One of the most vexing questions for me as an expat in Mexico has been what to do about health insurance.
The horrifying rise in costs of healthcare in the U.S. was a key factor in my coming to Mexico.
How much would full “catastrophic” coverage cost, insurance that would cover an emergency whether it was being trampled by an elk in Evergreen, Colorado or run over by a bus in Mazatlán?
If you read up on what expats say about doctors, hospitals and treatments in Mexico, you will see the reviews are overwhelmingly positive. Patients summarize their praise with comments on how much less it all costs, from 50% less to a fraction of the cost in the U.S. They are grateful for both the quality of care they’ve been given and the quality of life they can still afford to keep.
Of course the cost varies by doctor, hospital, and what illness you have, just like the U.S, but costs are always lower, sometimes to the extreme. For starters, in Mexico an office visit with a doctor or specialist will cost 350 to 500 pesos (about $30 to $43).
Doctors still make house calls and those visits cost about the same. Lab tests will cost about a third of what they cost in the U.S. An overnight stay in a private hospital room generally costs less than $120.
Expats who live here full-time or want to stay over 180 days at a time have either resident visas or visas temporals, which is something between a tourist visa and a resident visa.
With either, you can apply for the two major public health insurance types available in Mexico, IMSS (Instituto Mexicano de Segura Popular) or Seguro Popular.
IMSS coverage costs from 3,200 - 6,200 pesos ($177- $400 U.S.) a year. Many expats opt for IMSS insurance if they are covered in the U.S. by other insurance, feeling that this can cover them in an emergency if it arose and routine care.
Seguro Popular covers Mexican's poor, but can be as good in quality as IMSS depending on what part of Mexico you are in. Both are no-frills systems, which have been compared to the U.S. system of HMOs.
The doctors in IMSS system are the same doctors who work in the private sector, meaning that people with private insurance see the same doctors. Doctors in Mexico are required to divide their time between the private and public sector to earn their pensions.
People tell me that the care in the IMSS system is excellent. The downside is not the quality of care but rather the ease, or lack of ease I should say, of getting prescriptions filled, long wait times and the difficulty of making appointments (sometimes you have to make them in person - and then they still see people first-come-first-serve).
A main consideration in either is that in the Mexican public healthcare system you have to set up your own meals and nursing care.
In the Mexican culture, where most people have extensive family networks, this makes a lot of sense. Rooms often have space and couches for family members to stay overnight.
When I had surgery in Mexico, a Mexican friend's niece stayed with me one night, an adult nephew the other. Seeing it from that perspective, I saw how much sense it made (and rather liked the attention.)
As an American without an extensive network, if you are part of a couple, the IMSS system would be workable if your spouse and friends could be reliable caregivers. Retired expats tend form strong networks for exactly this type of scenario.
Part-timers who are here only a few months often opt for travel insurance, enough coverage to get them stabilized here, then home in an emergency.
Private insurance through a Mexican carrier is much cheaper than in the United States.
Lacking the depth of social support I would need for the public insurance options if I were to live here full time, I decided to talk to a health insurance broker about private healthcare.
Most of the expats in Mazatlán are clients of Juan F. Chong. I set up a visit to find out more about Mexican coverage and what a single expat's options would be based on six-to-11 months a year in Mexico.
Most of his clients are exempt from the Affordable Care Act (if you live in Mexico 330 days a year, you are exempt) and come to him to purchase health insurance from a Mexican or global carrier. Global carriers will generally let you receive treatment anywhere but the U.S. (quite telling, isn't it?)
Me: What are greatest concerns of expats who come to you?
J.C. - Catastrophic illness; cancer, heart disease or diabetes, for example.
Me: What are some of the most important factors in choosing a plan?
J.C. One of the most important factors to consider is the level of hospital included in your coverage, that the best hospitals are included. Here in Mazatlán, that would be Sharpe Hospital, Hospital Bilboa, Worldclass and Hospital Marina.
You can also go to any other top level hospital in Mexico. Mexico City, Guadalajara and Monterrey are considered the cities with finest hospitals and specialists in the country [It's a very big country].
With these upper-tier policies, the insurers pay the hospital directly, rather than reimbursing you. Costs are easier to track here because hospitals use a single claim system.
Me: What are the standard deductibles people take?
J.C - Policies deductibles my clients take range from 25,000 to 35,000 pesos ($1,388 - 1,944 dollars based on an exchange rate of 18 pesos to the dollar).
[As a comparison, many of my healthy friends over 50 in the U.S. have yearly deductibles of $5,000 and still pay over $600/month in premiums. Mexican coverage would cost me, at age 58 and healthy, about $1,700 dollars U.S a year ($140/month).]
One important difference in Mexico concerning those deductibles is that a deductible applies to the lifetime of a single medical “event” or incidence. They are not paid every calendar year. If you are being treated for an illness multiple years, you don’t have to pay that deductible every year. You pay deductibles per diagnosis.
Let’s say for example you got diagnosed with lymphoma. Your deductible, once paid for, would apply for the remainder of the period of your treatment. If you were diagnosed with a second illness however, you would have another deductible to cover.
Me: What about co-pays?
The insurance company pays a percentage of the bill, usually 90/10. It’s important when choosing a policy to make sure that the policy has a cap on how much you have to pay on co-pays. Typically, that cap should be 35,000 pesos ($1,945).
Me: What are the considerations regarding age?
JC: People who are considering retiring to Mexico need to understand that unless they are in terrific health, it will be very hard to get approved for a policy after the age of 64. The time to enroll is when your are healthy.
Me: I understand that new health insurance policies do not cover pre-existing conditions, just like U.S. policies didn’t until Obamacare.
J.C: That’s correct. The waiting period before you are covered for certain illnesses like cancer and diabetes can range anywhere from one to three years. This is another reason to get insured sooner rather than later. If you get diagnosed with a serious illness, you probably won’t be approved for coverage.
Me: So you can’t get insurance at all if you have a preexisting condition?
J.C. You can be covered but with exceptions, exclusions for that condition. You will have to pay the costs associated with that condition.
Me: When I was looking on line for expat policies, there were many to choose from online. Why should I use a health insurance broker?
J.C: Insurance brokers are familiar with the paperwork required to be admitted for surgery and what forms are required by doctors and underwriters. To guard against fraud there are a number of forms that require verification of identity for example.
You might need someone who can help negotiate with insurance companies. If, because of an emergency, you are taken to a secondary hospital, the broker can orchestrate the process of reimbursement. Even if your Spanish was exceptional, that can be quite a challenge.
People should make sure that they are working with a licensed broker, someone who has passed the exams and is authorized to sell insurance. For some years people were getting away with selling insurance without those licenses and the special training they require, although that’s been cracked down on in recent years.
Me: What’s important to consider when choosing a carrier? Which are the best?
J.C: If you are considering among the top 4-5, I’d advise to choose one with a local office in the city in which you live.
Me: What about national health insurance [Public Insurance like IMSS and Seguro Popular]? Can expats get that?
J.C: Yes, but you do have to have at least a Visa Temporal.
Me: What about drug coverage?
J.C: Medications are all covered by diagnosis.
Me: I understand that you need to give the hospital your credit card when you’re admitted.
J.C: Yes. Expats need to realize that they will need to have some cash available for some expenses that will be incurred at the beginning, x-rays and doctors visits for example. Some will be reimbursed. Some will be out of pocket. Medical insurance does not pay for everything upfront.
[End of interview]
When you think about upfront costs, tests, MRI's blood work, that Mr. Chong is referring to, you need to remember these costs would probably add up to a fraction of the cost of the same items in U.S. An MRI might cost a few hundred dollars.
The costs is so much lower on so many procedures that many expats self-insure if they are on Medicare. That is they pay for their treatment and still come out ahead when compared to the United States (I know, I know...unbelievable).
Even with medical insurance with a private carrier here, they still might self-insure for minor, less expensive issues. When a band-aid can cost $629 in the U.S., you question if we even have less expensive issues in the U.S.
Unless you have a Cadillac American policy, having medical standard insurance in the United States has the potential of providing a false sense of security. We all have read or know people whose coverage has run out. Fifty percent of bankruptcies are caused by healthcare costs and many of those people have health insurance when they get sick or injured.
The rules for expat policies were changed as late as July of this 2016. According to the new ACA rules, three types of expatriates qualify for expatriate healthcare plans if the plan satisfy certain requirements, two of which apply to employment and group health plans:
Category A: Non-U.S. nationals who are assigned to the U.S. for a specific and temporary purpose due to their skills or job duties, and who require health coverage in multiple countries because they are expected to travel outside the U.S. at least once a year, and are periodically offered other multinational benefits.
Category B: U.S. nationals working outside the U.S. for at least 180 days in a consecutive 12-month period.
Many people blend a number of these plans. For example one couple I know who has public insurance in Mexico, has purchased medevac policies for several thousand a year. You could also purchase a special cancer policy in the U.S. with what you save on private insurance to public or private insurance in Mexico.
If you qualify for Obamacare (ACA) or are covered by the veterans' insurance, you might opt for the inexpensive IMSS or Seguro Popular insurance for when you are in Mexico for emergencies and keep your ACA insurance too.
You may decide to keep your Social Security coverage and opt for either private or public Mexican insurance if you can prove residence in both places (not impossible). The thing I like (and hate) most about living in Mexico most the year are the number of options.
Many people in the U.S. are scared silly that in the event of a major illness they would have to spend their whole retirement savings out-of-pocket costs until it’s gone. Then to add insult to injury, many have to spend their time in recovery and beyond trying to figure out how to financially survive.
This scenario happens every day in our country. A majority of bankruptcies are caused by medical bills and most of these people had some form of health insurance when they became ill.
You can’t just put your head in the sand because you still have your health. That's why so many still-healthy people are moving to Mexico.
Related: Mexico: What is the difference between ISSSTE and IMSS by Quora -
Monica Paxton's "English Speaker's Guide to Medical Care in Mexico."
Barron's reports on the real cost of healthcare in retirement. While hard to pin down exactly, none of the numbers are good news.
Next up: One of the great things about practicing Spanish with Skype practice partners is that you become enlightened to the fact that maybe they too have an excellent quality of life. So why do we only compare ours to the worst in the world, not the best?
I'm a partner with Ventanas Mexico and the author of "If Only I Had a Place," on renting in Mexico, and my first love the "Interactive Guide to Learning Spanish Free Online,' geared to older adults thinking about moving or retiring to a Spanish-speaking country.
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