Americans living in Israel should get Medicare benefits

American seniors today who move overseas are unable to avail themselves of their Medicare benefits for which they have paid for many years. The FY 2022 US Appropriations Bill, signed by President Biden, contains a provision encouraging the US Department of Health and Human Services to create a pilot program enabling American citizens who want to retire overseas or are currently overseas but return regularly to the US for their medical care to be able to use local healthcare benefits while having the US government pay for these services. 

Based on a study completed in 2020, such a program would benefit an estimated two million to four million Americans. This would translate into a pilot size of approximately 150,000 lives across 10 to 15 countries, including Israel. The need for a large number of citizens per country is dictated by the need for statistical powering in seniors, who tend to suffer from a variety of diseases. 

This is a good policy for the US government for five main reasons:

1. It would provide savings to the Medicare Trust Fund, estimated at $100,000 per beneficiary. These savings were demonstrated in a study completed in 2022 of nearly 4,800 Americans living overseas. The study also showed that roughly 36% of all non-seniors would like to have their parents/grandparents join them overseas if they could receive the healthcare benefits. Furthermore, nearly 67% of the aforementioned seniors had serious long-term chronic diseases. At full program strength (two million to four million people), the anticipated savings would be in the range of $200 billion to $400 billion.
2. It would reduce the bottleneck on the US medical infrastructure, as over 15 million Americans will turn 65 over the coming decade and will become heavy users of the medical system. This is a direct outcome of America’s demographics – the aging of the baby boomer generation. The large shortage of doctors, nurses, radiologists, hospital beds, etc., has been well documented in the scientific literature. It is also well recognized that the shortages are chronic and will not be able to be averted – we are simply too late. The effects will include hospital lines, as we saw during COVID, become a daily occurrence.  
3. It would help first-generation Americans who lose their English-language skills as they age and require caregivers who speak their native language. For example, a Korean woman who married a GI during the Korean war and then went to the US. The husband passed away, and the Korean woman is losing her English due to senility. She would require a Korean caregiver to even explain her basic needs.
4. It would help US veterans match their current TRICARE benefits and those of Medicare internationally. For veterans who retire overseas, once they begin to become heavy users of the healthcare system, having a single provider/payor would simplify their lives and the lives of those around them with regard to treatments and reimbursements.
5. It would enable bringing the best practices from around the world to the US. For instance, Israel established the hospital at home and is in touch with non-ambulatory seniors once a month, thus reducing visits to the emergency room. Bringing these practices to the US would reduce overall healthcare costs.

Advantages for Israel

1. Today, the cost of medical care for the average Israeli senior from 65 to statistically predicted death is about $130,000. The US cost is approximately $300,000. Using a 30% savings model, the US would pay about $200,000 per senior enrolled in the pilot. This would provide an extra $70,000 over a lifetime for a senior immigrant. At an estimated 10,000-15,000 seniors, these funds could be used to build out the local medical infrastructure needed for the incoming US senior population, as well as much of Israel’s local population.
2. Increase senior aliyah from the United States. Today, the State of Israel does not encourage seniors to retire in Israel because of the costs to the country for providing healthcare via the health funds. Young olim have a lifetime of contributions they will make to Bituach Leumi. Seniors are viewed as an expense. Of course, Israel will welcome them on aliyah, but the country will not actively seek to encourage seniors to make aliyah. This would change if such a pilot/program were implemented and was confirmed by Nefesh B’Nefesh.
3. Job creation. It is estimated that for each senior oleh, an additional job will be created in Israel. This would imply that Israel could create an additional 10,000 to 15,000 new jobs. 
4. Creation in Israel as a center for US senior retirement – building upon the country’s medical reputation and Medicare portability. The pilot and program would not limit Israel to offer Jewish seniors to come to Israel. We could open our system to senior residents of all faiths and create a much larger community of seniors retiring in Israel – creating more jobs and driving a new retirement industry in the country. 

How the pilot would work

It is envisioned that the pilot and program would be run through a de novo Medicare Advantage program utilizing extant Center for Medicare and Medicaid Innovation protocols. Americans currently residing in the US or proving that they receive their healthcare benefits in the US would sign up for the Medicare Advantage program and receive a Medicare Advantage card. In the case of Israel, the Americans would register with one of the health funds and receive their healthcare benefits through it – perhaps with a dedicated English-speaking line. The level of healthcare services would need to be negotiated, as would the inclusion of drugs not in the health basket. The de novo Medicare Advantage plan would pay the Health Ministry/health funds for the services rendered. The Americans would receive their benefits in Israel. Additionally, should the Americans need or want to return to the US, they would also have coverage in the US.

One would hope that HHS would include this pilot in their FY24 justifications to Congress, as required by the FY22 Appropriations report language. This would hopefully imply a January 2024 start date.  ■

The author, a serial entrepreneur, is the founder of The Governmental Savings Institute. He has spent the last four years pursuing this project in what started as a labor of love for his parents. One can find more information at www.govtsavings.org.