I am an American living as an expat abroad full-time. Will I have to pay for health care insurance in the US ( which I will not use) under this new health care reform bill? This is a good question. The purpose of this post is to clarify the rule for expats regarding new mandatory health care insurance.

expat US health care insurance bill taxes

Do expats need to pay for US health care reform?

Do you live abroad? What is your medical status with regard to insurance? Here is my situation. I am a dual Polish and US citizen. I live in Poland not the USA. I pay for Polish national medical insurance and do not need US insurance coverage for my family, as I am never in the USA and living as a EU citizen in the EU. The rule is I have to pay normal federal US taxes no matter what, which I do. However, under this new health care bill I do not have to pay for this new insurance because I reside outside the USA.

It will be required that all US citizens and US visa holder buy national US health care insurance, if and only if they live in the USA. However, do I have to pay this also if I am not residing in the States?  No, because I am an expat. This also applies to expats who are not dual citizens, that is, they just work or live overseas of course.

Of course every US citizen living in a foreign country and with  or without a dual citizenship, will be responsible to file normal USA taxes. The United States is one of the few countries that requires its citizens to file a tax return on all world wide income, forever, no exceptions.

expat health care

I have two words for you: '"medical tourism". If I need to have any medical procedure I would go abroad as the cost is a fraction of the US and unless it is brain surgery. The quality is the same or better overseas often. I lived abroad and I can tell you he doctors really take their time with you and you can pay cash for little money. The US health care system is a rip off.

New health care insurance bill for expats

Summary:

  • Expatriates do not pay for health care reform
  • US residents are required to pay for health care reform or face a penalty
  • I live in a post communist country and see how socialism destroys the national economy

The health care legislation affects people living in the US, citizen or visa holders as this is where you will get treatment.  Therefore, citizenship status  does not matter, only legal residency an important condition in this bill. Based on a place of residency test, you may or may not have to pay for this insurance coverage as an American living in a foreign country.

Here is the rule.  If you live in the USA you must pay or have a penalty for exempting out . Most of the health care reform will start in 2014. Therefore, unless the law is changed expats will not be required to buy health insurance like the rest of the Americans because they are paying for it in another country anyway, and will not use it.  They are not resident (see US tax code resident test) even though they are citizens. Therefore expats do not need to purchase insurance ( I am not a legal or tax expert, just my understanding of this new insurance bill). I think this is very fair for me as an US expatriate not paying for the new US health care bill.

I make very little because of the currency exchange, but if would be a burden with another tax, it would be a huge disincentive for work and productivity. I live in Poland, a post communist country and I have seen with my own eyes how socialism destroys the economy. Socialism is fine until you run out of other people’s money. Obama has done something that he really is not aware of the full effects. Ronald Reagan said ‘government is the problem’. I am pro-government just not a socialist and if you are come to the former eastern bloc and live like I do.

I am very happy that this new legislation passed by congress will exempt me out as an ex-pat. Now I am still required to pay normal US taxes, but at least this is not one more straw on the camel’s back.

The impact for consumers if you live in the US will be of course different and rule for residency for expats will be strict. Foreign multinational employees will also be exempt from buying these health care insurance premiums.

Risk for expats US health care reform

One note is as an American living abroad, if I go to the USA, I do not think I am covered by the US health care plan. I would be covered under my EU insurance policy for someone traveling to the USA.  Therefore, I am not without insurance but if you are an expat taking a trip back home be clear as to what the rules are and the type of insurance you have.  I can buy extra private insurance here in Europe when traveling with my family to America. I do this anyway. Just make sure you do not assume you are covered if you are living in a foreign country.

I am not for socialized medicine personally. The government that governs least governs best. However, I will have to wait and see what impact this will have for the US economy as a whole and the political process.  Congress, the House of representatives, the Office of the President has given this a green light so the American people have spoken. I am just glad as an expat I will not have to pay double for national health care insurance.

Update – I am no longer an expatriate: US social medical coverage will be repealed or largely dismantled by the time 2014 rolls around. I moved back to the States after almost a decade as an expat and am shocked how spotty US medical care is. I think someone is making a lot of money and the average citizen suffers. The last generation was got medical coverage but I think future generations will have access only if you are relatively wealthy. although I am a libertarian, I have no ideas how people will pay medical bills in this new economy. My advice is stay healthy or consider medical tourism.