You’ve probably heard the rumors. In order to get an MRI in Canada you need to travel 2,000 miles via dogsled. Months to see a doctor, and once you see a doctor, he doesn’t know what he’s doing. In order for a Canadian to get adequate healthcare, they have to come here to the U.S. Well, none of this is true, and most of us in the U.S. would love to have the same coverage that is provided in Canada. This post addresses the ugly truth about healthcare options in retirement for people who have moved here from Canada. After reading this, you may want to reconsider that move to the U.S.
Canada Provincial Healthcare
If you are a Canadian, it is possible to keep your Provincial healthcare, if the move is temporary. However, although Provincial Health Insurance may be a great benefit while you are living in Canada, it may not be a great option here in the U.S.
First, there is the issue of even qualifying for Provincial Health Insurance while living in the U.S. Here are the requirements from the Ontario Health Insurance Plan (OHIP) just to maintain coverage while living outside of Canada. You qualify if you have:
- a valid Ontario health card
- lived in Ontario for less than six months and will be away for no more than 30 days
- lived in Ontario for more than six months and will be away no more than 212 days in any 12-month period
If you are a snowbird, maintaining your OHIP while in the U.S. may be a valid option, but not for those moving here full time.
The other issue is the Provincial Insurance coverage here in the U.S. If you actually have a medical emergency, it doesn’t provide a lot of help. Here are some examples of what the OHIP covers:
- Emergency outpatient services – Up to $50 (Canadian) per day
- Emergency inpatient services – Up to $400 (Canadian) per day
A stay in the hospital can cost thousands if not tens of thousands of dollars. Covering $50 or $400 per day is a drop in the bucket. You will need more than the Provincial Health Insurance Coverage if you are going to spend a significant amount of time in the U.S.
Medicare is the U.S. national medical insurance for those over 65, and if you are eligible, it will probably be your best insurance option. For more about the details of Medicare, read my more thorough post here.
If you are 65, and qualify for Medicare this will certainly be your best option. However, the issue is actually qualifying for Medicare. Qualifying for Medicare is easy if you have lived and worked in the U.S. for your whole life, but not so simple if you are relatively new to the U.S. Qualifying for Medicare is exactly the same as social security, however Medicare is not included in the U.S. – Canada Totalization Agreement. Which means you can’t rely on your time in Canada to help you qualify for Medicare.
In order to qualify for Medicare, you must have worked and contributed to the U.S. social security system for 10 years. In those years, you must earn over a certain (link) amount each year for that year to count.
If you are eligible for Medicare, in 2018, the monthly premium cost of Medicare is $134. However, this could be higher if you earn over a certain amount of income. Most people will then purchase an additional supplement plan that can run you anywhere from an additional $25 to $200 per month. Truthfully, Medicare is great insurance for those over 65, at a reasonable price. You can also purchase Medicare if you haven’t met the eligibility requirement, however the costs will be much higher.
If you are eligible for Medicare, part A (hospital coverage) is free. If you are not eligible, you can buy part A, but the cost will be up to $422 per month. You will still need to purchase part B ($134 in 2018) and a supplement plan, another $25 to $200 per month. All in, you are probably looking at nearly $700 per month if you need to purchase Medicare and aren’t eligible for free Medicare part A. Working 10 years and getting free part A, is very important if you are hoping to have a low cost insurance policy here in the U.S. after age 65.
One last thing about Medicare eligibility. If you have worked for over 10 years in the U.S. and have contributed to social security, you should be eligible for Medicare. If you are eligible, your spouse should be eligible as well, even if your spouse has not worked and is not eligible for her own benefit. However, if you are 65 and your spouse is younger, she will have to wait until age 65 to receive Medicare. If she is older, and you qualify, she will be able to receive Medicare at age 65.
Medical benefits through an employer
The cheapest and usually best insurance that you can get is through an employer. There are two big benefits of working and keeping health insurance:
- It is going to typically be the cheapest plan available
- If you aren’t eligible, working gets you closer to the qualifying for Medicare
Healthcare premiums are typically the most expensive between retirement and age 65. Age 65 is when you can start Medicare, assuming you are eligible. On the next section we will discuss getting healthcare on the exchange. Spoiler alert, it is very expensive. Working until you are age 65 or older has many benefits, including lower medical costs. If you have no retiree medical benefits and are younger than Medicare age, or not eligible for Medicare, it may make sense to work a little longer. This will help you better bridge the gap until Medicare kicks in.
The healthcare exchange
Obamacare? Trumpcare? It doesn’t really matter what you call it, it isn’t very good. First, the monthly premiums are crazy high. Second, if you can afford the premiums, you better hope that you don’t actually need medical care.
For example, let’s run a quick search on the healthcare exchange, www.healthcare.gov. For a 60 year old man in Oakland County, MI it will cost you nearly $800 per month for a middle of a road Blue Cross HMO. That is just for the monthly premium. On top of the monthly premium, you will need to pay $4,000 for a deductible before the insurance really kicks in. After the $4,000 deductible, you are still responsible for 20% of the costs. We haven’t even gotten to prescription drug costs yet.
Here is the example of the plan on www.healthcare.gov:
If you are not covered by any health insurance, the healthcare exchange may be your best option. However, this should probably be your last resort. It is expensive and the coverage just isn’t great. The benefit of the healthcare exchange, compared to where we were before Obamacare, is that you can’t be denied for pre-existing conditions, which is a big benefit for those over the age of 60.
Making the decision
If you are under 65, getting health insurance from an employer is going to be your best option. First, it will typically be the lowest price option out there, and have the best coverage. Also, if you are new to the U.S., working will get you closer to qualifying for Medicare. If you are retired and not 65, you may be forced onto www.healthcare.gov to find the best option. However, be prepared to open up the pocket book, because this is not a cheap option.
If you are over 65, and retired, Medicare is certainly your best option. Prices are reasonable and you typically will have a lot of options to choose from. To qualify for low cost Medicare, you will need to have worked in the U.S. for at least 10 years. If you don’t have 10 years of work experience, you can also get Medicare, but you will have to pay more for it, and it can also be costly. In this instance, you may be better off trying to continue to work, until you get 10 years of U.S. experience and qualify for the cheaper Medicare insurance. That free Canadian health insurance doesn’t sound so bad now does it?