[gregjor]

Medical insurance and health care abroad for expats costs a lot less in most places, compared the to US. As a US citizen you can’t get out of paying taxes for Social Security and Medicare, just cost of citizenship the way I look at it. Not something I get too wound up over. Even if I can’t benefit from Medicare I am paying in for my parents and other people who can benefit from it, while I pay $50 for a doctor’s visit in Thailand.

You can collect Social Security while living abroad.

[toastal]

If the goal is to get more people health care, then letting them deduct visits for cheaper care in the country they reside in would be a good thing. It more strain on the US healthcare system and the planet to have expats traveling back for a procedure and the deduction would be less because the healthcare cost is less.

And remember the reaction to the House press secretary Jen Psaki saying the US would provide vaccines to all Americans and then immediately walking that back when a reporter ask about those abroad with, "we have not historically provided private healthcare for Americans living overseas, so that remains our policy"? I'd say this was joke if it wasn't about the health of US citizens not getting care while paying their whole lives for it (this isn't Medicare, but still the reaction and aversion to health services aboard).

[gregjor]

Yes, we can imagine all kinds of ways the US health care system could work better. I was just mentioning that US citizens have to pay for Medicare regardless of where they live, and it’s not excluded with FEIE. And Medicare doesn’t work overseas. That’s the reality we have to live with. What could or should happen in our opinions is a different question, not really relevant to this topic.

Personally, my goal was traveling and living nomadically out of the US. I did that for over six years. Medical care was cheap almost every place I went, and I’m older than the typical 20- and 30-something nomads. My goal was not debating or trying to reform Medicare or the US health care system. Those are noble goals I suppose but not something I want to spend my time on.

[toastal]

> Those are noble goals I suppose but not something I want to spend my time on.

This is really why I should donate to the "abroad" political arms. Both Republican AND Democrats agree on fixing Medicare, FBAR, etc. because citizens abroad are always an afterthought. I wouldn't mind being an afterthought if it wasn't sapping the biggest part of my paycheck while being utterly useless to me later in life or sucking out all of my time come tax season.

[gregjor]

It doesn’t make sense to me to voluntarily donate money to politicians when you are complaining about taxes. You can write your members of Congress for free.

For a self-employed person Social Security is 12% on the first $147K of self-employment income, maxing out at $18,228/year. Medicare is 2.9% on the first $200K and 3.9% on income over $200K. So for a person making $200K+ the total of those is 12% + 3.9% = 15.9%.

For a person with a regular employer (you mentioned “paycheck” in your comment) the employer pays half of those taxes, so the employee portion is a little less than 8%.

That’s a significant chunk of income paid for Social Security and Medicare but I wouldn’t call it “the biggest part.”

Americans living abroad can collect Social Security, so that part is not necessarily utterly useless. Currently Medicare benefits only pay for treatment in the US, but in that case the percentage of income paying into that is no more than 2.35%.

If you have parents or relatives on Medicare you are actually funding them, think of it that way. Because of demographic changes America has a growing aged population and a shrinking population of young people. If you want to address that problem have more children.

If preparing and filing tazes is sucking out all your time come tax season maybe get a professional tax preparer to do it for you. I have been self-employed for over a decade, earning well over $150K/year, lived overseas more than half that time, and I never spent more than a couple of hours a year preparing and filing my taxes. Some people have more complex tax situations than others but most returns are not that complex if you keep your records and receipts organized.

[gregjor]

Estimates of Americans living overseas vary from 5 million to 9 million. A lot of those are retirees (presumably past the age of contributing to Social Security and Medicare), and government employees and military posted overseas. The number also includes students (generally not earning a taxable income), "accidental" Americans who got citizenship by birth (like Boris Johnson). Actual expats and nomads are probably a fairly small number.

It would be nice if US tax laws and Medicare and so on accommodated expats and nomads. That would likely benefit me. But I chose to live an unusual and minority lifestyle as a nomad, so I have to take the good with the bad. It's not worth my time, effort, or money to get involved with political lobbying on a niche issue that doesn't interest or concern the vast number of US citizens or the people in Congress who might make changes. The government will always have bigger and more pressing issues than unfair taxation of expats, and we will always be a tiny minority of constituents.

More than once I have encountered Americans who interpret my choice to live abroad as somehow "abandoning" my country, or running away from it. And most Americans don't know about taxes on expats/nomads, they assume that if I live in, say, Thailand I am not paying US income taxes. When I explain that Americans are taxed based on citizenship they are surprised -- why would an American who lives and works in the US know about that? Likewise Americans are usually not aware that getting a tourist visa to visit the US (for a foreigner) is often difficult and time-consuming -- they have never had to deal with USCIS. So that presents a political challenge: the expat/nomad lifestyle is not something the majority of Americans (or their elected representatives) understand or care much about.

Good luck with the uphill battle. There is an advocacy/lobbying organization for Americans living abroad:

https://www.americansabroad.org

Of course they ask for money. I choose not to get too involved with trying to reform the government or tax policies. It's a fact of life I can deal with, I have better things to give my attention to.

[toastal]

Normally I share your sentiments because it's not really worth the fight and I can understand the situation and why generally "no one cares", but in a comment section, I'm more inclined to put how I really feel. I've been out of the country for a while so I know the numbers, but it still really sucks. It sucked when I got lower priority for COVID vaccines because the embassy didn't want to comment, and it sucked seeing (understandably) the local government shrug preferring their own citizens. It sucked when I forgot my FBAR because it didn't cross my mind as being unreasonable to have additional funds where I live. It sucked reading and hearing stories of expats learning too late that they were not going to get health care. It sucks when I can't open banking or crypto accounts because of the passport I hold and the government agencies related to it.

It's compounded though because of the other side: host country. They don't have a modern definition of "work" and so the rules put you in a gray zone so you can't or it would be prohibitively expensive to start a business and hire workers to meet the business requirements for visas (and sole-proprietorships not being allowed to foreign residence)--all for a self-employed remote work which only requires internet, a computer, and caffeine. If I could pay local taxes, then I could support the local community and subtract it from the US side. And I'd rather pay taxes to the local community. Applying for local citizenship is daunting and requires a long residency period and being on a wait list. Some countries like Estonia make it a lot easier.

It is a non-standard and often glamorized lifestyle, but it is filled with so many caveats.

[gregjor]

Having lived abroad as a US citizen I understand and don’t disagree with your frustrations. The nomad or expat or retiree overseas life comes with some trade-offs and frustrations. Living abroad and constant traveling do get glamorized. Digital nomad forums are full of stories of immigration hassles, money problems, loneliness, alienation, culture shock. Sometimes the nomad makes obvious mistakes that complicate their life. Sometimes government bureaucracies and banks and employers add friction and hassle.

On the other hand, finding the information you need to travel and live abroad is fairly easy these days. A little planning and setting your expectations smooths the process out. It’s not for everyone, and definitely gets presented as more glamorous and exciting than it sometimes turns out. A person who is unhappy, lonely, insecure, financially unstable, or operating from unrealistic assumptions will just take those problems with them — living abroad isn’t a clean slate.

Some things in life you can change. Some things you can’t. It’s not always worth getting mad or fighting against screwed up rules or banging your head against obstacles. Every person has to make their own decisions about what they can live with.