Internationalize to Escape Obamacare

Take a look at the list below. What are the first things that come to mind?

  • The Patriot Act
  • The No Child Left Behind Act
  • The Dodd-Frank Wall Street Reform and Consumer Protection Act
  • The American Recovery and Reinvestment Act of 2009 (the so-called "stimulus" package in case you forgot)
  • The Iraq Liberation Act
  • The Marketplace Fairness Act (Internet sales tax)

This is obviously not an exhaustive list, but I think you get the point.

Is the Patriot Act really "patriotic"? Did the American Recovery and Reinvestment Act of 2009 really help the economy?

The first thing that comes to my mind is that I am being misled by the names of these laws.

Politicians use such language (propaganda really) to assist in cramming unpopular edicts down a skeptical public's throat, like trying to give your pet medicine it doesn't want to take.

You should instinctively believe the opposite of what these people are telling you. It will invariably be much closer to the truth of the matter.

So it should come as a surprise to no one that the so-called "Patient Protection and Affordable Care Act" (Obamacare) is another monstrosity wrapped in an Orwellian name.

The part of Obamacare I find most egregious is the individual mandate, (referred to in the healthcare law as the so-called "individual shared responsibility provision"), which coerces Americans to participate in yet another government-run Ponzi scheme. And the term Ponzi, or pyramid, scheme is not hyperbole. Obamacare wouldn't work without forcing young and relatively healthier adults (the bottom of the pyramid) to pay into a system they otherwise might rationally choose not to participate in.

The individual mandate is creating another nearly inescapable ball-and-chain-like tax burden, including for some Americans living abroad.

So, is there any way internationalization can help you avoid this disaster?

There are a couple of options. Here is what the IRS, which will be enforcing Obamacare, has to say about it:

Are US citizens living abroad subject to the individual shared responsibility provision ("individual mandate")?

Yes. However, U.S. citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having minimum essential coverage for the year (or period).

Are residents of the territories subject to the individual shared responsibility provision ("individual mandate")?

All bona fide residents of the United States territories are treated by law as having minimum essential coverage. They are not required to take any action to comply with the individual shared responsibility provision.

There you have it. Americans abroad are only exempt if they are outside the US for 330 days per year or if they become residents of US territories, like Puerto Rico.

These are pretty strict requirements and are similar to those for the federal income tax for Americans living abroad. As you know, Americans are the only people on the planet who are subjected to a system of citizenship based taxation that is actually enforced (see here).

Similar to the exemptions for Obamacare, there are certain exemptions to the federal income tax for Americans living abroad for more than 330 days per year (see here) and for those who become residents of Puerto Rico (see here).

So with the individual mandate screwing the young people at the bottom of this pyramid scheme, what about the people at the top ostensibly getting the benefits?

As one of our speakers at the recent Casey Research Summit, Dr. Elizabeth Lee Vliet pointed out it is not exactly a secret that Obamacare is going to increase the demand for healthcare. Dr. Vliet also said that not much is being done to address the supply side of the equation: like adding more doctors and hospitals to take care of 30 million more people being added to the system. In all likelihood that means longer waits and rationing of care. You can catch her extremely informative presentation here.

In Canada it is estimated that nearly 50,000 people each year decide to pay out of pocket to travel abroad for immediate, relatively inexpensive, and often higher quality treatment options. One of the more important points Dr. Vliet made was that Americans need to start planning to get foreign financial accounts set up now in order to pay for healthcare delayed or denied in the US, just as Canadians have been doing for many years. You can find our specific guidance on how to set up foreign financial accounts, at institutions still willing to accept American clients, by clicking here.

In short, I fully expect that Obamacare will push Americans to look for ways to internationalize their healthcare options.

My colleague Dennis Miller recently chimed in on this topic:

In the fall of 2009, my wife Jo and I went to a town hall meeting in Illinois. The guest speaker was a member of the House of Representatives who served on the committee putting together the law now known as Obamacare. The Congressman stood next to a draft of the bill and answered our questions by reading straight from the text. Most of us left terrified, hoping the bill would never pass.

Jo and I were so aghast that we attended several conferences and even traveled to Costa Rica and Panama to investigate international healthcare options. The thought of going to a hospital where we didn't even speak the language was unnerving, but we needed to know our options.

We spent time with the president of the Johns Hopkins Hospital in Panama—a real world-class facility with mostly US-trained and board-certified physicians. He laid out the details of international medicine for us: "We are gearing up for an onslaught of Americans coming here for healthcare which they will find denied or delayed in the United States." Much like Canada, eventually Americans will have to leave the country to get quality, timely healthcare.

Internationalizing your healthcare options is not just about higher quality and timely options; it's also about cheaper treatment—much cheaper in many cases.

This short video from Reason sums it up rather nicely.

Patients Beyond Borders, a top resource for medical tourism, lists the most popular medical tourism destinations and their relative discounts compared to US prices.

  • Brazil: 25-40%
  • Mexico: 40-65%
  • Costa Rica: 40-65%
  • Singapore: 30-45%
  • India: 65-90%
  • Taiwan: 40-55%
  • Korea: 30-45%
  • Thailand: 50-70%
  • Malaysia: 65-80%
  • Turkey: 50-65

Medical tourism and the broader concept of internationalizing your healthcare options are important topics. Be sure to get the free International Man Communiqué to stay up to date on the best options.  

Nick Giambruno

Nick is Doug Casey’s globetrotting companion and is the Senior Editor of Casey Research’s International Man. He writes about economics, offshore banking, second passports, value investing in crisis markets, geopolitics, and surviving a financial collapse, among other topics. In short, Nick’s work helps people make the most of their personal freedom and financial opportunity around the world. To get his free video crash course, click here.

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