Leaving New Jersey to Live Abroad? What Happens to Your Medicare

You can keep Medicare when you leave New Jersey for another country. You just can't use much of it there. Original Medicare pays for almost nothing outside the U.S., but your Part B bill keeps coming every month you stay enrolled.

So the real question is what to do with each part of your coverage before you go. Keep the wrong piece and you're paying for a card that sits in a drawer. Drop the wrong piece and you could come home to New Jersey with a lifetime penalty and months with no doctor coverage.

Where Medicare stops working

For Medicare purposes, the U.S. means the 50 states, Washington D.C., Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. Retire to San Juan and your Medicare works the same as it does in New Jersey. Retire to Lisbon, Costa Rica or San Miguel de Allende and it mostly doesn't.

There are only 3 situations where Medicare will pay a foreign hospital:

• You're in the U.S. when an emergency hits, and a hospital across the border is closer than the nearest U.S. hospital that can treat you.
• You're driving through Canada on the most direct route between Alaska and another state when an emergency happens, and the Canadian hospital is closer.
• You live in the U.S. and a foreign hospital is closer to your home than the nearest U.S. hospital that can treat you.

None of those cover a New Jersey retiree who actually lives abroad. And Medicare drug plans can't cover prescriptions you buy outside the U.S., period. If you're only away for a few weeks or months at a time, the rules work a bit differently, and the best Medicare options for frequent travelers are worth comparing before you book.

What happens to each part of Medicare when you move overseas from New Jersey

Part A: keep it

If you or your spouse worked about 10 years in New Jersey or anywhere else in the U.S., Part A costs you nothing. Keeping it while you live abroad costs nothing too, and it's there the day you fly home. There's no upside to dropping it.

If you pay for Part A because you're short on work credits ($311 or $565 a month in 2026), you're in the same spot as everyone deciding on Part B.

Part B: the real decision

Part B is $202.90 a month in 2026 for NJ residents and everyone else, or about $2,435 a year, and more if your income triggers IRMAA. If you get Social Security, it comes out of your check automatically, even while you live abroad. If you don't, Medicare bills you every 3 months.

That's a lot of money for coverage you mostly can't use. It's also the piece that hurts the most if you drop it and come back.

Part D: it ends

To be in a Medicare drug plan, you have to live in the plan's service area. Your New Jersey plan's area covers certain New Jersey counties, and none of them are in Portugal. Once you move abroad, your drug plan goes away.

When you move back to New Jersey or anywhere else in the U.S., you get a Special Enrollment Period that lasts 2 full months after the month you return. Use it. Miss it and you're waiting for the fall Open Enrollment Period, and the Part D late enrollment penalty kicks in once you go 63 days or more without creditable drug coverage.

Medicare Advantage: it ends too

Medicare Advantage plans sold in New Jersey are built around a local network in specific New Jersey counties. Move overseas and you're out of that area, so the plan ends. Some plans pay for emergency or urgent care while you travel abroad, but they're designed for a vacation. They won't work as your main coverage in another country.

The same 2-month window applies when you come back, so you can join an Advantage plan in your new home county, whether that's back in New Jersey or somewhere new. The rules for changing your plan when you relocate work the same way here as they do for a move between states.

Medigap: optional, with a catch

Medigap Plans C, D, F, G, M and N include a foreign travel emergency benefit. It pays 80% of emergency care abroad after a $250 yearly deductible, up to a $50,000 lifetime limit, and only if the care starts within the first 60 days of a trip.

That's useful for a 6-week trip to Italy. It won't do much for someone living in Italy full time. You can keep paying for your policy while you're overseas (the insurer can't cancel it as long as you pay). The catch is what happens if you cancel it.

Should you drop Part B when you move abroad?

Run the numbers for a New Jersey retiree who moves abroad, drops Part B, and comes back 5 years later.

• What you save: 60 months at $202.90 is $12,174 at 2026 prices.
• What the penalty costs: 10% of the standard premium for each full 12-month period without Part B. Five years is 50%, or about $101 a month extra at 2026 rates, for as long as you have Part B. The premium goes up most years, so the penalty does too.
• Break-even: about 10 years of penalty payments to burn through what you saved.

On those numbers alone, dropping Part B can look fine. But 2 other costs don't show up in that math.

The wait. When you come back, you can only re-enroll in Part B during the General Enrollment Period, January 1 through March 31. Coverage starts the month after you sign up. If you move home in April 2027, the earliest your Part B can start is February 2028. That's 9 months of paying cash for every doctor visit, lab test and outpatient procedure.

Medigap. Your 6-month Medigap open enrollment happens once, when you first get Part B at 65. It doesn't restart when you re-enroll years later. So if you drop your Medigap policy along with Part B, you'll probably have to pass medical underwriting to buy a new one, and at 75 with a health history, that's a real risk. Your Medigap guaranteed issue rights only cover specific situations, and moving back from overseas usually isn't one of them. Check with a New Jersey agent or the New Jersey insurance department too, since a few states give Medigap buyers extra rights.

Mike Alexander, a licensed Medicare agent in Houston, Texas, faced this decision himself. "I lived in Costa Rica for a few years but did not drop Part B, as I had coverage when I would fly back to the U.S. from time to time," he says. "You do not want to drop Part B, as you would also be assessed a penalty for each year you were not enrolled."

Our take: if there's any real chance you'll move back to New Jersey, or you fly home for care, keep Part B. If you're leaving for good and you have solid coverage where you're going, dropping it is a reasonable call.

"We always encourage clients to really think through, is the decision permanent? Is there any chance that they're coming back?" says Steven Litzsinger, a licensed Medicare agent in Kirkwood, Missouri. "If there's a possibility, we highly recommend maintaining it. But if you know that you're going and not coming back, you can certainly cancel or drop your Medicare Part B."

Two exceptions to the penalty

• Volunteering abroad. If you volunteer outside the U.S. for a tax-exempt organization and have health insurance that covers you there, you get a 6-month Special Enrollment Period when the volunteer work or that coverage ends. No penalty.
• You lived abroad when you turned 65 and don't qualify for Social Security benefits. When you move back, you get 3 months to sign up for Part B (and buy Part A) with no late penalty.

Retiring overseas and dropping Part B doesn't fall under either one. You'll owe the full Part B late enrollment penalty.

How to drop Part B if you decide to

1. Contact Social Security (a local New Jersey office or by phone), which handles Part B enrollment. You'll fill out form CMS-1763, usually during an interview where they walk you through the penalty risk.
2. Your Part B ends at the end of the month after the month you file. Keep paying until then.
3. Keep Part A. It's free and it keeps your Medicare number active.
4. Cancel any Medigap or drug plan yourself. Dropping Part B doesn't automatically cancel those.

Coming back: your re-entry checklist

1. Update your address with Social Security as soon as you have a New Jersey or other U.S. address.
2. Join a New Jersey drug plan or Medicare Advantage plan within 2 full months after the month you move back.
3. Re-enroll in Part B during the next January 1 to March 31 window if you dropped it.
4. Shop for Medigap early. New Jersey insurers will likely ask underwriting questions unless you kept your policy the whole time.
5. Bridge the gap. If you'll have months without Part B, price a short-term plan or travel medical policy that covers the U.S.

Coverage while you live overseas

Since your New Jersey Medicare coverage won't follow you, you'll need something else where you live. The usual options:

• Your new country's public system. Many countries let legal residents join, sometimes for a fee. Rules vary a lot by country and visa type.
• International health insurance for expats. These plans are built for people living abroad, and many can include coverage on trips back to the U.S.
• Travel medical insurance. Fine for short trips. It's the wrong tool as your only coverage while you live abroad full time.

Common questions

Do I lose Medicare if I move out of the country from New Jersey?
No. Part A stays as long as you're entitled to it, and Part B stays as long as you pay the premium. You just can't use either one in most places outside the U.S.

Does Medicare work in Puerto Rico or Guam?
Yes. Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands and American Samoa all count as the U.S. for Medicare.

Can I get reimbursed for a foreign hospital bill?
Only in the 3 situations above. Foreign hospitals don't have to bill Medicare, so you may need to pay up front and file form CMS-1490S yourself.

Will the Part D penalty apply to the years I was abroad?
Join a drug plan inside your 2-month window after moving back and ask the plan to confirm how it counted your time away. If you get a penalty notice you think is wrong, you have 60 days to ask for a reconsideration.