After living five years in Spain and Portugal, first as expats and then immigrants, we began to question whether we’d do better by cancelling our “Part B” coverage would have cost us $175 per month deducted from my Social Security payments and having more disposable income in our pockets. Sure, we knew that there’d be fines, fees, penalties, and interest if we wanted to rejoin Medicare Part B … but we have no intention of returning to the USA. At least not to live there. Here in Portugal, we have comprehensive, state-of-the-art health care provided both by our public coverage under the country’s universal National Health Service (SNS) supplemented by our excellent private insurance that runs us two thousand euros (€2,000) per year for the two of us – one 74, the other 60.

For those living in the USA, Medicare has formed the foundation of health care coverage for Americans aged 65 and older. Here’s how it works:

A portion of Medicare coverage, Part A, is free for most Americans who worked in the U.S. and paid payroll taxes for many years. Part A is frequently considered “hospital insurance.” If you qualify for Social Security, you will qualify for Part A. You’re covered whether you want it or not, as long as you have more than 10 years (or 40 quarters) of Medicare-covered employment.

Part B, which many think of as traditional health insurance, isn’t free. You pay a monthly premium for Medicare Part B.

Part A generally covers medically necessary surgery and certain hospital costs; Part B may cover doctor visits while you’re an inpatient. Part B is a voluntary program which requires paying a monthly premium for all months of coverage.

Individuals entitled to Medicare Part A cannot voluntarily terminate their (free) Part A coverage. That’s not permitted by law. Generally, premium-free Part A ends only due to loss of Social Security “entitlement” … or death.

You can, however, voluntarily terminate your Medicare Part B.

Say you’re 65, no longer working, and don’t want to pay premiums for Part B Medicare insurance. That’s OK. But if you opt-out, the costs will be higher if you want to get back in.

“In general, when you’re 65 or older, you should decline Part B only if you have group health insurance from an employer for whom you or your spouse is still actively working and that insurance is primary to Medicare (i.e., it pays before Medicare does),” says Social Security.

But what if you are an American immigrant, living outside the USA?

To “disenroll” from Part B, you’re required to fill out a form (CMS-1763) that – under most circumstances – must be completed either during a personal interview at a Social Security office or on the phone with a Social Security representative. For those of us living abroad, we're told to deal with it through our US embassy. We, however, completed the process online.

Social Security insists on an interview to make sure we know the consequences of dropping out of Part B — for example, that we may have to pay a late penalty if we should want to re-enroll in the program in the future.

So, why did I decide to disengage myself from Medicare Part B?

Several reasons:

  • Neither Medicare Part A nor B covers any health care costs incurred outside the USA. And we live in Portugal and Spain. In other words, we’re paying for nothing especially because, given the circumstances, we have no plans to go back and live in the USA again.
  • The standard monthly premium for Medicare Part B was $164.90 for 2023, up from $135.50 in 2019 and rising to $174.20 in 2024, which Medicare deducts from my Social Security check. That would come to $2,090.40 for something I can’t or won’t use. The money will serve me better in my pocket than in the government’s deficit-ridden purse.
  • But, most importantly, we found a better and more cost-effective option!

It’s called “travel insurance,” albeit a rather extraordinary plan: Offered by AFPOP through Medal (AFPOP’s insurance brokerage), it covers both me and my spouse for a year anywhere we go — including the USA – for up to 60 days per trip. It’s renewable, regardless of our age; there’s no age limit to enrol, nor higher costs the older you are … neither is there a limit on the number of trips we can take. Moreover, it’s international in scope including, believe it or not, the USA!

Unfortunately, pre-existing “clinical” conditions and health problems aren’t covered. But, as we have none to speak of, that didn’t matter to us since the travel insurance isn’t only for medical issues we might encounter outside of Portugal (where we’re fully covered).

I don’t mean to come across as an advertising mouthpiece for this particular plan. But do some homework and research: First, try to find 24/7/365 unlimited travel insurance plans with such comprehensive coverage and so few restrictions … rather than those for a single trip. Next, see if they’ll even sell you a policy if you’re older than 65. Finally, look at the price and what you get for your money.

Author

Bruce H. Joffe is the author of Expat: Leaving the USA for Good and Spanish Towns, Portuguese Villages: A Journal for Expats and Immigrants. 

Bruce H. Joffe