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Medicare benefits are not available to US citizens outside the United States. US citizens who are eligible for Medicare benefits and live overseas can access benefits if they return to the United States for medical care. Premiums are increased for those who sign up later than when first eligible, and some American health insurances require the insured to pay Part B premiums even when living abroad. This encourages citizens to travel back to the US for expensive treatments, which would cost far less in their countries of residence.  ACA advocates for the extention of Medicare benefits to US citizens living and working overseas who have contributed to and qualify for these benefits.

Americans overseas are also subject to the 3.8% Net Investment Income Tax (NIIT) and cannot use foreign tax credits paid against the supplement 3.8% NIIT tax. The NIIT tax directly funds the Affordable Care Act which Americans overseas cannot access.

The Cornonavirus Pandemic demonstrated how US citizens overseas were not included in the innoculation efforts even though they paid taxes that supported the delivery of vaccines.  Many US citizens living overseas are in countries where access to the vaccines is limited or where they have little confidence in the vaccines being distributed.

"Double taxation" due to the Net Investment Income Tax (NIIT)

To fund the Affordable Care Act, Congress passed a supplemental 3.8% Net Investment Income Tax (NIIT) tax on some net investment incomes of individuals, estates, and trusts above certain threshold. This new tax cannot be offset by foreign tax credits which results in pure double taxation to fund a program that Americans overseas cannot access or use. See full position paper here.

Coronavirus Pandemic and CARES Act

ACA was the first organization representing overseas Americans to advocate to the Congress, the IRS and Treasury stressing that Americans overseas needed be included in the legislation.  In our letter dated March 23rd, 2020, ACA notes that special consideration is needed for issues such as, filing deadlines, mechanics of advance refunds and credits, need for a US bank account for rebates, loans to small businesses, limitations based on adjusted gross income among others, as these apply to the community of Americans living and working overseas.  

With the passage of the CARES Act legislation on March 27th, ACA immediately prepared a memorandum discussing the tax provisions of the Coronavirus Aid Relief, and Economic Stimulus Act.  The memorandum was intended to inform US citizens abroad and professional advisors, such as tax return preparers who help them and to assist the Treasury Department, IRS and Congress as they dig into the detailed working of the provisions of the law as they turn their efforts to implementation. 

Throughout the CARES Act implementation ACA raised issues such as, the mechanics of electronic transfers (direct deposits), the ability of overseas Americans to provide banking information to the IRS, to the highest levels of the IRS and Treasury with our already established contacts in these offices.  In our communications, ACA has highlighted to the IRS issues Americans overseas may have with online registration. Many online registration tools aren’t set up to accommodate Americans overseas; things like verification of identity through the use of US-based indicia.  If you have lived overseas a long time or never lived in the US, you may not have any.  Additionally, the use of second-level verification through the texting of codes must accommodate for foreign phone numbers, something many online formats are unable to accommodate.  Some of these online tools will not recognize an IP address coming from outside of the United States. 

As issues and problems surfaced with the CARES Act implementation, ACA writes to the IRS and the Treasury Department highlighting problems with the “Get My Payment” online tool and urging them to find a solution for Americans Overseas to quickly and easily apply for recovery rebates. ACA continued to advocate on these issues seeking the support of the National Taxpayer Advocate, Erin M. Collins, in response to her recently released 2021 Objectives Report to Congress, wherein she has provided to Congress systematic advocacy efforts for improving taxpayers experience and her assessment of the IRS’s management of the CARES Act economic stimulus efforts.

On September 25, 2020, ACA wrote to Congress: Americans Overseas Issues need attention not only during a pandemic and on October 19, 2020, ACA wrote to US State Department to Prioritize Overseas Americans' access to Essential US Citizens Servbices

In November, 2020 ACA met with representatives of the US State Department: American Citizen Services to discuss, and bring to the attention of the recent problems with regard to procurement of Social Security numbers and other issues due to the lockdown of US Embassies and Consulates worldwide.

ACA also wrote two important letters to the Congress and Administration noting the lack of support for vaccinating US citizens living and working overseas. Taxpayer monies paid for the development and distribution of the Cornavirus vaccines however, the US government does not have a system in place to insure that all its citizens no matter where they live have access to this medical treatment. ACA advocates for the US government to insure that during times of emergency medical situations such as the Coronavirus pandemic that US citizens overseas should have access to government funded medical treatments. 


Pilot Programs for Medicare Coverage Overseas

Congresswoman Titus' letter notes that some US citizens living overseas return to the US for their medical care because they cannot access their Medicare benefits in the foreign jurisdictions where they live. Many could access medical care at a reduced cost in their resident countries and have these covered by Medicare which would facilitate their medical care and save Medicare in costs. Titus asks that the Centers for Medicaid and Medicare investigate creating a pilot program. ACA maintains that US citizens living and working overseas who are eligible for Medicare be able to access benefits from overseas or be reimbursed by Medicare for in-country medical services.