Expats and US health Care Reform Insurance?

I am an American living as an ex-pat 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 ex-pats regarding new mandatory health care insurance.

expat US health care insurance bill taxes
Do ex-pats 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 an 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 holders 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 ex-pat. This also applies to ex-pats 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 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 worldwide income, forever, with 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 the 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 ex-pats


  • 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 ex-pats 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 ex-pats 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 a US expatriate not paying for the new US health care bill.

I make very little because of the currency exchange, but it 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 as 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 the rule for residency for ex-pats will be strict. Foreign multinational employees will also be exempt from buying these health care insurance premiums.

The risk for ex-pats 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 ex-pat making 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 on 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 to the American people have spoken. I am just glad as an ex-pat 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 ex-pat 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 idea about how people will pay medical bills in this new economy.

My advice is to stay healthy or consider medical tourism. My local dentist here wanted $3,000 dollars for a procedure. In Poland, I did it for $300. Insurance is a racket here in the U.S.

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13 responses to “Expats and US health Care Reform Insurance?”

  1. alistair

    you are filling out form 2555 or 2555-EZ aren’t you and getting (approx for 2009 tax year)$90K of foreign earned income exclusion right?

    1. admin

      Yes, however, I earn some money on my websites and must file a schedule C and pay a self employment tax. Even though I live in Europe 100% of the time with an EU passport, that income for various reasons is not considered foreign earned and can not exclude that. But you are right you on earned income get a 90k exclusion on income as an expat, so you just pay taxes in your local country.

  2. James Albright

    What does the foreign earned income exclusion have to do with health reform? It’s only fair that someone living overseas and covered by a foreign health plan not pay for something that doesn’t provide coverage. WRT the 2555s, this year I am going to waive the exclusion because I have some U.S. income and also pass the 90K limit. Because excluded income is now added to the formula to calculate your tax liability, remaining income is taxed at a higher rate. To give you an idea, my tax liability has decreased by some $1500 by not excluding anything and taking the foreign tax credit.

    1. Mark Biernat

      You are right, foreign earned income earned has nothing to do with health care reform. I was answering in the total picture, what you write is correct. I think it is very fair that someone living oveseas should not have to pay for medical insurance that applies to the US system.


    GLOBAL: Healthcare reform and American expatriates
    In the new Section 5000A (f)(4) of the Internal Revenue Code, expatriates shall be treated as having minimum essential coverage. So if you are an American expat, it doesn’t matter whether you actually have health insurance or not. The law says you do.

    1. Mark Biernat

      This is great information thank you very much. I am very happy that I am living overseas at this time.

  4. Bill

    I have a two questions I haven’t been able to find the answer to:

    1- When does the insurance mandate kick in. If I’m to file my 1040 as a US citizen non-resident living in a foreign country must I leave the US by Dec 2013 or Dec 2014?

    2- I’m retired and live off of my investments in a number of different countries. Is the residency requirement based on the question, have I spent less then 30 days in the US in a specific tax year? Or are there additional requirements to meet. In fact, I will not set foot in the US until this law is repealed so I won’t even have 30 days in country.

    1. Mark Biernat

      Those are very good questions and I need to research them. I have to go to the original documents but if anyone else knows the answer please comment.

      I think if you are not in the USA and your residency on your tax return is another country like mine is, you will be exempt. I think it is where you are a tax resident, and it applies to that tax year.

      I highly recommend living abroad, cheaper living with many benefits. I love the USA and am a patriot but there is a lot to be said about taking advantage of currency difference.

  5. Bill

    Mark…thanks for your reply. I live in China a good part of the year. If I want to see a top specialist in a good hospital it costs me 7 Yuan or about $US1. If I need and MRI, including consultation it costs 150RMB or about $US22. And finally, if I needed something really serious done I can go to a world class hospital like Bumrungrad in Bangkok and get state of the art care at probably 1/10 the cost of the US.
    So yes, truly, who needs US health insurance or the US health care system at all.

    I’m pretty sure that if you are outside the United states 330 days or more you qualify as a non-resident.

    But it’s almost impossible to find when the program actually begins and how that determines when you must be out of the US. I’ve read both 2013 and 2014 with the “Exchanges” being operational in 2015.

    1. Mark Biernat

      Thanks for the reply. I live in Poland and not only do I have insurance here in Poland and the doctors are very good, but even at the best private clinics prices are very cheap compared to the USA. I mean an MRI machine is the same here as it is in the US. Many people from the UK etc come to Poland for medicine to escape the high prices.
      I certainly am happy about the expat exemption from the national health care reform.

      The reality is I think by 2013 or 2014 the Republicans will change “health care reform” substantially in some way depending on the elections and it all might be a none issue. However, now everything is fuzzy and unclear.

  6. Angie

    Where does it say in the new bill that Expats are exempt?

    1. Mark Biernat

      It is what I have read, but I do not recall where I read it. But it is true. It makes sense also that if you live in another country, like I do, I pay medical insurance here I would not need to pay double for a service I would not use.

  7. Ryan

    A very interesting post and I assume it is ‘Obamacare’ that you are referring to? I completely agree that it is only fair that someone living overseas and covered by a foreign health plan does not need to fork out money for a plan that doesn’t actually cover them. Of course, the situation is different if you were to return to the country but as you said, taking out international health insurance is a way to solve the problem. I recall reading about a certain time period, around 300 days; if you are out of the country for the long, you are no longer considered a resident of the US.

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