Imagine being a retiree and you need medical attention. Medicare is covering much of your costs, which are very expensive, but you still need a more affordable option. You consider going abroad to a destination with cheaper medical options.
Now imagine you're a doctor in Puerto Rico, and your island's economy is in the tank. You've got skills, so you consider taking them off-island to a more prosperous clientele. You're licensed to practice in the U.S., but you'd have to leave behind your beautiful island lifestyle.
Wait, before any of you go anywhere, give this idea a whirl: Procedures covered by Medicare cost about half as much in Puerto Rico as the do in U.S. proper, and the federal government has to bail out the island anyway, so why not do it with Medicare payments?.
What? That's right. Medicare tourism - a solution to the island's economic problems, an add-on vacation for retirees needing medical treatment, and a much more affordable way for the federal government to help Puerto Rico recover from its economic woes.
That's one solution being offered by Andrew Biggs, a member of the Financial Oversight and Management Board for Puerto Rico.
The roughly $5,000 annual cost for Medicare beneficiaries in Puerto Rico is only half that of the 50 U.S. states. In states such as New York and Florida, which have easy air access to Puerto Rico, Medicare costs per enrollee top $12,000. For every Medicare procedure undertaken in Puerto Rico, the federal government's costs are cut roughly in half.
But why should Americans living in the mainland U.S. travel to Puerto Rico for Medicare procedures? That is where Congress could help. Congress could enact legislation refunding to Medicare patients traveling to Puerto Rico half the difference between the island's Medicare cost and the costs Medicare would pay in the 50 states. For major procedures such as a knee replacement those savings might easily cover the cost of travel to Puerto Rico while leaving some extra for the patient. Indeed, Congress might go further and extend the rebate for several years to a mainland resident who retires to Puerto Rico. The roughly $2,500 annual rebate to Medicare beneficiaries could make retiring to Puerto Rico, a beautiful location in its own right, very attractive.
Medicare tourism would not only help the federal budget and patients' pocketbooks, but Puerto Rico itself. Medicare tourism would fill hotel rooms and restaurants with patients and their spouses. More importantly, Medicare tourism would help employ doctors and other health providers on the island. This would not only retain a relatively prosperous segment of Puerto Rico's population, but also help maintain the core health infrastructure that benefits all Puerto Ricans.
Financial planning, affordable incentives, vacation in a beautiful Caribbean locale, and quality medical care? Heck, yeah.