How Will Obama Care Affect American Expats?

[SkyRider]

Will they be able pay into Obama care and receive treatment while living abroad?

[ScubaBuddha]

A complicated question with a complicated answer:

http://www.hrreview.co.uk/analysis/analysis-health-safety/expatriate-medical-insurance-concerns-in-the-era-of-obamacare/13138

I still think that it's absurd that I had to move to a developing country to get national healthcare.

[SkyRider]

Thank you ScubaBuddha.

[maxman71]

Item #4 in the linked article:

4. As in years past, all U.S. citizens living abroad, whether they have dual citizenship or not, will be required to file normal U.S. taxes. As a result of the US Healthcare Reform, a new IRS code has been added (Section 5000A (f)(4)), which states simply that U.S. Expatriates will be treated as having the minimum essential coverage under the new law. They may be exempt from the coverage mandate, if they are already eligible for the IRS foreign income exclusion which currently stands at earnings up to USD 91,000.

A key requirement to meet this exclusion and exemption from the coverage mandate is to be out of the US at least 330 calendar days a year.

I'm not sure why anyone would want to participate voluntarily in ObamaCare if they meet this exclusionary provision. Health care in Thailand is in many ways as good, if not better, than care in the US and many other Western countries. If there are those who actually believe the US gov't can manage to provide decent health care at a reasonable cost to the number of people they are planning on covering under ObamaCare, you may want to check your meds. ObamaCare is yet another massive budget-buster and debt bomb in the making.

I pay out of pocket for health care in Thailand and have been doing so for the last 6+ years, and have spent a grand total of about USD 500 over those 6 years. One obvious reason for the low cost is health care in Thailand is subsidized by the 7% VAT and other taxes, of which I pay into as a Managing Director of a Thai Ltd. Co. in the form of VAT, company and personal income taxes paid to the Thai gov't. Another reason is medical professionals, including doctors, are not paid as high in Thailand relative to their US/Western counterparts. In the US, doctors are treated like royalty and well-protected by the AMA, which is a very powerful lobbying group in US politics, and they get their bang for their bucks spent greasing the pockets of the US Congress. The same is true of the US legal profession and big pharmaceutical companies. Thailand also does not have a bloated police-the-world military budget as the US does and the US also has extensive and ever more costly other entitlement programs that are out of control. So now Obama and the Democrats want to further burden the US taxpayer with this smoke and mirrors HealthCareLess program before the US gets their financial house in order??? Absurd.

The key factor to good health is your own personal responsibility and accountability to take proper care of yourself. I say before you go looking for a health care "entitlement" program, take a hard and sober look at the state of your own physical health, and if it is not up to par, i.e. obesity, smoking, drug abuse, abusing alcohol, etc., then perhaps you should join a good gym, make good use of it, get on a sensible diet, lose the excess flab, quit smoking, etc. We all owe it to society as well as ourselves to assume this responsibility seriously before we go whining to Mommy Government to fix our own lack of personal responsibility, accountablity and discipline. At 52+ years old, I am in much better shape than most guys 1/2 my age as a result of a disciplined and robust exercise, diet, proper rest, etc. Oh yeah, I once was 100 lbs. overweight some years ago and practiced what I preach above. It is very much doable.

[SkyRider]

Thank you so much for that great information maxman71.

[lanny]

Item #4 in the linked article:

4. As in years past, all U.S. citizens living abroad, whether they have dual citizenship or not, will be required to file normal U.S. taxes. As a result of the US Healthcare Reform, a new IRS code has been added (Section 5000A (f)(4)), which states simply that U.S. Expatriates will be treated as having the minimum essential coverage under the new law. They may be exempt from the coverage mandate, if they are already eligible for the IRS foreign income exclusion which currently stands at earnings up to USD 91,000.

A key requirement to meet this exclusion and exemption from the coverage mandate is to be out of the US at least 330 calendar days a year.

That is only 1 of 2 ways to meet the exclusion requirements. If you are a "bona fide" resident of a foreign country, you do not need to meet the 330 day rule. This is a tax definition, not a legalistic one, and depends on the facts and circumstances for each individual. Usually, one test is whether or not you pay income tax in the country.

[samran]

Generally a good post, but.....

The key factor to good health is your own personal responsibility and accountability to take proper care of yourself. I say before you go looking for a health care "entitlement" program, take a hard and sober look at the state of your own physical health, and if it is not up to par, i.e. obesity, smoking, drug abuse, abusing alcohol, etc., then perhaps you should join a good gym, make good use of it, get on a sensible diet, lose the excess flab, quit smoking, etc. We all owe it to society as well as ourselves to assume this responsibility seriously before we go whining to Mommy Government to fix our own lack of personal responsibility, accountablity and discipline. At 52+ years old, I am in much better shape than most guys 1/2 my age as a result of a disciplined and robust exercise, diet, proper rest, etc. Oh yeah, I once was 100 lbs. overweight some years ago and practiced what I preach above. It is very much doable.

How does all this help if you are hit buy a truck, suffer from an accident no fault of your own, or get cancer? Or just get old (and have everything that comes with that?)

These are some of the many reasons why most governments opt for national health programmes.

[citizen33]

How does all this help if you are hit buy a truck, suffer from an accident no fault of your own, or get cancer? Or just get old (and have everything that comes with that?)

These are some of the many reasons why most governments opt for national health programmes.

Have to agree with Samran on this. The real clincher is what happens when you get old. There are very few systems - even the pre-Obama US - that leave this to private insurance because indemnity-based insurance will seek to exclude high-risk individuals. Typically even systems with a significant role for private health insurance (e.g. the Netherlands) have a separate (non-profit, state guaranteed) scheme for older people. They really need a system that pools risk and most of those are either provided or overseen by governments. If you say you will self-insure (i.e pay out-of-pocket), you are either very rich or willing to gamble with your future. This is the situation of many expats in the Kingdom, who even if they have had their private plan for years are likely to see premiums going through the roof after about 75.

Edited August 12, 2011 by citizen33

[Galong]

The same people who call this Obamacare are the same people who blame Obama for the way the recent childish debt ceiling argument turned out in spite of the fact that John Boehner bragged that his team got 98% of what they wanted. Since WHEN does getting 2% of something make you the champion of anything?

So, why do you call it Obamacare? The original package was watered down so heavily that Obama's original programs doesn't resemble what was asked for. Both parties honestly should be ashamed of what they got... of course, the lobbyists won again. Besides, who needs anything to do with crappy over-priced American healthcare services when Thailand offers a superior product?

As someone with a pre-existing condition (rare lung disease) who couldn't get health insurance in my totally uncompassionate home country even if I was willing to buy it, I have nothing but the highest praise for what exists here.

Edited August 12, 2011 by Galong

[Cattracks]

Galong, Maxman71

My question is, if you don't mind me asking? I've been working in the Mid-East for the last 6 years, own a home and plan on living out my life in Thailand. As I read this, it sounds as though it is possible to get Health Insurance in Thailand for myself? I'm 56 and in very good health but, there will be a time..........

I was planning when I finish up here in Afghanistan (Jan. for good) to go with the Spouse Visa rather than a retirement Visa (not sure why) and have wondered for a while now if there was a reasonable way to get health coverage.

Thanks, Mr. Tom

[IMA_FARANG]

This is an old topic...but just let me add a couple of points from my personal experience.

The first is about medicare/ medicaid. Benefits for this are only available in the U.S. So do not count on medicare/medicaid benefits being available if you retire in Thailand.

One practical reason is that you can not find any doctor or hospital in Thailand willing to accept medicare/medicaid for treatment. They simply have to many problems getting payment approved by the U.S. government for health services here in Thailand.

So, U.S. retiress here in Thailand can basically forget about medicare/medicaid.

When you turn 65 you will be involuntarily enrolled in Part B medicare. My current premium is $115.65 a month and will be deducted from my Social Security monthly pension. This is irregardless of what you select when you file your retirement. I specifically did not elect medicare/medicaid coverage when I retired at age 64. When I reached age 65 I was apparently enrolled in medicare/medicaid against my choice. I am now trying to get that $115.65 monthly back...but it doesn't look promising.

Secondly, on your $90,000 overseas tax exception.

There are two ways to get this excemption.

One is to be a legal resident in a foriegn country.

I will tell you right now that as a U.S. retiree living in Thailand on a "retirement visa" the IRS will dispute that you have legal residence in Thailand.

As a retiree living in Thailand the IRS will not allow you to claim legal residence in Thailand UNLESS you obtain Thai permanent residence status. Merely living full-time as a retiree in Thailand is not permanent residence, and if you try to claim that the IRS will fight you tooth and nail.

I've been there and done that.

The second method of obtaining that $90,000 tax excemption is to work for an american company oerseas and be otside the U.S. for 330 days...BUT note very carefully the exact requirements as follows:

1. You must work for an american company overseas. I will tell you right now the IRS will not accept that if you are a retiree as by their definition as a retiree you are NOT working. End of story as far as they are concerned.

2. You must be outside the U.S.for a minimum of 330 days during a tax year. A tax year runs from 1 January xxxx to 31 December xxxx. In order to qualify for the full 90,000 tax excemption you must have 330 days outside the U.S for that excemption during that tax year. If you work only 150 days in that tax year you must pro-rate that tax ecemption. The amoungt of tax excemption is that pro-rated figure. The IRS kindly tells you how to compute that lower figure.

But don't bother, because as I explained above, as a retiree the IRS won't allow you to claim that excemption anyhow because you are not working.

I've fought or am fighting these battles already. That's why I have experience with them.

And finally, as an American retiree living in Thailand your Social Security pension is not reimburstment for working and living abroad, it is pension paid by the U.S. government (Social Security) and therefore is subject to the same income tax as would be paid by a retiree living in the U.S. drawing Social Security at the same level.

Edited October 21, 2011 by IMA_FARANG

[OriginalPoster]

This is an old topic...but just let me add a couple of points from my personal experience.

The first is about medicare/ medicaid. Benefits for this are only available in the U.S. So do not count on medicare/medicaid benefits being available if you retire in Thailand.

One practical reason is that you can not find any doctor or hospital in Thailand willing to accept medicare/medicaid for treatment. They simply have to many problems getting payment approved by the U.S. government for health services here in Thailand.

So, U.S. retiress here in Thailand can basically forget about medicare/medicaid.

When you turn 65 you will be involuntarily enrolled in Part B medicare. My current premium is $115.65 a month and will be deducted from my Social Security monthly pension. This is irregardless of what you select when you file your retirement. I specifically did not elect medicare/medicaid coverage when I retired at age 64. When I reached age 65 I was apparently enrolled in medicare/medicaid against my choice. I am now trying to get that $115.65 monthly back...but it doesn't look promising.

Secondly, on your $90,000 overseas tax exception.

There are two ways to get this excemption.

One is to be a legal resident in a foriegn country.

I will tell you right now that as a U.S. retiree living in Thailand on a "retirement visa" the IRS will dispute that you have legal residence in Thailand.

As a retiree living in Thailand the IRS will not allow you to claim legal residence in Thailand UNLESS you obtain Thai permanent residence status. Merely living full-time as a retiree in Thailand is not permanent residence, and if you try to claim that the IRS will fight you tooth and nail.

I've been there and done that.

The second method of obtaining that $90,000 tax excemption is to work for an american company oerseas and be otside the U.S. for 330 days...BUT note very carefully the exact requirements as follows:

1. You must work for an american company overseas. I will tell you right now the IRS will not accept that if you are a retiree as by their definition as a retiree you are NOT working. End of story as far as they are concerned.

2. You must be outside the U.S.for a minimum of 330 days during a tax year. A tax year runs from 1 January xxxx to 31 December xxxx. In order to qualify for the full 90,000 tax excemption you must have 330 days outside the U.S for that excemption during that tax year. If you work only 150 days in that tax year you must pro-rate that tax ecemption. The amoungt of tax excemption is that pro-rated figure. The IRS kindly tells you how to compute that lower figure.

But don't bother, because as I explained above, as a retiree the IRS won't allow you to claim that excemption anyhow because you are not working.

I've fought or am fighting these battles already. That's why I have experience with them.

And finally, as an American retiree living in Thailand your Social Security pension is not reimburstment for working and living abroad, it is pension paid by the U.S. government (Social Security) and therefore is subject to the same income tax as would be paid by a retiree living in the U.S. drawing Social Security at the same level.

Re: "You must work for an american company overseas" - the "work" part is right because the exclusion is only for earned income and not for investment or pension income. However it doesn't need to be an American company that you work for, you can also work for a foreign company or you can be self-employed (as a consultant, for instance).

Edited October 21, 2011 by OriginalPoster

[Cattracks]

Thank You, all good information however, I'm done working as of Jan., well, other than our tree farm. I was just wondering (now, prior to 65) if there is a reasonable way to get health insurance as a Farang living in Thailand?

Now then Gentlemen and it's almost too late for me, is there an advantage/ disadvantage in filling out your 1040 and using your Thai address as resident or should one keep a state side address to use on the 1040 as residence? I've pondered this one now for the last three years but, have done so well on my returns using the Overseas Tax exemption that I have been afraid to change it, that I was worried that it might effect my Social Security when I filed.

Sorry, not up on this stuff as I guess I should be.......

Mr. Tom