Reasonably Priced International Health Insurance - A Lesson for the United States
A growing number of American retirees are moving to other countries because of cost and life style considerations. A recent article in Dow Jones’ Market Watch profiles a 63 year old lady who retired with her daughters to Panama. (here)
Housing costs and day-to-day expenses are much less in Panama than in the United States. The weather is tropical and the lady feels perfectly save in her adopted community. The pace of life is slower than in the U.S. and may not work for many Americans.
Health care is first rate, at least in the larger cities such as Panama City. The interesting thing is her health insurance cost. She pays $2,000 a year for a catastrophic policy through Cigna International. She has asthma, a pre-existing condition, yet pays for her inhaler, other medications, and doctor office visits out-of-pocket.
An international health insurance plan is not subject to all of the federal and state mandates that policies sold inside the U.S. must contain. Plans can be tailored to the specific needs of the patient. (here) Consequently, international plans can be reasonably priced, yet still cover major medical expenses. This is the true role of insurance – mitigating risk, not covering all health maintenance costs.
The lady in the article is not eligible for Medicare for another two years. If she remained in the U.S. until age 65, her current health insurance would be thousands of dollars more expensive because of the Obamacare and overlapping state benefit mandates.
To hold down health care costs, we have long advocated for the greater use of mandate-free, catastrophic health insurance plans coupled with health savings accounts. (here) The international scene is proof that this solution can work.