Paying For Medical Care And Hospital Costs Overseas

A reader wrote this week to warn us about Nicaragua’s Hospital Bautista.

Recently, the guy wasn’t feeling well, so his wife took him to the Hospital Bautista in Managua. By the time they arrived, the guy had passed out. The hospital told his wife that, to admit her husband, they’d need to take her debit card.

The wife, who is Nicaraguan, obliged.

The next day when the reader was feeling better and resting in his hospital bed, he was presented with a bill for costs that had already been paid using the debit card. The bill included a litany of tests that the hospital hadn’t done but “intended to do.”

The reader protested the bill, but the hospital replied to say that it doesn’t give refunds. They recommended that he stay and have the tests done.

The next day the reader was presented with another bill, which, funnily enough, was for exactly the same amount as he had in his bank account. It would seem the hospital kept charging his debit card until they couldn’t charge any more.

No additional tests or procedures were done, and some of the original tests were never done.

The reader got himself together to check out as quick as he could. Meantime, the hospital staff told his wife there were more pending charges and asked how much cash was in her husband’s wallet. Again, funnily enough, that was how much the pending charge was for.

The first lesson here is that one shouldn’t frequent Nicaragua’s Hospital Bautista. The second lesson is one I remind you of often. Don’t use your debit card to pay for things…especially overseas.

You have little to no protection when using a debit card for a purchase overseas. A hospital in Nicaragua can keep charging the card until you run out of money. A hotel clerk in Italy can clone your card and drain your account. Etc.

It is not unusual to be asked for payment in advance of checking into a hospital overseas. In most cases, you’ll be required to leave a deposit before being admitted to an emergency room. Use a credit card.

I had to take my mother to the emergency room in Panama a few years ago for a cut on her hand from a broken glass. The hospital let her into the emergency room only after they had put a hold on her credit card for some minimum amount (I think it was US$250). When the doctors were done with her and she checked out, the hospital released the hold and ran a charge through for the actual amount, which was less than the hold amount.

Another emergency room experience in Panama didn’t go as smoothly for a friend a few years ago. This friend had appendicitis and needed emergency surgery. The hospital wouldn’t admit her until she put down a 50% deposit, which amounted to around US$2,000.

The girl didn’t have a credit card with that kind of limit so she started calling friends. One of her girlfriends got cash from an ATM to take to her in the emergency room. The hospital admitted her and performed the surgery.

When it came time for my friend to be discharged, the hospital wouldn’t let her go until she paid her bill in full. Again, she had to call friends, including me, who helped her come up with the remaining US$2,000.

This scene is played out in Latin America in particular every day. In this part of the world, there are no laws requiring hospitals to treat patients first and ask about payment later as there are in the United States. So, if you don’t have insurance, hospitals insist on payment up front.

If you do have insurance, the hospital still may require a deposit if they’re not sure they’ll be able to collect from your insurer. In most cases, you’ll have to pay out of pocket and then submit the bills for reimbursement from your insurance carrier.

It’s something to think about before heading overseas. You want to look into your insurance options and make a plan for handling medical expenses wherever you’ll be spending time, whether as an expat or a tourist.

Whatever you do, don’t hand over your debit card to anybody.

Lief Simon

“Lief, I enjoy your newsletter and learn so much from you. However, I’m confused on one issue.

“You’ve mentioned before that one must pay taxes on all worldwide income in Mexico. Does that mean if I establish residency in Mexico, my U.S. pension will be taxed in the United States and then again in Mexico? If so, at what percent will it be taxed in Mexico? That seems like a huge negative to purchasing property and/or moving to Mexico. What would the benefit be of establishing residency in Mexico since there is double taxation for Americans?”

C.B.

Thanks to the tax treaty that the United States and Mexico have signed, your pension income would be taxed in one country only. You can read more here.