Many U.S. retirees look forward to traveling to the Philippines, and more and more are actually retiring overseas there. But what happens to retiree’s federal benefits while they are out of the country? The short answer is that although Social Security benefits are available to retirees in the Philippines, Medicare is generally not.
Traditional Medicare does not provide coverage for hospital or medical costs outside of the United States (although Medicare does cover residents of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands). In rare cases, Medicare may pay for in patient hospital services in Canada or Mexico. Unfortunately, there is no exception for the Philippines.
Some Medicare Advantage (private Medicare) plans may provide coverage benefits for health care needs when enrollees travel outside the United States. (Check with your plan before traveling.) But those retiring overseas – or travelers enrolled in the traditional Medicare program or whose Medicare Advantage plan does not cover foreign travel – will need to purchase health insurance from another source.
Medicare beneficiaries who are traveling and who have no other coverage must either buy short-term travel insurance or a Medigap policy that covers foreign emergencies. Medigap plans C through J offer travel emergency coverage, but the benefit applies only during the first 60 days of any trip. This Medigap benefit covers 80 percent of emergency care administered outside the country. A $250 deductible and $50,000 lifetime maximum apply. In addition, many travel agents and private companies offer insurance plans that will cover health care expenses incurred overseas, including evacuations. The State Department’s Bureau of Consular Affairs provides information on medical insurance while overseas, including a list of companies that offer travel medical insurance.
Whatever option retirees choose while abroad, if they return to the United States they will still be covered by Medicare Part A. Medicare Part A covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices. There are no premiums for this part of the Medicare program and anyone who is 65 or older and is eligible for Social Security automatically qualifies.
Medicare Part B, which covers outpatient services, charges a monthly premium. Unless retirees continue to pay the premiums while they are overseas, they will not automatically be covered by Medicare Part B when they return to the United States. Retirees who drop Part B and then move back to the United State will have to pay an enrollment penalty. Premiums increase by 10 percent for each year that an individual is no enrolled in Part B. Therefore, retirees who think they may return to the United States may find it worthwhile to continue paying Part B premiums while they live abroad.