“I long, as does every human being, to be at home wherever I find myself”
Point One – Medicare residency requirements mainly impact Advantage plans
I get a lot of questions from retirees regarding residence requirements for Medicare, which is a critical factor for retirees who travel and spend much of their time outside the US (OUS). Original Medicare (Parts A and B) provide virtually no coverage OUS, but certain Supplements and Advantage Plans can provide urgent and emergent care outside the US as summarized below:
In general, Supplements offer the best coverage for travelers in the US and Advantage Plans offer the best coverage for travelers OUS. Supplements are accepted by all Medicare providers (they pay providers directly and predictably) and are great for travel in the US – particularly Snowbirds and other folks who maintain two residences in the US. The only practical issue for beneficiaries with Supplements is where they can get the best deal on their Supplements – and venue can make a big difference in cost and availability.
Advantage plans are where residency really matters.
Advantage plans cover a limited geographic area – defined by zip code. They are designed for managed care provision within that geographic area and offer limited coverage outside the local home market (Home Market).
As noted in the table above, all Advantage plans can be used anywhere inside the US for emergent care, and for additional cost in certain PPOs and related out-of-network plan options. Advantage plans are only available to residents inside their Home Market, and have networks created to serve residents in that market. Residency venue is critical for normal managed care delivery.
All Advantage plans allow for a minimum of 6 months of continuous travel outside the Home Market. Recently we have seen some plans allow up to 12 months outside the Home Market as a plan feature. These limits come from the concept of moving outside the Home Market. If an Advantage Plan member moves out of their Home Market they must report the move to the Plan, and then can enroll in a new plan in their new Home Market (see point two below for more on this concept).
Some Advantage plans offer worldwide coverage for some or all of the following:
- Emergency care,
- Urgent care,
- Coverage with monetary caps (typically $50,000 to $250,000)
- Coverage with no monetary caps,
- Coverage for up to 6 months outside the Home Market
- Coverage for up to 12 months outside the Home Market
- The potential for co-payment requirements,
- The potential for co-insurance requirements, and
- Coverage for emergency transport. This number of variables makes selecting plans based on these coverage factors complicated and time-consuming, but ultimately worth it for the foreign traveler.
Point Two – Medicare treats extended travel like moving – with limits of 6 or 12 months
Because Advantage plans are designed around local care delivery networks, moving out of the home area makes accessing this care very difficult. As an example, if you move out of your Home Market, or travel for over 6 months, then your Plan Sponsor is required to disenroll you – if you tell them or they find out from another source – typically a change is reported to Social Security. They are under no obligation to monitor the beneficiaries’ whereabouts, and the beneficiary has no obligation to tell them.
The disenrollment procedure is the same for a move or extended travel – the Plan decides that you have moved, gives you notice, and the beneficiary is then given a special enrollment period (SEP) to enroll in a new plan. There is no concept of retroactive disenrollment – the Plan must give notice and claims must be honored up to the point of disenrollment. There is no prohibition on “moving” back to the original Home Market or selecting a new venue. There are no penalties – after all the beneficiary simply moved according to Medicare’s rules.
The system is designed to ensure that beneficiaries are not left without adequate coverage for moving – and travel. You can find the detailed regulations in the Federal Code of Regulations.
Point Three – Residency starts with a mailing address, and time away does not terminate residency
According to Social Security, generally a U.S. mailing address indicates U.S. residency when:
a. Absence from the U.S. (less than 6 months) with no intention of abandoning U.S. residency does not terminate or interrupt an individual’s period of U.S. residency.
b. Absence from the U.S. (more than 6 months) is not considered temporary unless there is a strong indication the individual is maintaining U.S. residency. Maintaining a house or apartment in the U.S., paying U.S. income taxes as a U.S. resident for the period while abroad, or other similar acts are indications of maintaining U.S. residency.
The definition of residency is a difficult concept from Medicare’s point of view. They require a physical address (not a mailbox), but they must respect lifestyle decisions of beneficiaries who may want to travel most of the time, live in an RV or live the life of the “Happy Wanderer”. In short, Medicare must be flexible enough to accommodate the lifestyle desires of its beneficiaries – Medicare is a benefit both earned and paid for by beneficiaries.
You can only have one US residence for Medicare, so it makes sense to carefully consider all the factors when choosing. Mexican or other OUS residency Citizenship is obviously different – and very important. typically is opaque to Medicare and does not have any legal status for them – what matters is your US residency. Citizenship is obviously different – and very important. Social Security suggests that beneficiaries should have two or more of the following which they list as convincing evidence of residency in the US (Source here) for SSI benefits:
- Property, income or other tax forms or receipts,
- Proof of U.S. home ownership or rental lease or rent payment record,
- Utility bills addressed to the claimant,
- U.S. driver’s license,
- Telephone directory listing,
- Regular and frequent participation in social programs such as vocational rehabilitation, Meals on Wheels or evidence showing that the claimant regularly receives services from a social agency,
- Proof of employment, such as pay stubs or a contract,
- Proof of active participation in a religious, fraternal, or social organization,
- A record of volunteer activity which shows regular and frequent performance,
- Clinic cards or doctor’s record showing dates of visits for regular medical treatment,
- Proof of a local U.S. bank account or check-cashing card at a local establishment; and
- Correspondence addressed to the claimant.
Unlike Medicare, SSI is an unearned benefit which is to prevent poverty for elderly and disabled US residents – so these criteria are the most exacting standards that Medicare beneficiaries can expect to encounter. It is important that folks spending a lot of time outside their Home Market consider the criteria carefully. Bank accounts, mailing addresses, vehicle registrations (including tax payments and insurance on the same), property ownership and annual doctor visits all count for evidence of residency – and you only really need two. Remember, Medicare does not require that you demonstrate home, hearth, and gardens – residency means something else. It is entirely a legal construct and should not be conflated with personal concepts of home.
Point 4 – Residency is both a requirement and an opportunity – include Medicare when choosing
Retirees in their Go-Go years have a chance to travel that they may not have enjoyed since college. Choice of residency impacts access to care, taxes, availability of Medicare Supplements, and Advantage plans. As I pointed out in Medigap Plans – The 4 Things You Need to Know and 4 Things You Need to Know About Medicare Part C, the availability and costs of Medicare Plans vary greatly by location. Access to plans means access to healthcare at reasonable costs – so include Medicare considerations when picking your residence for Medicare.
Medicare conflates moving with travel away from your Home Market – and clearly moving may involve travel away from your Home Market. But they are not the same thing – and Medicare recognizes this fact (see point three above). Moving will not invalidate claims for services prior to disenrollment, and there is an automatic SEP for disenrolled people, to ensure no break in coverage. Medicare Advantage Plans may conflate moving with time out of the Home Market, but the objective of the system is to get the beneficiary enrolled in a plan in their Home Market – not to deny care. All Advantage plans are designed around managed care on a local or regional basis.
We are starting to see plans that offer a much broader concept of Home Market, which we applaud. The amount of time that a beneficiary spends in their Home Market should be a decision left entirely up to them. Nationwide carriers and electronic networks to support them have obviated the concept of local venue being a requirement for successful managed care.