What The Health Care Overhaul Means For Americans Abroad

[threelegcowboy]

http://bucks.blogs.n...ericans-abroad/

March 23, 2010, 11:19 am

What the Health Care Overhaul Means for Americans Abroad

By JENNIFER SARANOW SCHULTZ

On Monday, Times reporters answered reader questions about how the health care overhaul will affect consumers. But one reader question that remained unanswered was how the legislation will affect Americans abroad. Here’s the answer.

According to Tom Rose, chairman of the Association of Americans Resident Overseas‘ Committee on Social Security and Medicare, the legislation doesn’t have any effect on Americans abroad, except that it exempts them from the penalty for not subscribing to health insurance in the United States. “That is only logical as most Americans abroad have coverage in their country of residence,” Mr. Rose said.

Similarly, the Web site of the American Citizens Abroad organization pointed out that, as of January, neither the House nor Senate bill would tax Americans abroad for not having insurance in the United States, and both “specifically exclude overseas Americans from proposed mandatory U.S. health insurance coverage.”

According to the organization, an earlier version of the Senate health plan would have taxed Americans abroad.

But the group noted on its site that provisions for financing the legislation were “likely to affect Americans overseas, whether they be additional taxes on high incomes or increased deductions for Medicare and Social Security (which would affect American-owned businesses abroad).”

How do you think the legislation will affect Americans living abroad? If you’re an expat, how do you think the legislation may affect you?

[Sheryl]

As clealry indicated, those living overseas will be exempt.

Personally, though, I think they should be required to show proof of insurance in the country where they reside, as an astounding number of expats fail to get insurance which in turn leads to some awful messes.

I don't think one can make any conclusion about effect on tax rates, as those are influenced by multiple things in combination, there is not going to be a single specific tax change solely related to this bill.

And in any even most expats living in LOS are exempt from income taxes and many are exempt from Medicare/SS tax as well.

[JSixpack]

As clealry indicated, those living overseas will be exempt.

Personally, though, I think they should be required to show proof of insurance in the country where they reside, as an astounding number of expats fail to get insurance which in turn leads to some awful messes.

No, that's a violation of personal freedom. Enough w/ the nanny attitude.

Besides, many expats are self-insured. I estimate that self-insurance has saved me B500,000 already. Generally speaking, self-insurance and using gov't hospitals will be most economical and a perfectly viable solution.

[Sheryl]

I would consider self insurance a form of insurance, no problem with that.

And it's not a "nanny attitude". The problems that result from people failing to ensure they have a means to pay for health care go far, far beyond themselves. It becomes a burden to family members, friends, neighbors and above all tax payers. Embassies and consulates also get dragged into it.

The Thai government has identified uninsured farang without the ability to pay their hospital bills as a serious problem which is costing the Thai government and its citizens serious money each year. So much so that the suggestion of requiring proof of insurance for long term visas has been mooted and I expect will eventually coem to pass.

[Jingthing]

If you arrive in Thailand with preexisting conditions, it is likely you will not be able to privately obtain insurance that is of much value to you in Thailand for not only those conditions but an absurdly wide projection of those conditions. My understanding for example is if you are on high blood pressure meds for example your coverage here if you can get it won't cover heart conditions, strokes, etc. Please correct me if I'm wrong.

Edited June 29, 2012 by Jingthing

[Jingthing]

Yes, we are excluded from Obamacare penalties for not having US insurance. BUT, apparently if you travel too much to the US, you are not longer considered a real expat and the penalty can kick in. I don't understand the rules yet. We're talking about it on another thread in the jobs/economy forum.

[cmsally]

I was under the impression that foreigners here over a certain age just couldn't get insurance. Most policies seem to end at 60yrs and I have seen a few threads where people seem to have found something till 70.

I'm not at that stage but certainly food for thought if I should remain here when I'm older.

Does anyone actually know how older people would find something to cover themselves other than self funding.

[JSixpack]

The solution is simple: before treatment, a patient must show or have proof of ability to pay. Otherwise, no treatment. Most if not all private hospitals follow this principle, don't they?

[Sheryl]

Yes, we are excluded from Obamacare penalties for not having US insurance. BUT, apparently if you travel too much to the US, you are not longer considered a real expat and the penalty can kick in. I don't understand the rules yet. We're talking about it on another thread in the jobs/economy forum.

I expect they will base it on tax status i.e. people eligible for the foreign income exclusion would be exempt (or, people meeting the same criteria as that used to qualify for the foreign income exclusion). As you may know there are 2 alternative criteria: (1) being out of the US for all but 30 days in a one year period (physical presence test) or(2) having established a "bona fide" foreign residence. People who meet the second criteria (which is clearly defined in the tax code) are not limited in how much time they can spend in the US, as long as they continue to have a bona fide foreign residence and no permanent place of residence in the US.

(I don't know that this is how it will be done but it seems logical to follow the regulations and criteria already developed for tax purposes.)

[Sheryl]

Re the various posts about problems getting insurance in Thailand:

Yes, it is true that it is hard to get insurance if you are over 60 or have pre-existing conditions. Even if you do, anything related to the pre-existing condition will be excluded. Obviously the preferred solution is to get insurance before age 60 and before you develop any chronic health problems. where that is impossible, options include:

1. Self-insure (and in doing so, do not underestimate possible costs not overlook the fact that you may need to use these funds for more than one major illness).

2. Get legal employment here for a year, which puts you under the Thai Social Security system (which provides free health care) and then be sure to maintain the small payments after you stop working, and you'll be covered for life.

3. If you had insurance in your home country, see if you can continue it with a provision for coverage of overseas care or at least medical evacuation back home.

4. If you make frequent trips back home, consider multiple short term travel insurance policies, these do not exclude for age. They vary in how they deal with pre-existing conditions, for example SOS global traveler medical plan allows for up to $10,000 for "sudden recurrence of pre-existing condition" and also seems to allow things related to pre-existing conditions as long as the expenses occur at least 6 mionths after becoming a member. (I am not totally clear ion all this to check with them if interested). And they certainly are not as draconian as local policies with regard to what constitutes a pre-existing condition, i.e. I don't think they would disallow treatment for a heart condition just because you previously had elevated cholesterol or BP (risk factors), only if if you actually had documented heart disease.

If/when the Thai government starts to require proof of insurance from expats on one year visas, my hope is that they will also establish some type of insurance plan linked to the public health system that foreigners unable to qualify for private insurance can purchase.

[Gary A]

I am now self insured. I had health insurance with LMG for quite a few years. My contract stated that I would never be cancelled because of my age. When I turned 64, they wanted me to pay the first 20 percent. My contract said nothing about any stipulation like that. They didn't cancel me but the contract also said nothing about pricing me out.

Edited June 30, 2012 by Gary A

[JSixpack]

And it's not a "nanny attitude".

Yes it is. Forcing people to buy something when they don't want to and may never need, and determining what the product must be, is standard, typical, authoritarian Momism.

The problems that result from people failing to ensure they have a means to pay for health care go far, far beyond themselves. It becomes a burden to family members, friends, neighbors and above all tax payers. Embassies and consulates also get dragged into it.

It's only a burden if the family members, friends, neighbors and above all tax payer and embassies and consulates allow themselves to get dragged into it. That is their choice, not yours. They can just say, "No." No coercian of the individual is required and such would be just another encroachment of the State.

The Thai government has identified uninsured farang without the ability to pay their hospital bills as a serious problem which is costing the Thai government and its citizens serious money each year. So much so that the suggestion of requiring proof of insurance for long term visas has been mooted and I expect will eventually coem to pass.

The Thai gov't can just say, "No free treatment" just like public hospitals do and demand proof of payment up front. And the warning can be printed clearly on arrival/departure cards.

Some farang do pay considerable taxes, however, so an argument can be made that some care is justified by their payments. In this case it is not such a "burden to the taxpayers" as you portray it.

[CaptHaddock]

As clealry indicated, those living overseas will be exempt.

Personally, though, I think they should be required to show proof of insurance in the country where they reside, as an astounding number of expats fail to get insurance which in turn leads to some awful messes.

Sheryl,

I myself fully support ACA and the mandate, but from your comment I don't think you understand the purpose of that mandate which is: to pool risk in the US. So that healthy people pay for the sick people. If expats were compelled by US law to insure themselves in their country of residence that would not contribute to the pooling of risk in the US in the least. If the host countries want to enforce such a requirement that would make sense, but there's no reason to expect Congress to enact a US law for that purpose. France, for instance, requires proof of health insurance for visitors on a passport from poor countries, such as Thailand, but not from rich countries like the US.

[Sheryl]

Sheryl,

I myself fully support ACA and the mandate, but from your comment I don't think you understand the purpose of that mandate which is: to pool risk in the US. So that healthy people pay for the sick people. If expats were compelled by US law to insure themselves in their country of residence that would not contribute to the pooling of risk in the US in the least. If the host countries want to enforce such a requirement that would make sense, but there's no reason to expect Congress to enact a US law for that purpose. France, for instance, requires proof of health insurance for visitors on a passport from poor countries, such as Thailand, but not from rich countries like the US.

Good points, but I think the pooling of risk is a means to an end, not the ultimate purpose. Purpose is to ensure access to health care.

[Jingthing]

Don't forget that Medicare cannot be used abroad. I paid into Medicare all my working life. I consider being excluded from the Obamacare "tax penalty" rather poor compensation for being excluded from Medicare benefits.

[CaptHaddock]

Don't forget that Medicare cannot be used abroad. I paid into Medicare all my working life. I consider being excluded from the Obamacare "tax penalty" rather poor compensation for being excluded from Medicare benefits.

I am in the same boat, but consider this: Medicare is estimated to pay only 50% of incurred medical expenses. For the retirement lifetime of a couple the current estimate is that lifetime out-of-pocket expenses will amount to $250k on the average. I assume that an individual would be in for half that. So, which would be better for you: to expect to have to spend $125k out-of-pocket or to pay incurred Thai medical expenses? As you know, $125k would buy a lot of medical care in Thailand, particularly at a public hospital.

[CaptHaddock]

Sheryl,

I myself fully support ACA and the mandate, but from your comment I don't think you understand the purpose of that mandate which is: to pool risk in the US. So that healthy people pay for the sick people. If expats were compelled by US law to insure themselves in their country of residence that would not contribute to the pooling of risk in the US in the least. If the host countries want to enforce such a requirement that would make sense, but there's no reason to expect Congress to enact a US law for that purpose. France, for instance, requires proof of health insurance for visitors on a passport from poor countries, such as Thailand, but not from rich countries like the US.

Good points, but I think the pooling of risk is a means to an end, not the ultimate purpose. Purpose is to ensure access to health care.

The purpose of the law is to tax US residents to pay for medical costs in the aggregate so that everyone has access. The only purpose of a US law requiring expats to have local health insurance abroad would be to insist that the expat to have such access himself without increasing access for others in the US in the least. That would indeed be pointless and it is certain that the Congress would have no interest in such a law.

[sirineou]

I have followed this Thread with interest, as it is of great concern to me.

I always planed to retire in Thailand, and always were very healthy.

Two years ago during a routine medical examination, a heart murmur was detected, Follow up examinations revealed some heart valve disease, but not severe enough to require intervention, a couple of months ago at an other follow up it was discovered that the condition has worsened, and that a stent was needed in one of the arteries, the heart valves were still ok but might need valve replacement in the future.

It is aa depresing situation, as I was always mister health, have no weight problem, and is basically a vegetarian. .

So where does this leave me? I can not purchase insurance in Thailand because it is a pre-existing condition, and I have to maintain my insurance in the US because if It ever came to a valve replacement, it would be more than I would be able to afford on my own with out liquidating my assets and leaving my family destitute. It is a scary situation.

If you were in my position what would you do?

Edited July 15, 2012 by sirineou

[JSixpack]

If you were in my position what would you do?

Edited July 15, 2012 by JSixpack

[Jingthing]

I have gleaned some additional details about Obamacare, which is the law whether people like it or not, which may be of interest to lower wealth Americans, expats and not.

1. The current poorest. Medicaid. The pool that is already eligible for Medicaid. Now. Even before Obamacare. But, see later comment on how even this pool will be expanded.

2. EXPANDED Medicaid. A much larger pool. Not as poor as current Medicaid people, perhaps impacting about thirty MILLION Americans. For states that do participate with expanded Medicaid which will be most states but possibly some exceptions, mostly southern states with republican right wing governors. The supreme court decision gave individual states more leeway in NOT participating in expanded Medicaid.

For a repatriating expat, they may want to consider moving to a state that is participating in EXPANDED Medicaid.

But there is more and this could be a HUGE deal for millions of people.

Under Obamacare full kick in, 2014, the means test is based on INCOME, not income and ASSETS.

In other words current Medicaid you have to be very low income and also VERY LOW assets, for example a maximum of 3,000 dollars to your name, can't own a rental property, etc.

Under Obamacare full kick in for both current poverty Medicaid income levels AND expanded Medicaid not as poor income levels, the new tests will be based on income.

One thing I don't know is whether for the right wing governed states that reject Medicaid expansion, will they also have the power to continue to enforce ASSET tests on current Medicaid levels? My read is no, they will need to comply with Obamacare in that regard, but I'm not sure.

So far I only have a rough understanding of this, and if this is going to be your situation, pay close attention as the law goes into effect in your state or the state you will live in. I could be very wrong, but this is info I have at this point, and it is huge big deal meaning people will NOT need to spend down to total poverty to get medical care!

Edited July 15, 2012 by Jingthing