to stay just slightly below 400% FPL from 2014 to 2020 when I turn 65 and become eligible for Medicare then I should be fine. In fact, my net cost, after subsidy, would be lower than what I pay today and less than half of what I included in my retirement budget prior to retiring. I have a fair taxable portfolio that should last me until Medicare and if not, I would start drawing from my Roths.

 

[sengsational]

I have a fair taxable portfolio that should last me until Medicare and if not, I would start drawing from my Roths.

I imagine a lot of us have about the same amount in Roths (all started at the same time when the law went into effect, maxed-out, and invested in index funds, hehe). I've got more than ten years to go until Medicare, and not all that much in taxable assets, but it's still looking like finagling income would be possible for me, and easier than taking up residence overseas, especially considering DW's (current ) perspective on living abroad.

--Dale--

 

[photoguy]

If you are a young, healthy ER then ACA does nothing for you unless you live near poverty level or at least keep your income at that level. It is possible mind you to do just that even with millions of dollars in assets.

Even if you are young/healthy, ACA completely removes the uncertainty of not qualifying for medical care at a later date. This reduction of uncertainty has substantial value to me, and I imagine to many others.

 

[ejman]

I think I see the a trend here for ER's not close to Medicare age. If you have a pre-existing condition (or even if you don't?) and your income is less than the subsidy cliff of 60K or so, you're thinking everything is rosey. If you don't have a pre-existing condition and your income to support your desired lifestyle would put you above the subsidy cliff, you're thinking things are VERY FAR from rosey indeed! I think the folks under the cliff amount might be a little worried, though, that the subsidy number might go down, leaving them with a nest egg they can't spend without triggering the big insurance bill. Or maybe minimum distributions will push them over the line. The curse of living in "interesting times". --Dale--

If minimum distributions push me over the line... Last time I looked Medicare starts at 65. RMD's start at 70 1/2. I may pay a bit more for Medicare if my income goes over the limits but I think it's just a couple hundred $$$? Please correct me if wrong.

 

[sengsational]

.. Medicare starts at 65. RMD's start at 70 1/2.

You're right. I knew that but wasn't thinking.

 

[FIREd]

Even if you are young/healthy, ACA completely removes the uncertainty of not qualifying for medical care at a later date. This reduction of uncertainty has substantial value to me, and I imagine to many others.

Of course we are not all going to pay the same for that reduction of uncertainty. So YMMV when it comes to "value".

 

[heeyy_joe]

In short, no. A few years from now, I predict there will be many articles noting the the PPACA had an unintended positive effect on the economy because of all the early retirees that gave up their jobs in 2014 & 2015- opening career advancement to younger folks at a stage in life where they spend the extra money they make more so than saving it.

 

[Ed_The_Gypsy]

Our answer is 'maybe'.

It is definitely our Plan C, but there are several important issues.

Pre-existing conditions can bar you from many off-shore HI options. Maybe. If you are on the ground in a foreign country and trying to enroll in the national health system, sometimes they won't even ask, but they can still cancel your enrollment. I have read that this has happened to some retirees in Mexico. I have also read that some have been cancelled later for no apparent reason. Private insurance is more rigid and will reject you up front. Some will take you conditionally with a 1-year waiting period for treatment related to your pre-existing condition, but I have read that their interpretation of what is related may be very broad and leave you high and dry when you need it most.

Age can bar you as well. This is not discussed very often in ER fora, but it was an unpleasant discovery for me. Many national and private HI will not let you sign up after 65 or 70. Not a problem for most ERs, but a show-stopper for us.

For private expat HI, do your research. Some companies are better than others and some have many complaints. Don't let the lowest cost blind you to

I started researching this about 15 years ago in desperation when I realized our situation at the time put us at great risk. Be aware that the terms and conditions change all the time and never to your advantage. As an expat myself, I see these things up close. We made it to Medicare safely last year, but I keep a weather eye on the situation.

MichaelB's comment is very good.

KevinK's is very good as well. The issue of long-term care is a separate issue and I am very interested in it. The Lake Chapala area is on top of my list.

I had not thought of this one. Brilliant!

How about this for our US people in the US near Toronto or Vancouver: Buy a Buba policy and drive over the border for health care? Might work for people all along any international border. Or you could do your patriotic duty and earn $1 more than the cliff subsidy cliff amount and drop, what is it, 30% of your income into a policy that your current doctor doesn't participate in

Sad to say, I am with the cynics on the US public healthcare systems, ACA and Medicare. Sooner or later I am afraid that we the public will be devastated by the actual costs. And, like Ha, I have complete faith that our government will then make even more destructive decisions. Nevertheless, we are participating as it is the best option for us for now.

 

[obgyn65]

No.

Might those that FIREd, or are planning on it soon, and are a long way from Medicare considering bailing out of the whole obamacare thing by just getting heath insurance and healthcare outside of the US?

--Dale-