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How Medicare Works with Medigap if You Plan to Travel or Live Overseas

How Medicare Works with Medigap if You Plan to Travel or Live Overseas

September 12, 2019

Okay, so now you’re retired! What are you going to do? If you are like many Americans, perhaps you plan to embark on your dream of traveling across the globe. But, as exciting as this can be, there are a few things you need to take care of before you pack your bags and jet away. Possibly the most important item on your to-do list is to find out how you Medicare works with Medigap if you plan to travel or live overseas. It can be a little complex.

Much to the consternation of retirees who have spent lifetimes paying into Social Security, Medicare coverage overseas is almost non-existent except in the most restricted circumstances. While those who simply vacation abroad have access to a policy to bridge this gap, if you plan to live overseas you are somewhat limited. In fact, as more and more Americans retire abroad, they understand that if they don’t plan on returning to the U.S., Medicare is something they may decide to give up. However, before you rush into a decision, make sure you understand your options first. You don’t want to find yourself without critical coverage during an accident or illness if you can avoid it.

How Medicare Works with Medigap for Travel Overseas

If you travel abroad for a few weeks or even extended periods of time, you can supplement Medicare with a Medigap policy. These private insurance plans work in tandem with Medicare and can help alleviate the financial burden of health care expenses you may incur on your trip. Medigap pays medical costs that Medicare Type A typically covers such as copays, deductibles, and coinsurance. It does not pay for vision, dental, hearing aids, or long-term care. This policy can help you save a significant amount of money should you fall ill while you’re on vacation. But, you need to understand how Medigap works with Medicare first.

In order to take out a Medigap policy, you must first be enrolled in Medicare Parts A and B. Medigap policies are offered by private carriers in the state you live in. Keep in mind they only cover one person—so if you’re traveling with your spouse, they need to get their own.

Medigap policies cover 80 percent of certain medical expenses incurred within your first 60 days of travel outside the country provided the charges aren’t eligible for Medicare coverage. The annual deductible you must meet for this coverage to kick in is $250 a year. 

If You Want to Live Abroad

There are a few things to consider here. Medicare won’t cover your costs if you live overseas—you’ll have to look into private coverage or pay into a government-sponsored system of the country you live in. But, if you plan to travel back to America often or return there to live one day, you might consider keeping your Medicare plan in place. Part A is free for most people, anyway. Part B (outpatient services) is required for all Americans once we reach a certain age (unless we are 65 and over and still working). If we don’t pay Part B premiums each month, we face a 10 percent premium penalty for each 12-month period we don’t pay for it.

So, if you ever think you may move back to America, this is something you need to understand. Even if you plan to travel back often, keeping Parts A and B could mean that you can travel back to America for qualified medical care.

If you don’t maintain your Medicare but do move back to the U.S., you’ll have to wait until the enrollment period to pick it back up again. That could mean you go for quite some time without coverage and possibly pay penalties for not carrying Part B during the time you were away. This is why you should weigh your options carefully.

Hopefully you now understand the basics of how Medigap works with Medicare when you are out of the country. This article is meant for informational purposes only, so consult with a trusted advisor and Medigap/Medicare professional to determine how to use Medigap correctly.


Additional reading:

Here are the countries with the most U.S. retirees collecting social security

Retirees Abroad Face Health Care Challenges