Nov 25 2018

My 2018 Healthcare Update, by Rob Evans

OK, the day has finally arrived. I turned 60 – one of those magical ages when the insurance company computers take notice. The result of being one year older was a 40% increase in my expat insurance, WEA. My travel insurance, which I use for travel back to the US where my expat insurance does not cover me increased 20%. Given that it decreased so much last year for being a long-term customer, the cost puts me back to where I was 2 years ago, so I cannot complain. My Caja association (ARCR group membership) and my Medismart membership (think Costco) are unchanged.

So the bottom line is my total healthcare cost increased by 24% year to year.

That means my monthly cost increased to $348/month or $4176/year, which is still less than the $1083/MONTH ($13,000/yr) I was spending in the US four years ago.

Note deductible applies to private insurance, not the Caja.

One change I made this year was not to file any more medical claims with WEA unless they exceeded my deductible. My insurance agent, Perfect Circle in Escazu makes filing claims a snap. All I needed was to take a picture of the paperwork with my phone or drop the receipts off at their office and they check and submit them for me. If something is missing, Perfect Circle calls the doctor and gets the additional information. This service is especially valuable if your Spanish is not good.

So I diligently filed each medical bill last year with little hope of reaching my $2500 deductible, and I realized I am giving WEA medical information (you have to submit the bill and the results) they don’t need to know and with no chance of getting reimbursed. Note: there is a risk with my strategy because the bills cannot be more than 90 days old to be processed, so I cannot submit them all at the end of the year. I can’t see a year’s worth of bills totaling more than $2500 deductible so I will take the risk.

A little-known benefit: WEA reimburses us $150/per person or $300 total for preventive care, independent of the deductible. Last year, we used this benefit for a colonoscopy and the year before for an annual physical. So to be accurate, my annual costs of $2592 should be reported as $300 (2x $150) less to account for the preventive care reimbursement.

Comparison to the USA

One of the biggest surprises I encountered when I retired was learning how much of my health insurance was paid by my employer. When I started with IBM in 1982, IBM paid everything. Overtime, IBM shifted more costs to me. It was not until I retired and did not get the company subsidy that I learned the real cost of unsubsidized insurance. According to recent reports, the average cost per US employee is about $28k per year of which the company pays $16k and the employee pays $12k. Talking about health insurance is so confusing because everyone is getting $28k of insurance, but depending on how much the employer subsidizes, the actual employee may pay from $0 to $28k a year.

As an IBM retiree, I am eligible to use IBM healthcare plans. The catch is that as a retiree, I no longer get the company subsidy that would eliminate much of the cost. Even worse, IBM puts retirees in a special high-risk group separate from current employees, which drives up the cost for retirees. So what I get in Costa Rica for $348 per month would cost me $1500 to $2500 PER MONTH through IBM. Bottom line, I am so grateful to be living in Costa Rica and paying $348 and not $2000 a month.

The study below compares the cost and results of healthcare in the US to other comparable countries, and it shows that the US is paying more but getting less than other countries, confirming my belief that the US needs to make major changes to be competitive again.

Getting ready for Medicare

It took much time and research for me to assemble the healthcare plan I have now in Costa Rica. I dread turning 65 and being confronted with Medicare. I hope not to take my Social Security until I am 70, so I will need to decide first if I am going to take Medicare and then how I am going to pay for it since it normally comes out of your Social Security at 65. Also, I am overwhelmed with all the Medicare parts, A-F, so there are many decisions I don’t look forward to. I probably will not sign up for Medicare if I remain in Costa Rica and will accept the penalty if I ever return to the US. At the end of the article, I have included a risk analysis of not taking Medicare at 65 that someone on the Mexico expat forum posted (see “Should you opt out of Medicare?”)

One concern I have about Medicare – budget projections show Social Security and Medicare consuming much of the ENTIRE federal budget in the future. I don’t think Congress will allow that to happen, so something will have to give which might include rapidly raising the premiums, reducing what is covered, or doing means-testing on income and wealth. Whatever happens, I don’t think it will end well, so I am glad to be in Costa Rica where healthcare is affordable if Medicare fails.

A Important Note on Health Insurance in Costa Rica

Here’s a plug for my friend Freddy who sells insurance in Costa Rica – he keeps reminding me that any expat insurance not registered in Costa Rica cannot be regulated or sued in Costa Rica. Life is full of risks and because of Freddy, I understand this now and I think it is important you do too – before you decide what to buy.

A Review of My Basic Plan

Many elderly people avoid going to the doctor because they fear finding a problem – they know too many people who have gone into the hospital for surgery and ended up in worse shape, who were prescribed medicines that made them feel worse or that they could not afford, or they will discover a pre-existing disease that will make them un-insurable. But avoiding the doctor will not keep me healthy! The best way to avoid healthcare headaches is not to get sick in the first place.

Therefore, my healthcare plan includes being preventive and proactive by doing the following:

  • Exercising regularly and eating a healthier diet to improve my weight, strength, and immune system.
  • Eliminating and avoiding toxins (sugar, excess salt, fluorine, pesticides, pollution, mold, processed foods) to prevent disease.
  • Having regular examinations, including an annual physical, visits to specialists, and recommended tests for my age to identify potential health concerns as early as possible so they can be addressed.
  • Living where healthcare is affordable (can be paid out-of-pocket and/or insurance rates are reasonable).

Implementation of my plan:

Preventive care: Actively pursue a preventive lifestyle. Use the local clinic (EBAIS) and Medismart for regular check-ups and to discuss health concerns. Pay out-of-pocket for specialized preventive checkups with dermatologist, ophthalmologist, gastroenterologist, cardiologist, and lab tests.

Reactive care: Use pharmacies for minor cuts/burns, allergies, gastric ailments. Go to ER at the local public hospital (CAJA) for more serious problems – stitches, broken bones, stroke, etc.; or if unhappy with their care, speed, or ability, transfer to a private hospital using my insurance.

Travel: Keep a travel policy to cover my trips back to the US where WEA does not cover me.

Bottom line: taking care of my health is much more work than when I neglected it but should pay back dividends in a better quality of life later.

A Comment From a Reader

“Much thanks for the advice on WEA health/medical insurance… the pricing is very good. Our plan has come in at $1461.USD each with the $2500 USD deductible (we are 65 & 66). After reviewing 16 plans, I am done… we are signing up with WEA (our local hospital will accept direct payment from WEA). A huge thanks to you all!  Thanks, Roland”

Previous Articles with more Detail

In my previous articles, I went into great detail on my healthcare costs, choices, and decisions, which you can find here:

Should you opt out of Medicare?

Note: I make no guarantees about these calculations from the Expats in Mexico group, but I think they offer a good framework for analyzing the costs and benefits of using or opting out of Medicare.

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