Healthcare costs: looming obstacle to retirement

A friend recently updated me on her progress toward early retirement. She’s got just about everything in place for her and her husband to retire and move to a nice piece of land in New Mexico. One obstacle is looming – the cost of health insurance. She has a medical condition that requires expensive medications. She has investigated all the angles to reduce her out of pocket costs. She’s particularly angered at how much cheaper the medications are from Canada, yet insurance companies will cover none of it when purchased from those sources. Her present and forecasted health insurance costs are substantial. It’s the one thing holding her back from retiring now and enjoying life on her ranch.

Next to housing the cost of healthcare and insurance is probably the biggest obstacle to retiring early. As we get older we become more aware of the need for access to quality medical care and its costs. This is one of the factors that makes expat retirement particularly appealing. I retired to Thailand, one of the premier medical tourism destinations. Healthcare here is world class, a fraction of the cost in the U.S., and delivered with warmth and hospitality. It is no exaggeration to say that a trip to the hospital can almost be a pleasant experience here (almost, it is still a trip to the hospital). The fact is that the full cost of many procedures here is less than the deductible alone back in the U.S. That is why literally hundreds of thousands of foreigners per year travel here for heart surgery, cancer treatment, joint replacement, dental work, even face lifts.

This changes the formula a lot when considering retirement. The one item that is not substantially cheaper here is medicine available only from western phamaceutical companies. If a local copy of the drug is not available you pay western prices.

Because costs are so low it makes little sense to carry insurance, just pay out of pocket. However, for those needing the perceived security blanket of insurance it is available, both locally and also from western carriers. In fact, some U.S. insurance companies have begun to add Thai hospitals to their preferred provider lists.

There is a good selection of articles on specific medical centers and costs at Thailand medical centers here.

Some other expat retirement destinations also boast high quality medical facilities, although Thailand is by far the leader in the whole medical tourism business. So it is worth considering expat retirement for the healthcare advantage. You might hit your number a lot sooner.

Expat retirement and the Bush dollar

Where you decide to live has a big impact on your cost of living during retirement (obviously). Choosing to live somewhere that is inexpensive yet provides all the things you want in retirement enables you to hit the magic number sooner. Since you don’t have to work you aren’t tied to any specific location so you can live anywhere. For many, including myself, that choice is in another country.

I’m from the U.S. I traveled quite a bit when I was younger to a lot of places that were, as they say, a nice place to visit but I wouldn’t want to live there. By the time I discovered Thailand I had already reached the magic number and then some. It’s just that I didn’t know it yet. But when I got around to running the numbers I realized I was well over the magic number of 25. I could quit my job anytime.

There is a little thing called foreign exchange rates that can play a big part in your retirement plans if you are considering expat retirement. When I retired the U.S. dollar bought about 42 to 45 Thai baht. I kept most of my money in the U.S., transfering money as needed to Thailand. Then we saw the war on terror expand, U.S. debt balloon, and the dollar weaken. In the short span of a couple of months in early 2006 the dollar fell from over 41 to under 38. That’s about a 10% hit to my retirement nest egg in a matter of a couple of months. Fortunately I was well over the magic number of 25 so no worries. But many retired expats in European countries were hurt much worse by the weakening dollar. Some of them lamented on expat forums about 30% hits to their fixed incomes that were forcing them to make drastic changes in their retirement.

So, if you are considering expat retirement you need to remember that currency fluctuations can be sudden and have a big impact. Making plans to mitigate that is important.

Medical treatment in Thailand

I went for a checkup the other day and was reminded again of how great medical care can be. Private hospitals in Thailand provide great medical care and something else that those of us from the west don’t usually expect – great service. And all at a great price – complete checkup, including all blood work, urinalysis, chest xray, ultrasound scan of digestive tract, and consultation with a real doctor runs about 3,500 baht (less than $100 U.S.). For sure that is a small fortune for up-country Thais, but a fraction of what it would cost back in the states. And the warm hospitality of the smiling nurses and doctors is in such contrast to the disinterested and abrupt treatment western medical centers dish out.

Actually, Thailand is a popular destination for “medical tourism”. People from all over the world come here for treatment of all types and turn it into a sort of medical vacation. With some hospitals resembling 4 star hotels that provide world class medical care it is a great option, especially for elective procedures or things that are not covered by insurance in a person’s home country. A couple of years ago my wife had surgery at Bamrungrad Hospital, one of the more well known private hospitals in Bangkok. She spent 4 nights in a private room with an extra bed for me. The treatment was great, even for me! And total cost was less than $2,000 U.S., a fraction of what it would have cost in the west and with incomparable treatment. We felt so fortunate to be in Thailand when the need for the surgery arose.

They have world class facilities for everything, dental, cardiology, cancer, cosmetic surgery, child birth. I highly recommend it as an alternative to stateside medical care.

Overdeveloped nations: the plumbing scam

I remember some of my home improvement projects back in the U.S. Plumbing was always an issue in older homes, what with old galvanized plumbing in many homes, sometimes copper repipe, sometimes an ugly combination of the two. Plumbing jobs were usually messy and sometimes small repairs turned into big jobs as corroded pipe kept breaking off farther and farther into the wall. And copper pipe is expensive and difficult to work with. Plumbers pull down big money.

The entire country of Thailand is plumbed with PVC pipe. It’s strong, reliable, fast, cheap, doesn’t corrode and is easy to install; exceedingly easy to install. Cut it with any type of saw that is handy, slather some PVC glue on it, slap the joints together, and in 10 minutes it is ready. It’s so easy that there are virtually never issues with bad joints, unlike copper with troublesome solder joints. It comes in several thicknesses; the standard one is rated at 13 bars (13 atmospheres of pressure). So it is plenty strong enough for all but extreme high pressure uses.

Why can’t PVC plumbing be used in the U.S.? (Rhetorical question) It’s a scam of course. It is so easy and reliable that plumbers are not needed. The labor unions would have none of that. By working the U.S. system of what I call <em>legalized graft</em> consumers are forced to pay exorbitant rates for plumbing materials and labor. One of the plethora of legal scams in <b>overdeveloped</b> countries like the U.S. Overdeveloped – as in over legislated, over unionized, and over priced.