A Note from Medicare Suggests We Should Subsidize Alien Emigration

By David North on January 14, 2022

Warning: the following may sound too autobiographical, and too dark, for some readers but it relates to our migration and social insurance policies.

A note from Medicare arrived in the mail the other day.

It told me that the government had just spent $162,000 or so on replacing my heart pacemaker; its battery was on the verge of dying. Surgery was involved, apparently expensive surgery.

My first reaction, as a patient, was gratitude for Medicare and to its founder, Lyndon Johnson.

My second reaction, as a policy person, was: “Wouldn’t it be better for the U.S. Treasury if David North were somewhere else in the world?” Of course, it would.

Had I been outside the U.S., Medicare would not cover these costs; I could have taken a car, train, bus, plane, or ambulance from within Mexico or Canada to the nearest port of entry and managed to get that coverage, but had I been further away, and/or not capable of manipulating systems, the battery would have died and placed me in the same boat as about 99 percent of human beings, who get along without a pacemaker.

Or I might have been in a place where someone else’s medical insurance would cover the costs, or I might have been in a location where such things cost much less.

In all of these cases, the Treasury would be ahead by $162,000.

All of this suggests that we should shape our systems to encourage the emigration of elderly aliens or citizens so that they do not run up big medical bills like mine.

This we can do by simply encouraging people to retire abroad to their home countries in some cases, and to new locations for others, all through adjustments to the Social Security system. The mathematical arguments for this are obvious. A person, alien or citizen, in the U.S. is eligible for Medicare (and Medicaid), for SSI, for subsidized housing, for food stamps and the like, as well as for Social Security; the same person overseas is eligible only for Social Security.

There is always some pressure for people to retire to their homelands, where everyone speaks their language, where the climate is probably warmer, and where the Social Security dollar goes further than it does in the U.S.

A recent set of data from the Social Security Administration shows that there are more than 693,000 SSA beneficiaries overseas, people who are, by definition, not covered by Medicare; many of them could be if they were here. What can we do to maximize those numbers, which can be seen in Table 5.J11 of the Annual Statistical Supplement to the Social Security Bulletin?

The 693,000 as of the end of 2020 is a slight increase from the total a year earlier, when it was about 683,000; this is a cumulative population, including some newcomers and others who joined it several decades ago. It is useful for these purposes if we could estimate the number of newcomers and departures from this group.

If, on average, persons, including spouses, widows, widowers, children, the disabled, and retired workers, stayed on benefits for 20 years, a sensible guestimate, we would have an attrition rate of about 5 percent, or 35,000 a year. If the group grew by 10,000 in the recent interval, we would have about 45,000 new cases each year, partially balanced by 35,000 departures.

What can we do to increase that 45,000 a year number (to, among other things, reduce the number of older aliens getting new pacemakers at our expense)? We should make three moves.

First, we should let people know that they can retire overseas; we should publicize it, not just let it happen when it happens. A lot of people do not know of this option.

Second, we should encourage such moves with one-time financial incentives to those retiring on Social Security: If you have not yet left the states, we could meet one-way air travel expenses and add a once-in-a-lifetime bonus of say $5,000 or so. If you return, the bonus would be subtracted from the monthly benefits.

Third, we might also add, say, 5 percent to 10 percent to the monthly benefits, rising slowly as time passes, again with a pay-back provision for those who accept this for a while and then return to the States.

All of this would be designed (but not discussed) as a means of getting rid of those pesky $162,000 medical bills and other welfare-type expenditures.