Why Outsource Medicare
You can’t take it with you, that is, you can’t take Medicare with you when you retire outside the U.S. It stops at the border. Meanwhile, economists warn that the retirement of baby boomers threatens to be a train wreck if not a tsunami.
Professor David C. Warner at the LBJ School of Public Affairs, University of Texas, Austin, has written widely about extending Medicare to retirees in Mexico. This would be of considerable benefit to U.S. citizens who retire there, and in addition – and here’s the big selling point – it would result in considerable savings to the U.S. Government. Dr. Warner has cited cost savings to the Medicare trust as a major benefit. Some say the Medicare trust will be bankrupt by 2040.
The average Medicare beneficiary in the U.S. costs the Medicare fund about $7,500 per year. If that same person lived in Mexico, the same health care services would cost about $4,000 per year. Dr. Warner has written books such as Getting What You Paid For: Extending Benefits to Eligible Beneficiaries in Mexico (U.S.-Mexican Policy Reports)
Overall, medical costs in the U.S. are higher than in most if not all other countries. Not only do our healthcare professionals earn more, the administrative costs of insurance companies, PPOs, HMOs, etc. add up. One reason healthcare costs in Mexico are far less is that administrative costs there are lower.
Outsourcing healthcare of some retirees to Mexico, some authorities say, is not so different from outsourcing manufacturing, tech support and call centers to foreign countries. It would eliminate a few U.S. jobs, though not many since there would still be paperwork in keeping track of payments to facilities there. Such a plan would be good for Mexico, too, resulting in an increased flow of money across the border, and in time, more and better medical facilities there.