Does Medicare Work in Costa Rica?
No. Medicare does not pay for healthcare services received outside the United States. This applies to Part A, Part B, Part D, and most supplemental coverage. There are narrow exceptions for emergency care near the US border and certain situations on cruise ships, but for anyone splitting time between the US and Costa Rica, Medicare is effectively a US-only benefit.
That's the short answer. The longer answer, the one that actually matters for your finances, is about what to do with that information.
Why This Decision Matters More Than Most People Think
"The Medicare decision is one of the most expensive mistakes I see families make when planning a move to Costa Rica. Drop Part B too early, and you're locked into a permanent penalty if you ever come back. Keep it too long, and you're spending $2,200 a year on coverage you can't use. Neither option is obviously wrong, which is exactly what makes it dangerous." Brennan Vitali, CFP, Vitality Wealth Planning
Most financial planning conversations about Costa Rica focus on taxes, cost of living, and residency. Medicare gets mentioned in passing, usually as "it doesn't work abroad." That's true, but it skips the part where the decision to keep or drop each piece of Medicare has permanent financial consequences.
What Does Each Part of Medicare Cover, and Does It Work in Costa Rica?
Here's how each component of Medicare applies when you're spending time in Costa Rica:
| Medicare Component | What It Covers in the US | Works in Costa Rica? | Monthly Cost (2026) | Keep or Drop? |
|---|---|---|---|---|
| Part A (Hospital Insurance) | Inpatient hospital stays, skilled nursing, hospice | No foreign coverage | $0 if you paid Medicare taxes 10+ years | Keep. No cost, no penalty. |
| Part B (Medical Insurance) | Doctor visits, outpatient care, preventive services, durable medical equipment | No foreign coverage | $185/month (Medicare.gov) | Depends on your return probability. |
| Part D (Prescription Drugs) | Prescription medications at US pharmacies | No. US pharmacies only. | $30-$80/month (varies by plan) | Usually drop. CR prescriptions are far cheaper. |
| Medigap (Supplement Plans) | Covers gaps in Part A and Part B (deductibles, coinsurance) | Limited. Plans C, D, F, G, M, N cover foreign travel emergencies only (first 60 days, $250 deductible, 20% coinsurance, $50,000 lifetime max) | $100-$300/month (varies by plan and age) | Usually drop if not maintaining Part B. |
| Medicare Advantage (Part C) | Bundles Part A + B + often Part D through private insurers | No. Network-based, US only. | Varies ($0-$150/month beyond Part B premium) | Drop if leaving the US. Network restrictions make it unusable. |
Source: Medicare.gov, Medicare Costs at a Glance, updated for 2026. Part B standard premium confirmed at $185/month per CMS.gov 2026 announcement.
Should You Keep Medicare Part A?
Yes. This is the easy one.
If you worked and paid Medicare taxes for at least 10 years (40 quarters), Part A is premium-free. There is no late enrollment penalty, no ongoing cost, and no downside to keeping it. Even if you never use it, it costs you nothing.
Part A covers inpatient hospital stays, skilled nursing facility care, and hospice in the US. If you fly back to the US for a major procedure or medical emergency, Part A covers the hospital portion.
Per SSA.gov, Part A enrollment is automatic when you start receiving Social Security benefits. If you delayed Social Security, you can enroll in Part A separately at age 65 without penalty.
Should You Keep Medicare Part B?
This is where the money is, and where most people get it wrong.
Part B costs $185/month in 2026. That's $2,220/year for coverage that does not work in Costa Rica. Over five years, that's $11,100 in premiums for coverage you cannot use while abroad (and the premium increases annually).
But here's what makes Part B different from other insurance decisions: the late enrollment penalty.
The Part B Late Enrollment Penalty
Per Medicare.gov, the penalty is 10% of the standard premium for every full 12-month period you could have had Part B but didn't sign up. The penalty is permanent. It never goes away.
- Skip 3 years: 30% penalty. Your $185 premium becomes $240.50/month, for life.
- Skip 5 years: 50% penalty. Your $185 premium becomes $277.50/month, for life.
- Skip 10 years: 100% penalty. Your $185 premium becomes $370/month, for life.
And you can only re-enroll during the General Enrollment Period (January 1 through March 31 each year), with coverage not starting until July 1. That gap between deciding to come back and having active coverage can be three to six months.
The decision framework:
| Your Situation | Recommendation | Why |
|---|---|---|
| Splitting time 50/50 between US and CR | Keep Part B | You're using US healthcare regularly |
| 90%+ in Costa Rica, unlikely to return | Strong case to drop | Premiums are dead money; CR healthcare is excellent and affordable |
| Planning to stay but uncertain | Keep for 2-3 years, then reassess | Gives you time to confirm the move without locking in a penalty |
| Returning to the US is a real possibility within 5 years | Keep Part B | The penalty math makes dropping it expensive if you come back |
There is no Special Enrollment Period for returning expats unless you had qualifying employer-sponsored group coverage abroad. CAJA and private Costa Rican insurance do not qualify. This is a critical distinction that catches people off guard, per Medicare.gov's Special Enrollment Period rules.
What About Medicare Part D?
Part D covers prescription drugs filled at US pharmacies. It does not cover medications purchased in Costa Rica.
Most common medications are available at Costa Rican pharmacies (farmacias) at dramatically lower prices. Many do not require a prescription. A medication that costs $300/month in the US might cost $20-$40 at a Costa Rican pharmacy.
Part D also has a late enrollment penalty: 1% of the national base beneficiary premium ($36.78 in 2026, per CMS.gov) for every month you could have had Part D but didn't. The penalty is permanent, but smaller than Part B's.
For most families spending the majority of their time in Costa Rica, dropping Part D and purchasing medications locally makes financial sense. If you take specialty medications that aren't available in Costa Rica, keep Part D or verify availability before dropping it.
Does Medigap Cover Anything in Costa Rica?
Medigap (Medicare Supplement) plans are designed to cover the gaps in Part A and Part B: deductibles, coinsurance, and copayments. Since Part A and Part B don't cover foreign care, Medigap mostly doesn't either.
The exception: Medigap plans C, D, F, G, M, and N include a foreign travel emergency benefit. Per Medicare.gov, this covers:
- Emergency care during the first 60 days of a foreign trip
- $250 deductible
- 20% coinsurance after deductible
- $50,000 lifetime maximum
This is bare-minimum emergency coverage. It is not a replacement for proper health insurance in Costa Rica. If you're maintaining Part B for return trips, a Medigap plan can fill in the gaps during those US visits. If you've dropped Part B, Medigap serves no purpose.
What Do Expats in Costa Rica Use Instead of Medicare?
Most Americans in Costa Rica use a combination of two systems:
1. CAJA (Costa Rica's public healthcare system)
After obtaining legal residency (which takes 10-24 months), residents must enroll in CAJA. Contributions run 7-11% of declared income. For a pensionado visa holder declaring $1,000/month, that's roughly $65/month. CAJA covers everything: doctor visits, specialist care, surgery, prescriptions, lab work. No copays, no deductibles.
The trade-off is wait times for non-emergency specialist care and limited choice of providers.
2. Private insurance
Most expats carry private insurance alongside CAJA for faster access and English-speaking providers. Options include:
| Coverage Type | Monthly Cost (per person) | What It Covers |
|---|---|---|
| INS (Costa Rica's national insurer) | $60-$250 | Local private hospital network |
| International private plan (Cigna Global, Aetna International, etc.) | $100-$1,000 | Worldwide coverage including US (at higher premiums) |
| Typical expat couple budget | $350-$800 total | CAJA + private supplement |
For a detailed breakdown, see our guide to healthcare in Costa Rica for expats.
How this compares to Medicare costs:
A 65-year-old couple in the US paying Part B ($370/month combined) plus a Medigap plan ($200-$600/month combined) plus Part D ($60-$160/month combined) is spending $630-$1,130/month on Medicare-related premiums alone, before any out-of-pocket costs.
That same couple in Costa Rica, with CAJA plus private insurance, typically spends $350-$800/month total, and the coverage works where they actually live.
What About Medical Emergencies and Flying Back to the US?
Some families keep Part B specifically for the option of returning to the US for major procedures. This can make sense, especially for complex surgeries or specialized treatments.
But the math changes when you factor in Costa Rica's private hospital system. Facilities like CIMA Hospital and Clinica Biblica are JCI-accredited, with internationally trained surgeons and modern equipment. A knee replacement at CIMA runs $12,000-$15,000, compared to $30,000-$60,000 in the US.
For many procedures, staying in Costa Rica and paying out of pocket or through private insurance costs less than the flight back plus US deductibles and coinsurance, even with Medicare.
How Does This Fit Into the Bigger Financial Picture?
Medicare doesn't exist in isolation. It connects to your Social Security claiming strategy, your tax planning, and your overall retirement comparison between Costa Rica and the US.
The families who handle this transition well are the ones who model it out before they leave. What does dropping Part B save over 10 years? What does the penalty cost if you return after 7 years? What does CAJA plus private insurance actually cost for your specific health situation?
These aren't questions with universal answers. They depend on your health, your age, your likelihood of returning, and your risk tolerance.
The Bottom Line on Medicare and Costa Rica
Keep Part A. It's free.
Part B is the big decision. If you're confident you're staying, dropping it saves real money. If there's a meaningful chance you'll return, the permanent penalty makes keeping it the safer choice.
Part D and Medigap are usually straightforward drops for anyone spending most of their time in Costa Rica.
And whatever you decide, make sure the decision is part of a complete financial plan, not a standalone guess.
If you want to work through the Medicare math for your specific situation, including how it connects to Social Security timing, Costa Rica healthcare costs, and your overall retirement plan, let's talk.