Medicare in Mexico > Evaluating the Cost-Effectiveness of Extending Medicare Benefits

Evaluating Whether Extending Coverage to U.S. Retirees in Mexico is Cost-Effective

The cost-effectiveness of Medicare coverage in Mexico will depend on the following:

Adequacy of Reimbursement - Higher reimbursement levels will encourage high-cost providers to participate and reduce the number of beneficiaries who return to the U.S. for care, but will be expensive to the program.

Level of Cost-Sharing Required - Costs to the program will depend on whether the hospital deductible is the same amount as in the U.S. and whether Part B coinsurance is 20% or some dollar amount comparable to what a beneficiary pays in the U.S.
Billing Arrangements - Costs will depend on whether balanced billing is permitted, and to what extent it is permitted. If allowed, balanced billing could increase the number of high-cost providers that participate in the program; however, this option could be costly to retirees.
Retirees' Inclination to Return to the U.S. Care - If Medicare were offered in Mexico, retirees might be less likely to return to the U.S. for care, which is more expensive than medical care in Mexico.

Likelihood of Retirees Relocating to Mexico - If Medicare were covered in Mexico, more U.S. retirees might decide to retire there.
Likelihood of Retirees Permanently Returning to the U.S. and Depending on Public Programs - Fewer U.S. retirees in Mexico might choose to return to the U.S. and depend on social welfare programs if Medicare were covered there. This would potentially reduce the burden on both Medicare and Medicaid, which bears much of the financial burden of long-term care for the indigent.
Out-of-Pocket/Travel Costs to Retirees - Retirees would have to spend less out-of-pocket for medical services if Medicare were covered in Mexico, and would also save on travel costs to the U.S. for medical care to some extent.