Boomers May Soon Overcome Top Objection to Retirement in Mexico

As retirees and 22 year residents of Puerto Vallarta, Mexico, it’s quite easy to extol the benefits of living in Mexico. Of course, not every part of Mexico is the same (as is true in the US or Canada); however, we can certainly vouch for Puerto Vallarta. With its beautiful climate and landscape of the Sierra Madres cascading down into Banderas Bay, its kind and friendly local citizenry, its proximity to the US and Canada, and its lower cost of living; what’s there not to like in this wonderland south of the border?

English, as a second language, is widely spoken throughout the city, the safety of expats is of highest priority for the authorities with the rate of violent crime at a fraction of that back home, corruption significantly reduced, poverty virtually eradicated, and the cleanliness of this city make it a favorite resort destination for millions of visitors from throughout the world. All of the “Big box” stores such as Sam’s Club, Costco, Wal-Mart, Builders Square, Office Depot, more than a dozen beautiful signature golf courses, world class deep sea fishing, high speed internet, satellite TV, VOIP telephone service, etc. are all available in this beautiful city in the center of the Mexican Riviera. 

The face of Vallarta has been dramatically altered during the past two decades with well maintained city parks, esplanades, a beautiful malecon walkway along the beach, new water treatment facilities and miles of new water distribution lines, new or upgraded power distribution system throughout the city, fiber optics throughout the city, new downtown above ground and underground parking garages, a growing University of Guadalajara branch, a modern Convention Center, the tripling in size of the Maritime Terminal, the quadrupling in size of the International Airport, and the addition of six new hospitals with modern and sophisticated diagnostic and surgical equipment, staffed with highly trained and experienced English speaking doctors.

Now that we’ve established the fact that Vallarta is a fine place to live or retire, let’s take a closer look at the last item above related to medical care.

With high quality medical care readily available in Vallarta, the cost of it, even though at a fraction of the cost in the US, can be a deciding factor when considering Mexico as a retirement location. Assuming that most retirees have reached or are fast approaching their 65th birthday, the availability, quality, and cost of medical care are of high importance. The quality of medical care in Vallarta is generally equal to or better than that received in the US or Canada and the cost varies from one third to one half of that in the States (speaking from experience and with authority; a laparoscopic appendectomy and playing golf three days later!).

Having high quality medical care available in Mexico is one thing but paying for it is another since US provided Medicare for seniors fails to cross the border at this time. Various supplements to Medicare cover seniors traveling abroad for a limited period of time (for example, supplement F covers the holder for the first 60 days of international travel), however, they are inadequate for full time residents living abroad.

Although Mexican Social Security (IMSS) is available to expats, most under the age of 65 have their own private international health insurance which is somewhat costly as discussed in numerous articles and covered on websites such as InternationalInsurance.com. For many years, we used IHI/BUPA and can state emphatically; their coverage and service is absolutely great for expats living in Mexico and traveling worldwide.

Now, let’s assume you’ve reached the age of 65 and are considering Mexico as your retirement destination. It’s very difficult to abandon your free Medicare that you’ve contributed to for a lifetime, the cost of private insurance is almost prohibitive, and you can’t afford to take the risk of being uninsured. This is the main dilemma for seniors considering retirement abroad. Even so, there are approximately ten million Americans living abroad, of which more than a million reside in Mexico per the Association of Americans Resident Overseas (AARO). In fact, there are more US expats living abroad than reside in 40 of the states in the US, as reported by Republicans Overseas! This number has increased by more than 60% in the last decade (from 24 to 40 states)!! According to AARP, Mexico is the number one retirement destination for Americans.

Well, perhaps we’re on the verge of overcoming this top objection to retiring in Mexico! The US government has been approached by numerous expat groups such as the Puerto Vallarta based chapter of Democrats Abroad and the bipartisan group of American Citizens Abroad with the intent of promoting the advancement of Medicare for expats living abroad. To date, there is nothing positive to report.

Before Congress can enact such a law change, they must conduct demonstration projects in order to determine the feasibility and cost effectiveness of such law changes. The Americans for Medicare in Mexico, A.C. (AMMAC) have put forth a tremendous effort in promoting this benefit to eligible retirees and have encouraged many members of Congress to initiate such a demonstration project. They argue that not only have these eligible Medicare recipients paid into the fund over a lifetime, but the cost to the US taxpayers will be significantly reduced because rather than returning to the US for expensive and long term medical care, the majority of these expats will merely elect to have their medical care provided near their foreign residence at a fraction of the cost.

Proponents of the law change such as Professor David C. Warner of the Lyndon B. Johnson School of Public Affairs at the University of Texas have written books and papers on the subject of “Getting What You Paid For: Extending Medicare to Eligible Beneficiaries in Mexico” and the 2009-2011 US Ambassador to Mexico, Carlos Pascual, was following the efforts to establish a demonstration project for the initiation of Medicare in Mexico as a pilot program. In fact, Ambassador Pascual accompanied President Obama to a North American Summit in Guadalajara where one of the topics covered was Medicare in Mexico as reported by the Guadalajara Reporter. Again, nothing was accomplished.

In summarizing, we are anticipating the availability of Medicare for eligible retirees residing in Mexico, but have no idea when this will happen. Once this obstacle to retiring abroad has been eliminated, not only will millions of baby boomers in search for a less expensive and better quality of life be heading south of the border, but so too will millions of retiring Mexican Americans desiring to return to their homeland. Combined with all of the other obvious benefits of living in Paradise, free and high quality medical care for boomers will just be the icing on the cake!