NCPA - National Center for Policy Analysis

Policy Idea: Going International With Medicare

October 4, 2000

A growing number of U.S. citizens retiring on Social Security and private pensions are taking up residence in Mexico. Like U.S. manufacturers who have reduced costs by relocating south of the border, retirees can stretch their dollars by taking advantage of lower wage rates in Mexico.

However, while there are retirement enclaves such as Cuernavaca, there is a major obstacle to the growth of retirement communities in Mexico.

  • The obstacle is that although Americans can receive Social Security payments abroad, they can't get Medicare benefits, and "the absence of affordable, high-quality health care keeps most seniors from considering Mexico as a retirement option," says the National Journal's Bruce Stokes.
  • This obstacle can be overcome by changing Medicare regulations so that Mexican medical facilities that have been U.S. inspected and approved can be reimbursed for treating Medicare patients.
  • Walter Russell Mead, of the Council on Foreign Relations, came up with the idea, says Stokes, and with "everything from home health aides to food costing less in Mexico," Mead says "people would be able to maintain a higher standard of living in retirement."

Mexico would benefit from the foreign investment and job creation, while for-profit U.S. hospital chains could build facilities in choice retirement enclaves.

Such a change in policy would draw the U.S. and Mexico closer together, says Stokes, in keeping with the vision of Mexican president-elect Vicente Fox.

Source: Bruce Stokes, "Mexico, the Next Retirement Mecca?" National Journal, September 9, 2000.


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