Portability of Health Coverage for Retirees Abroad

1. Portability of Health Coverage for Retirees Abroad Lessons from the EU, Options for the US and Designing Arrangements for International Migrants who wish to return home

2. 200 Million live Outside their Native Country • More than 10 million Mexicans live in the US; • More than 2 million natives of Turkey live in Germany; • Several million from North Africa live in France; • Europeans in retirement increasingly live in the south of Europe.

3. Growing Number of Older Adults and Elderly • United States 2006 31.6 million 55-64, 18.9 million 65-74, 13.2 million 75-84, 5million 85+ • Europe 2007 France 9.8 million 65+, Germany 16.8 million, Italy 11.8 million, United Kingdom 9.8 million • Japan 26.8 million 65+ 2007 • China 102 million 65+ 2007 and estimated 322 million in 2050

4. Health and Social Services Costs of the Elderly Very High • In the US per capita health care expenditures are more than $7,000 per capita; • Expenses for 65+ are more than $15,000 per capita annually; • Although European health expenditures are less the elderly are still a significant expense

5. Growing Number of People Choosing to Retire Abroad • Can afford to maintain upper income life style on a moderate income; • Climate and Taxes; • Household help; • Return to Native Land; • Lack of Portability of Health Coverage can be a Deal Killer for Many

6. Restrictions on Coverage Abroad • In the US Medicare does not pay for services abroad in most cases; • Some Medicare Advantage plans cover emergency care that occurs during a trip from home in the US of less than 60 days duration; • In the EU retirees can be covered if they retire to another EU country

7. General Agreement on Trade in Services GATS • Mode 1 trade across national barriers—ie. e prescribing or telemedicine; • Mode 2 customer crosses national boundaries—medical tourism; • Mode 3 provider crosses national boundaries • Mode 4 commerical venture sets up subsidiaries in another country

8. Development of Free Trade Under GATS • In the GATS process countries have to opt in to open a sector either to most favored nation status or domestic status; • Very few countries have opened up their health sector and permit citizens to go abroad for care that is paid for by national medical funds; • GATS agreements enforced by WTO

9. NAFTA: US Canada and Mexico • Unlike the GATS where countries have to opt in in NAFTA they have to opt out; • But there is an exception for government funded health services; • In the 2007 meeting of NAFTA finance ministers Mexico petitioned for Medicare to cover retirees in Mexico;

10. The European Union Arrangements • The EU has issued an EU health card for persons to use for emergencies when traveling; • Retirees also have long had the option of moving their health benefit from their native country to the country they retire to in the EU; • The EU has recently codified arrangements for citizens to obtain care in another country under particular circumstances

11. Administrative Issues in EU retirement • Nation’s that have a national health service that is free at point of services such as Sweden and Britain are not set up to pay bills and try to work out how much they should pay Spain or Ireland for retirees who move there and join that service

12. Other Administrative Issues • When the person retires to Spain for instance they must use the public hospitals and clinics for care; • Some countries like Germany have non profit health insurers who have contracts with Spanish providers and most may not actually transfer their coverage; • Lower income people who are dependent on cash grants and or social services may find that those benefits do not transfer

13. This Portability in Europe does not transfer to non EU countries • Some EU countries may have developed bilateral agreements such as Germany and Turkey or before the EU Britain and Ireland; • There are many immigrants to these countries that would like to return home in retirement; • There are also many who as Spain and Greece have become more expensive would like to have less costly options • Spain does have some reciprocity with Brazil, Ecuador, Chile, Peru and Paraguay and France and Algeria have an agreement that covers some reciprocity

14. The US Mexico case • Over a number of years I and a number of students and associates have looked at the issue of portability of Medicare to Mexico; • Several books and studies are available and I can send the PDF of our more recent study which also includes the proceedings of a conference on this issue

15. Other Issues US/Mexico • Some legal permanent residents have never become citizens [often because they have not learned English] and cannot leave the US for more than 6 months without giving up their residency status and entitlement to Medicare; • Legal elderly visitors to the US are at risk of financially crippling expenditures if they become sick • Parents of US residents living in Mexico are often not able to access IMSS and there are exclusions for pre-existing conditions even if their children wish to enroll them.

16. Options Going Forward • Although it might be difficult to have the US and the Centers for Medicare and Medicaid Services begin to pay in full for services abroad there might be some first steps; • Congress could authorize CMS to do some research and demonstration waivers that would study the impact of this if it were implemented in Mexico or in part of Mexico; • Instead of full coverage it might be possible to implement coverage for emergency services so long as the beneficiary paid part B and part D premiums. • Mexico might experiment with coverages that provide emergency care in Mexico and the US might do the same in the US

17. Issues to be studied • Determine if for those covered the cost to the Medicare program is reduced • Determine if a number of persons are then able to move to Mexico who otherwise would have been very expensive in the Medical Care and social welfare systems; • Determine if some Medicaid benefits for nursing home coverage might also be extended • Determine if such services can be efficiently and honestly administered and if the services are of sufficiently high quality

18. Next Steps • Currently working with the Center for Strategic and International Studies in Washington to attract funding for a task force which includes various stakeholders including members of Congress; • Purpose would be to develop recommendations for Congress with regard to various initiatives in this area