Healthcare & Medicare Issues
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.
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 has been dialoguing with the IRS about problems Americans overseas continue to face in tracking and receiving their EIP/Recovery Rebates.
Find out more here.