United States-Mexico cross-border health insurance initiatives: Salud Migrante and Medicare in Mexico

Abstract

While U.S. health care reform will most likely reduce the overall number of uninsured Mexican-Americans, it does not address challenges related to health care coverage for undocumented Mexican immigrants, who will remain uninsured under the measures of the reform; documented low-income Mexican immigrants who have not met the five-year waiting period required for Medicaid benefits; or the growing number of retired U.S. citizens living in Mexico, who lack easy access to Medicare-supported services. This article reviews two promising binational initiatives that could help address these challenges—Salud Migrante and Medicare in Mexico; discusses their prospective applications within the context of U.S. health care reform; and identifies potential challenges to their implementation (legal, political, and regulatory), as well as the possible benefits, including coverage of uninsured Mexican immigrants, and their integration into the U.S. health care system (through Salud Migrante), and access to lower-cost Medicare-supported health care for U.S. retirees in Mexico (Medicare in Mexico).

About 30 million Mexican-Americans live in the United States. Of those, 12 million are foreign-born (1). Mexican immigrants currently represent the majority of undocumented immigrants in the United States (57%) (2). The recently approved Patient Protection and Affordable Care Act (PPACA) will potentially reduce the number of uninsured Mexican-Americans (3). Under this legislation, documented immigrants and U.S.-born children of immigrants (including those born to undocumented immigrants) will 1) be required to obtain health insurance, 2) be eligible to purchase insurance through health insurance exchanges, and 3) benefit from increased Medicaid eligibility upon completing a five-year waiting period (4). Undocumented immigrants will be excluded from the health insurance mandate and will be ineligible to participate in either the health care exchanges or Medicaid (5, 6). While the outcomes of U.S. health care reform are still uncertain, cross-border health insurance could play a supportive role in covering the cost of health care for undocumented Mexican immigrants and facilitating the integration of low-income, documented Mexican immigrants into the U.S. health care system. Salud Migrante is one health insurance initiative that could help accommodate these two populations.⁵

Another migrant flow between the United States and Mexico that is just beginning to receive more attention consists of retired U.S. citizens moving south of the border (7). Even before the financial crises trimmed the retirement funds of millions of U.S. retirees, a considerable share of baby boomers were expected to retire in Mexico due to its low cost of living, geographic proximity to the United States, and relatively pleasant weather (7–10). Some will live in Mexico full time, while others are expected to be part-time residents, most likely during the winter months (11).⁶ When in Mexico, U.S. retirees face the complexities of using health care abroad. Medicare in Mexico is a health insurance initiative that could be beneficial for this population.

This article provides an overview of Salud Migrante and Medicare in Mexico, two cross-border health insurance initiatives that target uninsured Mexican immigrants and retired U.S. citizens living in Mexico, respectively; identifies potential challenges to their implementation—including legal, political, and regulatory considerations—and the complementary roles they could play in increasing access to care for both of these cross-border populations as reform of the U.S. health system unfolds; and describes their possible benefits, including increased coverage of both undocumented and documented Mexican immigrants, and the integration of the latter group into the U.S. health care system (in the case of Salud Migrante), and easier access to and reduced costs for health care services for U.S. retirees living in Mexico (through Medicare in Mexico).

CROSS-BORDER HEALTH CARE PRACTICES

Utilization of services

For uninsured Mexican immigrants living in the United States and U.S. retirees living in Mexico, Mexico’s lower health costs provide an affordable alternative to the U.S. health care system. A recent study found that about 1 million adults from California use medical, dental, or prescription services in Mexico, and about half of them are Mexican immigrants living in the United States (13). These findings are consistent with previous research (14). The main predictors of utilization of health services in Mexico are health need, lack of health insurance coverage, employment status, delay seeking care, relatively recent immigration, limited English proficiency, and prescription drug use (15–18). Cultural factors such as language and provider attitudes also influence utilization of health care services south of the border (19).

According to previous research, people may seek care outside their country of residence if a particular health care provider location is easily accessible and there is a substantial flow of foreign or expatriate patients to that location (20, 21). Other studies show that geographic proximity to the border increases the likelihood of cross-border utilization of health services (22–24). Additional incentives to travel abroad for health care are lower costs and better access to services compared to the patients’ area of residence (e.g., many border areas have an inadequate supply of health care professionals). The cost savings and increased access to care that could result from more utilization of Mexican health services by U.S.-Mexico migrant flows, along with Mexico’s low insurance coverage rates, raise questions about how cross-border health insurance initiatives could be leveraged to take advantage of these opportunities.

BINATIONAL INSURANCE INITIATIVES SALUD MIGRANTE AND MEDICARE IN MEXICO

Legal framework

In the 1990s, several local and state organizations in the United States and Mexico began to explore different options for binational health insurance (25). Because health care costs in Mexico are considerably lower than those in the United States, cross-border coverage can provide more affordable insurance products utilizing, at least in part, coverage in Mexico. California is currently the only U.S. state that allows private health insurance companies to sell policies with comprehensive coverage provided in Mexico (25). This was accomplished through Senate Bill No. 1658 (Peace), a 1998 amendment of the Knox-Keene Health Care Service Plan Act of 1975 (“Knox-Keene Act”). The amendment allowed employers in California to purchase insurance coverage in Mexico for employees who either live in Mexico or simply prefer to use health services in that country.

To date, three private U.S. insurance companies and one insurance group from Mexico are licensed to offer this type of coverage (25). All Mexican health services available through these plans are provided by private hospitals in the border cities of Baja California, Mexico. In their provision of these services, the providers must comply with Mexican regulations as well as regulatory standards established by California authorities. Mexican immigrants can also purchase government-run health insurance for their dependents living in Mexico, through either the Mexican Social Security Institute (Instituto Mexicano del Seguro Social, IMSS) or Seguro Popular, a government-run health insurance program. These plans are available for purchase at Mexican consulates in the United States (25, 26).

Overview

Salud Migrante

The Salud Migrante initiative is an evidence-based health insurance initiative developed by the Mexican Institute of Public Health (El Instituto Nacional de Salud Pública, INSP) and proposed in 2008 as a model for expanding binational health care coverage among uninsured Mexican immigrants residing in the United States. Since this initial proposal, the initiative has evolved through additional research and pilot work by the Mexican government, including the development of various platforms by the Ministry of Health (Secretaría de Salud, SSA) for in-depth analyses of binational health care plans designed to reach the uninsured target group (26).

In conjunction with community clinics in the U.S. states of Washington and North Carolina, the SSA is now conducting its first pilot project for the Salud Migrante initiative in the form of a binational health care plan that provides Mexican guest workers with ambulatory and emergency service coverage in the United States (through the community clinics) and comprehensive health care coverage in Mexico (through the government-run health care program Seguro Popular) (Table 1). The project provides insurance for 3 000 workers in each of the two states, with the U.S. emergency coverage financed by the Mexican government at a rate of US$30 per worker per month (27), and Mexican secondary and tertiary coverage provided through enrollment in Seguro Popular. Project coverage is currently limited to U.S.-based seasonal agricultural workers from Mexico with temporary (H2A) visas but is anticipated to eventually be available to other uninsured Mexican immigrants (27).

TABLE 1.

Potential legal, political, and regulatory challenges and possible benefits of implementing two U.S.-Mexico cross-border health insurance initiatives: Salud Migrante and Medicare in Mexico

Insurance initiative	Objective	Target population	Potential challenges		Possible benefits
			Legal/regulatory	Political
Salud Migrante	Provide ambulatory and emergency coverage in the United States plus comprehensive coverage in Mexico through the government-run health care program Seguro Popular	Uninsured Mexican immigrants in the United States	Compliance with diverse regulatory standards for insurance providers across different U.S. states Development and oversight of cross-border patient safety regulations (e.g., physician licensing and malpractice liability) and medico-legal standards (e.g., auditing, quality assurance, reporting, confidentiality, data quality, etc.) Development of common legal framework for solving liability issues	None expected among U.S. hospital administrators or local governments (especially in states with large uninsured population) as coverage for uninsured immigrants would reduce the financial burden on U.S. safety net health facilities Possible opposition from U.S. physicians related to regulatory and liability issues	Insurance coverage for low-income documented Mexican immigrants who have not met the five-year waiting period required for Medicaid eligibility Insurance coverage for undocumented Mexican immigrants, who are excluded from any U.S. health care coverage under the Patient Protection and Affordable Care Act (PPACA)
Medicare in Mexico	Expand Medicare payments to Mexican providers that qualify for Medicare certification	Retired U.S. citizens living in Mexico full- or part-time	Approval (recommendation) from IPABa based on evidence of cost savings (without any reduction in quality of care) Medicare certification of Mexican health providers (based on compliance with U.S. safety, licensing, and malpractice regulations, and certification from the Joint Commission International Center for Patient Safety) Development of common legal framework for solving liability issues	Opposition from various U.S. health care interest groups (physicians, hospitals, pharmaceutical companies, etc.) to prevent a reduction in their revenue from the Medicare program	Access to good-quality health care services in Mexico for U.S. retirees Potential reduction in the costs of supplying Medicare benefits to this population

^aIPAB: Independent Payment Advisory Board (entity created under sections 3403 and 10320 of the PPACA to control Medicare cost escalation).

Medicare in Mexico

The Medicare in Mexico initiative was developed to address the need for health care coverage for U.S. retirees emigrating to Mexico, a growing trend that is expected to increase at an even faster rate as baby boomers retire. Currently, 64% of retired U.S. citizens living in Mexico return to the United States for medical treatment. The remaining 36% who are treated in Mexico assume all of the costs for those health care services (9, 10, 28). To address this problem, U.S. retirees have started to organize and lobby the U.S. Congress to expand Medicare benefits to cover medical services received in Mexico (Table 1) (9, 28).

The idea of expanding Medicare coverage to eligible beneficiaries living in Mexico started as an initiative of the University of Texas in Austin (8). Under this proposal, Mexican providers that qualified for Medicare certification would receive Medicare payments for services provided to program beneficiaries. A conservative assessment suggests that the expected increase in utilization of Mexican health services by Medicare enrollees due to the expanded reimbursement system would generate overall savings of about 20% for the Medicare program (8).

Both initiatives could play complementary roles in increasing access to care for the above-mentioned cross-border populations within the context of U.S. health care reform.

Complementarity with PPACA

The recently enacted set of health care reform measures known collectively as the Patient Protection and Affordable Care Act (PPACA) will provide subsidies for the purchase of health insurance through exchanges and increase eligibility for Medicaid⁷ among documented immigrants who meet a five-year waiting period (6). Undocumented immigrants will be excluded from both Medicaid and the subsidized insurance exchanges. The PPACA provisions will also affect Medicare. Under sections 10320 and 3403, overall Medicare spending growth targets are defined and will be enforced by the Independent Payment Advisory Board (IPAB), an entity created to control Medicare cost escalation by developing proposals to cut spending if the target rate of growth is exceeded (4).

Salud Migrante may be a viable alternative for undocumented Mexican immigrants as well as documented low-income Mexican immigrants ineligible for U.S. health insurance under the above-mentioned provisions of the PPACA. The initiative could thus help to reduce the number of uninsured Mexicans living in the United States and facilitate the integration of documented immigrants into the U.S. health insurance system. Medicare in Mexico could help cover U.S. retirees with full- or part-time residence in Mexico, easing their access to and use of Mexican health care services and thus help cut Medicare program costs. Because health care costs in Mexico are significantly (50%–90%) lower than those in the United States, considerable savings could be generated if the U.S. Center for Medicare and Medicaid Services (CMS) provided reimbursement for low-cost health services provided in Mexico. Savings would also be accrued by Medicare enrollees receiving care in Mexico due to lower out-of-pocket expenses.

Legal, political, and regulatory challenges

Despite these potential benefits, significant challenges to the implementation of these initiatives are likely to arise with regard to political, legal, and regulatory issues. For example, because cross-border utilization of health services brings more competition to national and regional health care markets (29), Medicare in Mexico could generate opposition among various U.S. health care interest groups, such as those representing physicians, hospitals, and pharmaceutical companies. These groups are likely to lobby against the expansion of Medicare to Mexico to prevent a reduction in their revenue from the Medicare program. Opposition to Salud Migrante, which targets low-income populations that are often uninsured, may not be as aggressive. The high cost of treating uninsured individuals with complex and expensive health care conditions is a serious financial burden for safety net hospitals in the United States (30), so the provision of less expensive treatment in Mexico is likely to be supported by hospital administrators and local authorities, especially those from states with relatively large uninsured populations. U.S. physicians, on the other hand, may oppose the initiative. Past experience suggests that physicians are unlikely to support any type of cross-border insurance. In 2001, a bill co-sponsored by Texas legislators Pat Haggerty and Edward Lucio to establish binational health insurance at the Texas–Mexico border for Mexican workers and their families was not approved by the local legislature (31, 32). The Texas Medical Association strongly objected to this proposal given regulatory and liability issues (33).

One of the biggest challenges in implementing Medicare in Mexico is the need for the establishment of a Mexican health care provider network that meets Medicare requirements. To date, several private Mexican health care facilities have initiated the process of becoming Medicare-certified (9), which requires compliance with U.S. regulations regarding safety standards, licensure, and malpractice insurance, as well as Medicare certification from the Joint Commission International Center for Patient Safety (JCICPS). This has raised concerns at the CMS about the possibility of requests for establishing similar provider networks in other countries, such as Canada, which could prove complex as well as costly to administer. To address these concerns, CMS has commissioned a study to clarify the various policy options (10).

Patient safety

It is not clear if or how the U.S. legal system would handle medical malpractice cases and other issues related to patient safety south of the border. The European experience could prove useful in addressing this question (19, 34). Various directives uphold European health professionals’ right to practice across different countries throughout the European Economic Area (EEA), and a medico-legal framework, to ensure that standards for auditing, quality assurance, timeliness of reporting, confidentiality, and quality of data are factored into all health care contractual agreements (34–36).

At present, in the United States, physicians’ licenses restrict their right to provide medical care to the boundaries of their respective states, and different states have different definitions of medical malpractice, with some defined more broadly than others (37, 38). One possible model for development and oversight of cross-border patient safety regulations is NAFTA (39), which resolved differences in trade law across U.S. states as well as Canada and Mexico by agreeing to settle trade disputes using the legal framework of the World Trade Organization.

Regulatory standards

While health insurance regulations in Mexico are primarily a responsibility of the federal government, in the United States they are shared between the federal government and the states (40). For example, while the federal Employee Retirement Income Security Act of 1974 (ERISA) regulates employer-based health insurance, state regulations (which vary from state to state) provide consumer protections for enrollees of both individual and employer-sponsored health insurance policies. The resulting diversity of health insurance regulations presents various challenges with regard to widespread implementation of the initiatives, particularly Salud Migrante.

For example, for the Salud Migrante pilot project described above, the Mexican government makes fixed (per enrollee) payments (classified as “donations”) to the U.S. community clinics to cover ambulatory and emergency services for the Mexican guest workers. This practice may be acceptable in some U.S. states but could be problematic in other states with stricter definitions and regulation of the health insurance industry, where prepayment for a specific package of U.S. health care services for a particular population could be considered an insurance product, which can only be provided by a qualified insurance entity (approved by local insurance regulators). In these states, broader implementation of the Salud Migrante initiative may require a different legal definition of the fixed payments from the Mexican government.

For the Medicare in Mexico initiative, regulatory standards could affect the level of spending. As mentioned above, overall Medicare program expenditure caps are defined by section 10320 of the PPACA and overseen by IPAB. Under the current PPACA provisions, the U.S. Secretary of Health and Human Services (HHS) is required to implement the proposals made by IPAB. IPAB could recommend making Medicare coverage available in Mexico for U.S. citizens who have retired there if there is evidence that it could generate savings to the program without sacrificing the quality of care for its members. Pilot testing this initiative could help policy-makers estimate the costs and benefits of cross-border health plans more accurately (41).

Potential benefits

Salud Migrante could help cover health care costs for low-income populations that are often uninsured and thus represent a potential financial burden for U.S. safety net hospitals. Medicare in Mexico may increase Medicare sustainability and reduce the complexity of using health care services abroad. The main incentives for implementing these initiatives are thus the potential cost savings and the possibility of improving health insurance coverage for important segments of underserved binational populations. Increased access to care for these cross-border populations could translate into better health outcomes for both groups.

Recommendations

As described above, the Mexican government is already testing pilot projects that offer binational health coverage to cross-border populations in the United States. Additional, similar pilot work for Medicare in Mexico is recommended. Pilot projects in areas of Mexico where elderly U.S. citizens live would be appropriate. CMS could grant selected providers a temporary Medicare license to provide services. The number of providers and nature and scope of benefits could be limited at first. Gradual implementation would allow for political and practical feasibility testing of the initiatives to determine their potential to produce significant change in health care coverage and is therefore most likely the best approach.

CONCLUSION

Salud Migrante and Medicare in Mexico are promising binational initiatives that could be useful in overcoming some of the limitations of U.S. health care reform with respect to uninsured Mexican immigrants, and facilitating access to health care for U.S. retirees living in Mexico. In addition, both initiatives could provide significant cost-cutting benefits by increasing health insurance coverage and lowering health care costs, and are therefore attractive for both countries.

However, significant political, legal, and regulatory challenges to the implementation of these initiatives are likely. Collaboration among health authorities in both countries is needed to find areas of agreement that could help surmount these challenges and allow for improved health insurance coverage for cross-border populations. Both insurance initiatives could also be studied as potential models for other countries in the region that are considering various mechanisms for collaborative provision of minimum health care coverage to migratory populations.