Medicare & Healthcare

What is the problem?

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. 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 Coronavirus Pandemic demonstrated how US citizens overseas were not included in the inoculation 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.

What are we doing about it?

ACA advocates for the extension of Medicare benefits to US citizens living and working overseas who have contributed to and qualify for these benefits.

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.

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 because of the reliance on US-based indicia 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. 

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 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

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. 

Recently Representative Espaillat introduced legislation that calls for a pilot program to be tested that allows Americans to use their Medicare benefits in at least 11 countries.  The legislation, the Earned Benefits and Family Reunification Act, was introduced into Congress in October of 2023 and ACA has meet with Representative Espaillat's offices and is keeping updated on the legislation as it moves through Congress.


How can you help?

What has been achieved so far?

A recent lawsuit heard in the US Claims Court resulted in a decision allowing for the use of Foreign Tax Credits to offset the Net Investment Income Tax (NII). Although the case relates specifically to the use of French taxes to offset the NII through an interpretation of the French-American tax treaty, the implications could go further and include all countries with US tax treaties. This could signal a wider acceptance of foreign tax credits against the NIIT

View our submissions to Congress on this issue and others here

How can I find out more?