American Expatriate Costa Rica

Costa Rica Has Obama Care Also: Sort of

According to the immigration policy (Law 8764, Ley General de Migración y Extranjería), which took effect in 2012, foreigners granted residency in Costa Rica are required to enroll in the state heath care system. The system, which dates back to the 1950s provides state-funded medical services to wage earners and the voluntarily enrolled.

Qualifying the national healthcare system or “Caja” as Obamacare is not fully accurate as there is no market or exchanges for private polices, as in the United States.

Mandatory enrollment for foreign residents with pension income usually means paying $200 or more a month. However, an unemployed Costa Rican citizen will typically pay about $30 per month. It’s not unfair if you consider that Costa Ricans who have high pensions and are retired typically pay $200 or more per month. Some expats disagree because they say their pensions come from outside Costa Rica, and should not be subject to a local tax.

The system itself is not perfect, and suffers problems, which is a reason why foreigners who live in Costa Rica are being asked to pay their share. Unfortunately for expats, the system is not always easy for them to use because English is not widely spoken and the families of patients are expected to attend to non-medical needs. For example, these may include nourishment, toiletries, and fetching prescriptions. So, when an non-Spanish speaking expat with little or no family support goes in for a procedure they can be neglected with fatal consequences.

Even expats who come to understand the public medical care system can have a difficult time. For example, an expat may not understand that diagnostic procedures are rationed along with the wait-lists for treatment procedures. However, since diagnostics are relatively cheap, and you can move ahead faster by getting lab tests or other exams done privately.

Despite the recent attention to the tax rates for voluntary plans, the bulk of the income for the system in Costa Rica comes from payroll taxes and self-employment taxes. In the United States, these taxes are collected by the IRS and many Americas are unaware of the flat 15.3 percent total. In Costa Rica, the payroll tax percentage is a whopping 36 percent, and it’s collected directly by Social Security.

Many expats are especially put off by the changes in Costa Rica, given the recent complications caused by Obamacare for Americans abroad. Retirement planning can also be a harrowing experience, given fixed incomes and for some the cost of Medicare.