The prohibitive cost of healthcare in the US is making Americans choose or consider expatriation. The latest research from the health policy NGO KFF shows that half of American adults struggle to afford medical care. It should come as no surprise that many are heading to Europe, where public healthcare systems tend to be more developed and well-funded. Others are opting for Latin America, where private healthcare is affordable for expats who earn in dollars.
A quarter of Americans have to skip some form of medical care
The Federal Reserve Board, which is in charge of monetary policies in the US government, published the report Economic Well-Being of US Households in 2023 in May. This report details how health costs can be a financial burden for many Americans. Their findings echo those of the NGO KFF.
Both studies found that 25-27% of Americans had to skip some form of medical care last year because they could not afford it. Uninsured Americans did that more frequently — according to the think tank Urban Institute, there are currently 27 million people without health insurance in the US, and this includes some expats or immigrants in the country. They often had to skip dental care (which insurance plans often do not cover!), doctor appointments and prescribed medication.
Even Americans and expats in the US who do have insurance face financial stress over healthcare costs. Insured people must still pay out-of-pocket costs their insurance plan will not cover. Statista points out that these out-of-pocket expenses keep rising and show no sign of slowing down. In the early 2010s, it was around $1000 per person (per capita) every year, but that number is now approaching $1500.
For complex procedures like childbirth in a hospital, the one-time out-of-pocket cost can be around $3000! Medical emergencies force Americans to fork out $1000-2000, discloses the Federal Reserve Board's report. Given how high costs can be even for insured individuals, it should come as no surprise that Americans' top healthcare-related demand is lowering out-of-pocket expenses (KFF).
On the forum of Expat.com, one expat from California explains how the for-profit model of American healthcare can prove to be a problem for regular people. He relates how he himself prefers flying to Mexico for dental care because the combined cost of Mexican private healthcare and the trip remains lower than the cost of only the treatment in the US. The low level of regulation of pharmaceutical pricing in this for-profit model also makes drugs more expensive in the US than elsewhere. ASPE, an advisory group of the US Department of Health, revealed in early 2024 that medicines costs 2-3 times more in the US.
The college debt crisis in the US is well-known, but many Americans are also plagued by healthcare debt. In the KFF's study, 41% of respondents say that they have some form of medical debt. It can be credit card debt, money borrowed from friends and family to buy prescription drugs, etc. Efforts have been made to allow more people to qualify for Medicaid (the state-sponsored health insurance program for low-income individuals), but the US is still a long way from having an affordable state-funded healthcare system.
Americans seek more affordable care in Europe's public healthcare systems
Healthcare is a major source of financial stress for Americans. So, it's understandable that many are choosing to move abroad.
Euronews Travel reports that digital nomad visas rather than traditional work visas are more popular among these expats or prospective expats. Why could this be the case? Digital nomad visas are usually easier to get because there is no need to have a job offer or be sponsored by a foreign employer before the big move. They also allow American expats to keep working remotely for American companies and earn in dollars, which is an advantage if they are moving somewhere with a lower cost-of-living and a weaker currency.
While Canada remains a popular expat destination for Americans, primarily European and Latin American countries offer digital nomad visas. All have a minimum income requirement, but higher salaries in the US compared to other parts of the world tend to make it uncomplicated for middle-class Americans to qualify. In Portugal, for instance, this requirement is €3280 (or around $3500) per month, which makes Americans earning at least $42,000 per year eligible. It's about the same in Mexico, where the income requirement is $3,275 (or $39,300 annually).
European countries have a good reputation for well-established public healthcare systems. Of course, these systems are not perfect. They are often beset by staffing shortages, long waiting times and tiring bureaucracy. But even with these issues, and even when American expats are not eligible for universal coverage, the cost of healthcare remains significantly lower in these European systems than back home.
The Portugal News reports that private health insurance for expats from Portuguese providers can cost a mere €25-75 per month. In comparison, insurance in the US costs an astronomical $400-1,100 per month (Forbes Advisor). Even out-of-pocket expenses are substantially lower. The debt help organization Debt.org indicates that emergency overnight stays in American hospitals cost between $2000-4000 per night, with prices varying between states (California is the most expensive state!). On the other side of the world, in Portugal, it's only a quarter of that cost, and sometimes even less if few tests/procedures are carried out during the stay.
The situation is quite similar in other European countries like Spain and Italy. Just this year, the Spanish newspaper El Confidencial reported how some Americans in Spain have been pleasantly surprised to find out that a visit to the doctor can cost as little as $30 even without medical insurance. Like Portugal, these other two sunny Southern European countries also offer digital nomad visas.
Medical tourism in Latin America is booming thanks to American tourists and expats
Latin American countries like Mexico, Costa Rica and Colombia attract an increasing number of American tourists and expats who seek affordable medical care, explains the market research platform Greenbook. It's created a trend in medical tourism in the area, i.e., traveling with the main goal of seeking healthcare.
Americans rarely head south for regular checkups or simple, non-surgical procedures. Instead, they often turn to Latin America if they have more complex or expensive medical needs, such as surgeries, or want to undergo elective procedures (e.g., fertility treatment, weight loss surgery). It is also more affordable to go to Latin America for dental care that their regular insurance plan in the US will not cover.
The strength of the US dollar makes even the best private Latin American healthcare affordable for American medical tourists and expats. There remain some regulatory and safety concerns around private healthcare in the region, warns GreenBook, so it is important to choose trustworthy providers (ask the provider about its licenses, look for feedback from previous patients, etc.).
Let's have a look at Mexico. The Mexican financial website Crédito Maestro reports that a visit to the GP in the country costs only $17-30. Consulting a specialist like a cardiologist is also affordable at $30-60. An overnight hospitalization tends to cost around $400-500, even without insurance.
On the Expat.com forum, longtime American expats in Mexico talk about what they like about healthcare services there. One expat finds that doctors in Mexico do not try to make him take unnecessary medical tests just to get more money out of him. Unfortunately, since 2020, expats who are not employed by a Mexican company (e.g., digital nomads) can no longer subscribe to public health insurance. Private health insurance is not that cheap at around $500 per month, reports Yahoo Finance, but as previously said, many health services are very affordable even without insurance.
There has been an uptick in the number of Americans moving to Mexico, especially to the capital Mexico City. A study by the Pew Research Centre even revealed a surprising trend: in the last few years, more people have been moving from the US to Mexico than the other way around! Migration is not always from the Global South to Global North when basic needs are more expensive in wealthier countries.
Useful links:
Americans' Challenges with Health Care Costs | KFF
The Fed - Economic Well-Being of U.S. Households (SHED) (federalreserve.gov)
The Health Coverage of Noncitizens in the United States, 2024 (urban.org)
Why Are Vision and Dental Insurance Separate? (investopedia.com)
Hospital Births Are Expensive—Here Is What To Expect (parents.com)
