Misadventures in Health Insurance

Ah, health insurance – such a necessary evil (or evil necessity). At this writing, the U.S. Supreme Court has just announced that it is upholding a key provision of the Affordable Healthcare Act, also known as the ACA or Obamacare. We believe the ACA is a step in the right direction for U.S. citizens but still has a long way to go towards ensuring universal, affordable healthcare for all. Hopefully, with this ruling, the politicians will stop wasting time and resources trying to defeat the act and start working on how to make it better (and on that day the air will fill with porcine aviators!).

Lucky for you, I’ll get off that soapbox and explain how John and I are approaching the health insurance dilemma as Panama expats. It’s a complicated topic, so hang on!

One of the reasons we chose Panama was its reputation for high-quality healthcare at a much lower cost than the outrageously out-of-control U.S. system. But that doesn’t mean there are no cost considerations – and frankly, it’s not a good idea to move down here without thinking through how you’ll pay for a major health crisis. The topic of Panamanian healthcare and facilities is the stuff of another blog post, but the short version is that everyone in Panama has access to some form of care when and if they need it. The best care available is in the private hospitals (Hospital Chiriqui and Hospital Mae Lewis in David), but our understanding is that you might be turned away and sent to one of the public hospitals if you don’t have insurance and can’t demonstrate your ability to pay up front.

Our ages (55 and 59) have made things a bit complex (welcome to middle age!). We will be traveling back to the U.S. a couple of times a year to see family, so we need some type of U.S. coverage. We’re too young to qualify for Medicare and we don’t qualify financially for the ACA subsidies.Up until this point, we’ve been paying a huge monthly COBRA premium to stay on the insurance offered by John’s former company – but that was not meant to be permanent and it certainly isn’t sustainable, cost-wise. (SIDE RANT: People in our age group and income bracket are the ones really left holding the bag for healthcare costs in the U.S. There’s NOTHING available that’s remotely affordable if you’re going it alone, without an employer to foot some or part of the bill. And that includes the Obamacare insurance exchanges.)

We have a similar age-related issue for Panamanian coverage. We have decided to postpone getting our Panamanian visas until we can qualify for our pensionados, and we can’t do that until John starts collecting Social Security in 2017. After talking with Magda Crespo, a local insurance agent in Boquete (BTW, if you haven’t put Magda in your Panama rolodex yet, you should – she is fantastic!), we’ve discovered we can’t apply for the most ideal Panamanian policy until we have at least started the visa process.

NOTE: If you have your visa or have started the process, you can skip the rest of this! Your best bet is to visit Magda and talk over options with her. She offers some excellent plans with robust coverage in Panama and also travel coverage.

SO . . . drum roll: after exhaustive research (by John) and head-scratching, here’s our interim solution. I’ll state my usual disclaimer that our situation is unique and yours might be quite different depending your age, pre-existing health conditions, and other factors.

• INTERNATIONAL POLICY. For Panamanian coverage as well as travel anywhere else in the world including the US, we have signed up for the “Special VIP” policy from VUMI Group. We purchased the policy through an agent in Panama City, Gonzalo de la Guardia. After three months of John turning over every international travel insurance stone he could find, we chose this company and agent because they met our specific needs. The VUMI Group has the highest ratings for customer service and Gonzalo was great to work with; in fact, he’s a card-carrying VUMI customer for himself and his family. Not a bad recommendation.
  COST: a small fraction of what we’ve been paying for COBRA, which only covers us in the U.S. Mind you, the VUMI policy has a high deductible and does not cover two fairly significant pre-existing conditions (one for each of us) but it’s a stop-gap until we qualify for Medicare.
  Our best advice is to do your homework – there are many, many companies out there offering international travel insurance but few cover the U.S. and some have restrictions on some Asian countries. And honestly, most of them are not very highly rated. Get as much unvarnished info as you can about what it’s actually like to work with the company you’re considering (the expat blogs are your best friends). Cost is important, but also the company’s track record for customer service. How long have they been in business and what is their reputation on social media? How complicated is it to file a claim and how long will it take for them to pay? How many hoops will you have to jump through and how much paperwork will it take? One thing we like about VUMI is that filing a claim is a completely online process – a must for international travelers.

• LOCAL HOSPITAL PLAN. To supplement our Panamanian coverage, we have signed up for MS Panama SA,AKAHospitalChiriqui

  

  insurance (the company is not connected with Hospital Chiriqui, although its office is on the second floor). This coverage is fairly limited; in fact, it’s really more of a discount program than an insurance policy. It pays 70 percent of covered expenses to a max of $25,000 a year and also excludes pre-existing conditions – in fact, they’ll deny you if you have more than three exclusions. (We have a funny story about that, subject of another post. In fact, the whole process of getting HC coverage was pretty darned interesting – and I mean that in the best way!) One good thing about this plan is that it doesn’t just cover treatment at Hospital Chiriqui, but is also affiliated with Punta Pacifica, Panama City’s best hospital.

  COST: $419 for both of us, every three months. Of course, the premium will increase as we age. Can someone please tell us where they’re handing out those anti-aging pills??!

Are you asleep yet?? If you’re a U.S. citizen there are a few more things you need to know about the ACA. The first is the mandate that every American citizen carry health insurance that meets the standard for “minimum essential coverage” or otherwise pay a fine. And yes, it applies to expats – but only until you meet the same “330 rule” that the IRS uses for the Foreign Earned Income Exclusion. In short, this rule lets you exclude up to $90K of income every year from federal taxation when you’ve passed the “physical presence test” by spending 330 or more days in a calendar year outside the U.S. In other words: get your 330 days in and you get two golden tickets: no Obamacare fine and a huge tax break on earned income. (Since I’m still working, I did a little happy dance when I found out about that one!!).

The million-dollar question (and one we’re still trying to answer) is whether our new international VUMI policy meets that “minimum essential coverage” test. Best we can tell, you have to have a policy issued by one of the state exchanges in the U.S. Thanks to our good friend the 330 rule, we get to take the exemption in 2016, but for 2015 we’ll probably just suck it up and pay the $100 fine.

The best insurance? Eat right, exercise, keep moving, enjoy life, travel, laugh and love a lot, be kind, be positive and live for today. Kiss your partner every day!

Be well and be happy.