A recent article in Forbes Magazine reported on a lobbying effort to allow Americans living in Mexico to use their Medicare benefits there. There are over 1 million U.S. citizens living in Mexico and many of them are retirees. Currently, Medicare will not pay for medical services provided outside the United States or its territories.

Leading the lobbying effort is Paul Crist who runs a hotel in Puerto Vallarta, Mexico. He is a former aide to Sen. Paul Sarbanes (D-Md) and he has founded the non-profit “Americans For Medicare In Mexico”.  As a former Washington insider, he knows how Congress works and has lobbied 85 members in the U.S. Congress to try to get Medicare accepted south of the border.

According to the Forbes article, 64% of retired Americans living in Mexico return to the U.S. for medical treatment, with the rest getting treated in Mexico but picking up the costs themselves.

Americans living in Mexico can pay out-of-pocket because “health care is extremely affordable in Mexico with or without health insurance,” as are “comprehensive private insurance policies,” according to MedToGo.com.

An office visit to a doctor in a Mexican city typically runs between $30 and $40, according to MedToGo, while a hospital room costs $90 to $100 a night. Besides private health care insurance, the Mexican Institute of Social Security provides affordable, basic health insurance for all Mexican residents, regardless of nationality. Studies suggest that health care services are 70% less expensive in Mexico than in the U.S.

According to Mr. Crist, if Medicare were accepted in Mexico, the 64% of American retirees currently flying back to the U.S. for expensive care would instead opt for treatment in Mexico, cutting Medicare’s overall costs by a minimum of 22% .

Mr. Crist is pushing for a three-year Mexico-Medicare pilot project to test the idea. Apparently Medicare has funded many pilot projects over the years to try out new ideas for providing Medicare-funded medical services.

The Forbes article said allowing Medicare to be used in Mexico could also help ease immigration pressure. This is because many long-term U.S. residents who were born in Mexico, and are interested in returning there when they retire, would no longer be reluctant to do so for fear of losing their Medicare benefits.

Recently, I was on a plane headed to Seattle and happened to sit next to two ladies from British Columbia, Canada. Being in the insurance business I had to ask these ladies to tell me about “the terrible healthcare system in Canada”.

From the confused look on their faces, it was clear they weren’t sure if I was serious about “the terrible system” question, so I quickly told them I was just kidding. They gave me a relieved smile and we proceeded to spend the entire flight talking about health care in Canada and the United States.

Pat is a nurse who works for a non-profit home support agency which is contracted with the government in British Columbia. She said her agency has 1,000 community health workers who provide in-home care for seniors.

The list of in-home services ranges from skilled nursing care to housekeeping. I was very impressed when she said elderly Canadian military veterans can get help with yard work – paid for by the government!

Canadians pay for these services on a sliding scale based on income, but the amounts are modest and affordable for everyone, according to Pat. Some people pay nothing while others pay 20%, 40%, or more of the costs, based on their income.

We talked about how much health insurance costs in each of our countries, and I told her I work with a woman who has been self-employed for many years and pays for health insurance for herself and her husband.  Their monthly premium is $1,400 per month.

The Canadians shook their heads in disbelief.   They said most Canadian employers pay for their workers’ health insurance premiums, which are:  $54.00 per month per individual;   $96.00 for family of 2;  $108.00 for family of 3 or more. Once again, I was very impressed.

I asked the Canadians what truth there might be to stories about long waits for medical services in their government-run program.  They said there are waits for things but, “if you have a life-threatening illness, you are cared for immediately”, Pat said.   Her daughter had a brain hemorrhage at 16 and had emergency brain surgery – at no cost to the family.   Her grandson was diagnosed with Leukemia at age 5 and went through 5 long years of treatment, and many months of hospital stays – at no cost to the family.

Pat did have an example of having to wait for surgery.  She said she had problems with her gall bladder and went on a wait list for six months. But, she said, “If I had had an acute episode, they would have operated on me right away.” She seems very happy with her government-run healthcare, and I was impressed that it all seems so normal.

As we finished up our conversation, Pat said there are issues with too much demand for services in some parts of Canada.  She said, “For home support there are no waits in Victoria, but in other parts of the country, I think they have a shortage of staff and there is a lot more of an expectation that family will care for the elderly until services can be provided”.

I think the key phrase here is “services can be provided”.  As an insurance agent, my line of business is Medicare-related. The majority of my clients are moderate and low-income seniors, and many live alone with no family nearby – and little, if any, government support.

While I’m sure the Canadian system isn’t perfect, it sounds a lot better than what we have in the United States. I had to shake my head and admit that American system leaves a very bad impression.

I spent two hours on Saturday talking to a woman who is finally ready to get health insurance after going without it for three years.  Her employer does not provide group health insurance, but gives her $200 per month to buy individual health insurance.  At 55 this woman is healthy and her biggest worry is getting into a car accident as she drives around town. 

We got on the computer and looked at one insurance company site that allows you to build your own insurance plan.  We started with a $1,500 deductible.  Now put in the co-insurance amount of 80% for the insurance company, 20% for you.  Or you can choose 50/50 split between you and the insurance company. 

If you want to see the doctor for a co-payment of $35, adds $80 per month to the premium, so she decided against this “benefit”.

Now put in what you’d like for a maximum out-of-pocket each year. This means a cap on your co-insurance amount (20% or 50% mentioned above).

We got a monthtly premium of  $292/month for a plan with no doctor visits and no prescription coverage. She can go to the doctor, but the cost comes under the deductible.

$292 per month is too high by about $100.  So we went back and changed her deductible to $5,000 and the monthly premium went down to $195 per month.  Remember, this is a plan where she will pay all of her costs until she meets her deductible of $5,000. After she spends $5,000 her plan goes to 80/20, where she will pay 20% of the bills.

After two hours of talking about this and other insurance company options (with talk of politics and people thrown in), I was able to declare this woman an expert on individual health insurance. Now she has to decide if she should pay $195 per month for a plan that will require her to pay all of her medical bills until she spends $5,000.  Frankly, she doesn’t have much choice if she wants to stay below $200 per month for her premium.

FYI:  This is called “consumer-driven health insurance”, or as I say to the consumer, “You get to pick your pain”.

It reminded me of a conversation I had recently with two Canadians. Their system is so much simpler than ours.  Canadians living  in British Columbia pay the following monthly premiums for health insurance: individual: $64;   a couple pays $98;  a family of three or more pays $108 per month. 

I’ll write a post on my conversation with the Canadians, but all I can say is that the system in the United States is kind of embarassing when compared to Canada’s system.