We have used a very good broker for the past 20 years who has helped clients get full US medical coverage in even the most difficult of situations. Through working with us to solve cross-border health insurance issues, he has become as close to an expert as you will be able to find in this unique area. His name is Bill Norgaard, of Norgaard Insurance Services, and you can reach him toll-free from Canada and the US at 1-877-679-7900, or email firstname.lastname@example.org.
Those heading to the United States for employment will generally have excellent medical coverage available from most large employers' group plans.
If you are under 65 and have a pre-existing condition, expect to pay higher premiums and/or have some conditions excluded from coverage, or be denied coverage altogether. When choosing a health insurance carrier in the United States, stick to an AM best-rated company with an A2 to A1 rating that has been providing health insurance for at least ten years. Read over any policy and the company's sales literature very carefully.
There is much debate in the United States as to whether the current medical system should be changed to make it more accessible to more people. The major concern is how the new system will work, what it will cost, and who will pay for it. Revamping the American medical system would have the likely outcome of giving Canadians who become residents of the United States better access to the US medical system.
Some recent US legislation now improves the chances that someone under 65 with a pre-existing condition has of obtaining new health insurance or maintaining existing coverage until he or she can get on Medicare at 65. In addition, there are several US states that will make special provision for persons with pre-existing conditions. For example, I had a client, aged 60, with a serious pre-existing condition who normally would have been refused health coverage by any health insurance company in the United States. In fact, he had been told by his cardiologists in Canada that they could do nothing for him and that he was doomed to live with a serious heart condition. The client took up residence in California, where state laws allowed him to obtain adequate medical coverage at a reasonable cost in spite of his medical condition, which made him eligible for US medicare and allowed him to get treatment even before he reached 65.
HAVE YOUR CAKE AND EAT IT TOO!
By extending its out-of-province travel coverage to seven months or 212 days, the Ontario Health Insurance Plan (OHIP) has provided a great opportunity for those who can take advantage of it. For the first time it is now practical for those who can get legal immigration status in the United States to leave Canada for tax purposes yet maintain OHIP without breaking any rules. OHIP eligibility rules on their website state that "Coverage is based on citizenship and Ontario residency and is not determined by whether you have a job or are unemployed, or whether or where you pay your income tax." In order for this to work, a retired person would need to exit Canada for tax purposes and return to his or her Ontario residence or cottage for five months each year. For most Ontario snowbirds, this would be a perfect set-up: seven months in the Sunbelt in the winter and five months in Ontario in the summer.
The CRA, in the February 1998 federal budget, unknowingly put a very necessary tax rule in place that makes this setup possible. The new rule brought in was intended to prevent Canadians exiting Canada to avoid the Bronfman rules (the deemed disposition of assets upon exit from Canada). The 1998 budget rule states that if a taxpayer is a resident of the United States or another treaty country under the applicable treaty residency rules, he or she is automatically a non-resident of Canada for tax purposes. Under CRA rules before February 1998, having OHIP coverage regardless of other factors, including the Canada/US Tax Treaty tiebreaker rules (see Chapter 3 for the treaty tiebreaker rules), would be an indication of Canadian residence and you would have been taxed on your world income in Canada at full Canadian rates (if you exited Canada with that OHIP coverage still in place). Those with residences in Manitoba, now that Manitoba has added an additional 30 days to their six-month out-of-province medical coverage limits, could now likely take advantage of the same situation that those from Ontario are able to.