When you bring up the topic of U.S. healthcare to Canadians, confusion typically reigns. As Canadians, we’re used to our universal public system, so it can feel daunting to understand the private healthcare system in the U.S.
This is especially true for two groups: Canadian-resident snowbirds and Canadians who are thinking of moving to the U.S. full time.
The good news is Canadians needn’t be fearful of U.S. healthcare. While the American system is more complicated, clients and their advisors can rest assured that there are clear, viable health coverage solutions for snowbirds and for Canadians moving to the U.S.
Major concerns for snowbirds include retaining Canadian health insurance while spending a significant amount of time in the U.S. each year, and accessing adequate healthcare coverage in the U.S.
With careful planning, however, snowbirds can benefit from having coverage in both countries.
Maintaining Canadian healthcare coverage
To retain their Canadian provincial healthcare, snowbirds must carefully monitor their absences from Canada. In Ontario, for example, maintaining OHIP coverage requires physical presence in the province for at least 153 days in any rolling 12-month period. In Quebec, to maintain RAMQ coverage, at least 183 days of physical presence in the province is required per calendar year (though absences of 21 days or fewer don’t count).
Obtaining adequate healthcare coverage in the U.S.
The solution to health insurance in the U.S. for snowbirds is to purchase a robust travel insurance policy that will cover them throughout their stay. This is necessary since Canadian provincial healthcare provides very little coverage outside Canada.
Depending on the traveller’s age, the average cost of a travel insurance policy for a snowbird spending half the year in the U.S. ranges from roughly $1,000 to $2,500 per person. Compare this to the unpredictable and potentially financially devastating cost of a U.S. hospital stay without insurance, which could run into the tens or even hundreds of thousands of dollars depending on the type of medical emergency.
Canadians thinking of moving to the U.S.
Healthcare solutions for Canadians planning to move to the U.S. are not inexpensive, but, in most cases, the savings from lower U.S. tax rates makes up for it.
U.S. healthcare is generally either employer-provided, purchased privately or obtained through government programs including Medicare for retirees or Medicaid for those with low income.
Employer-provided U.S. healthcare
More than half of Americans under 65 are covered by employer-provided healthcare. For Canadians under 65 planning to move to the U.S. who have secured U.S. employment, obtaining group coverage is generally the best and least costly route to obtaining U.S. healthcare.
Private U.S. health insurance
Canadians planning to move to the U.S. who don’t have access to an employer plan can purchase private individual coverage through the health insurance marketplace.
The Trump administration has tried to repeal the Affordable Care Act (ACA), also known as “Obamacare,” but so far has failed. The ACA guarantees that no one can be refused coverage due to age or pre-existing conditions, as occurred previously. This provision is reassuring for Canadians planning to move to the U.S.
Generally, if you’re 65 or older and either: a) a U.S. citizen; b) a green card holder who has been living in the U.S. for five years; or c) someone who has paid or whose spouse has paid U.S. payroll taxes for at least 10 years through U.S. employment, you’re eligible for U.S. Medicare, a stable national health insurance program for retirees that has been in place since the 1960s.
Contrary to widespread belief, Canadians can become eligible for U.S. Medicare at age 65 even without being U.S. citizens or five-year green card holders as long as they or their spouse worked in the U.S. for at least 10 years.
While U.S. Medicare isn’t free like the Canadian system, it offers widely accepted coverage throughout the U.S. and helps to defray healthcare costs.
A global solution
Canadians planning to move to the U.S. who aren’t yet eligible for Medicare may consider obtaining coverage via an alternative solution that’s potentially superior to private U.S. health insurance: obtaining an international health insurance policy. These policies provide worldwide coverage and are guaranteed to be renewable for life under the same conditions that were approved at initial underwriting.
The main benefit of these policies is the peace of mind of having year-round medical coverage anywhere in the world with the freedom to visit any doctor, hospital, or medical facility. Depending on a client’s age and the chosen deductible, the average annual cost of an international health policy ranges from roughly US$5,000 to US$10,000 per person.
While the U.S. healthcare system is not without complexity, there are clear solutions for health insurance coverage.
Clients exploring their U.S. healthcare options can consult a cross-border healthcare advisor for help identifying the most appropriate strategy. An expert can offer guidance on enrollment and renewal, accessing services and understanding any legal or political changes.
Jonah Ravel, B.A., F.Pl., CFP, is a senior cross-border financial planner at MCA Cross Border Advisors Inc.