Medicare Savings: Is the Answer in Mexico?

The words Medicare savings are a red flag to some and a carrot to others; depending on where you stand on the issue of health-care reform, the label is code for cuts or a promise to root out fraud and save billions. But far away from the debates in Washington, a group of expatriate baby boomers point to one place they believe real Medicare savings could be realized: Mexico.

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Paul Crist, the owner of a Puerto Vallarta resort who once worked as an aide to former U.S. Senator Paul Sarbanes, says that paying for medical treatment in Mexico could save Medicare almost a quarter of the average cost for most procedures. "My research, as well as the research of others, shows that health care in Mexico costs less than a third of that in the U.S.," Crist says.
(See a guide to what health-care reform really means.)

A doctor's office visit or house call (still a common practice in Mexico) costs only $25 to $40, according to a 2007 study by the University of Texas LBJ School of Public Affairs. The same study presented information on comparative costs for common procedures: a hip replacement costs between $43,000 and $63,000 in the U.S., compared to $12,000 in Mexico, according to Texas-based hospital chain Christus Muguerza, which also operates in Mexico; a coronary bypass in Mexico costs an average of $21,000 compared to $149,000 in the U.S. Citing statistics from the U.S. census and State Department, Crist estimates approximately 200,000 of the 1 million U.S. citizens living south of the border are Medicare-eligible.
(See what health care is like around the world.)

However, Crist says many Medicare-eligible expats living south of the border are forced to fly back to the U.S. for medical treatment because Medicare will not pay for most coverage outside the U.S., even though they have paid into the system during their working lives. Medicare will cover only emergency care if it occurs within 60 days of leaving the country. To utilize their benefits, Medicare-eligible American citizens in Mexico have to opt for periodic flights home or else choose to pay out-of-pocket medical expenses. And because expatriates have diverse geographic origins in the U.S., there are no specific congressional districts they can pressure to legislate change in the Medicare rules on their behalf.

Crist took matters into his own hands. Touting the potential savings to Medicare, he founded Americans for Medicare in Mexico and began campaigning for reform. He travelled to Washington earlier this year to lobby Congress for expansion of Medicare to expats in Mexico. He visited about 85 congressional offices and says many members were open to the idea. Other expat groups like the Association of American Residents Overseas (AARO) joined in a letter-writing campaign. But as the health-care-reform battle grew larger and the bills more complex, Crist says supportive members of Congress told him 2009 was not going to be the year the change could be made.

Resistance to the expansion of Medicare to Mexico is coming from some health-care industry groups like the American Medical Association and the American Hospital Association, according to David C. Warner, who teaches public affairs at the University of Texas LBJ School. Warner says these groups see it as the beginning of a slippery slope that will lead to expansion of Medicare coverage to places like China and Eastern Europe where health-care costs are rock bottom.
(See a video of Ze Frank explaining health-care reform.)

Warner adds that the issue also has been raised at the highest levels by Mexican President Felipe Calderón in a meeting earlier this year with President Barack Obama. But any pressure from Mexican interests could be politically tricky, Crist says: "It would not necessarily be helpful to have Mexican firms pressuring Congress on an issue that will benefit this industry and the Mexican economy generally. This could create a backlash among some [U.S.] political groups."

However, there are several forces set to join the battle that could change the power balance. Not only are more expats finding Mexico's climate and low costs welcoming, but investors are flocking to Mexico as a growth market for health care and senior living. "Many in the baby-boomer generation have seen their retirement savings disappear and it is not likely those funds will be built back up quickly," Crist says, explaining why Mexico, with its low costs, has become attractive. Seeing potential profits, he adds, "the developers and operators of senior housing, which runs the spectrum from independent-living communities through nursing-care facilities, are certainly betting on a substantial influx in the coming years." Developments aimed at attracting seniors have been built near Puerto Vallarta and in the northern Baja peninsula, and independent-living projects are planned for San Miguel de Allende, already a popular expat center north of Mexico City, Warner notes.
(See the top 10 health-care-reform players.)

"Some of the developers in Mexico are affiliated with firms in the U.S., so there will certainly be support in Washington from those firms," Crist says. "Both the senior-housing industry and the health-care industry are internationalizing, and the U.S. players in these industries will be big winners. They have the capital, and the experience to dominate this industry in Mexico and elsewhere, because the senior-housing industry, in particular, is so new in many countries."

Crist plans to hold town-hall meetings in 15 Mexican cities beginning January to pull the expat community together and launch a massive letter-writing campaign. He and other proponents are also hoping to engage another key group in the fight, the so-called returnees — Mexican dual citizens, or Mexican-born citizens with legal status in the U.S. who are Medicare-eligible after a lifetime of payroll contributions. In the U.S., proponents will focus on gaining the support of a key member of Congress to carry the banner. Warner says two from Texas are likely targets: Democratic U.S. Representative Eddie Bernice Johnson and Republican U.S. Representative Pete Sessions, whose districts include concentrated returnee populations, multigenerational families with roots in the state of Guanajuato, Mexico, the cradle of Mexican independence and a favorite spot for expat retirees.

"The opportunity to provide services to Americans at much lower cost outside the U.S. border is enormous," Crist says. "This is pushing even private insurers to explore coverage options outside of the U.S., and Medicare will certainly be a part of this globalization, sooner or later. My preference is for sooner."

By Hilary Hylton

Attention Canadians: The Time is Now and The Place is Mexico!

By: Jim Scherrer



For more than 50 years, the de facto world currency has been the US dollar with many of the world currencies being pegged against it (some countries have even eliminated their own currencies in favor of the US dollar). As an example, Canadians feel a sense of wealth when the Canadian dollar is on par with the US dollar; the opposite when the Canadian dollar devalues to .70 US dollar, i.e., when the Canadian dollar will purchase only 70 cents worth of US goods and services. The following graph shows how the Canadian dollar has strengthened from $.77 US to $.96 US or by 25% during just the past seven months.
Currently, the global economy is changing and as the US dollar continues to erode, many foreign currencies have strengthened significantly relative to the green back. Consequently, savvy Canadians should now be looking at currencies outside of the US and evaluating their own newfound purchasing power in those foreign countries. For instance, the Canadian dollar has virtually exploded in value recently relative to the Mexican peso. The graph below depicts how the Canadian dollar has risen in value from an equivalent of 7.1 Mexican pesos in 2003 to 12.6 pesos today in 2009.



Now, let's compare this increase in the purchasing power of the Canadian dollar to the increase in purchasing power of the US dollar, both relative to the Mexican peso. The graph below clearly shows that during this 6 ½ year time frame the US dollar increased in value by a bit more than 20% relative to the Mexican peso whereas the Canadian dollar increased by a whopping 75%!
It's quite understandable, that toward the end of 2007 when the Canadian dollar reached par with the US dollar, the Canadians were major buyers of real estate in Mexico. However, by March of 2009, the Canadian dollar had slipped to a low of $.77 US and Canadian buyers were virtually eliminated from the Mexican real estate market.



Next, let's closely review the Canadian and US dollars relative to the Mexican peso during the past year. Because the recent strengthening of the Canadian dollar has far outpaced the US dollar relative to the Mexican peso, you'll see that during the past year, the US dollar has barely appreciated in value over the Mexican peso while the Canadian dollar has exploded in value by nearly 25%. (please see graph) The ramifications that this phenomenon has had on the Canadian purchasing power in Mexico are addressed below.


During the past decade many tourist zones and retirement havens in the resort areas of Mexico experienced exponential growth. Along with this growth came significant real estate price appreciation; so much so that real estate prices in many Mexican resort cities were no longer within reach of many Canadian retirees, especially when the Canadian dollar plummeted in value in 2008. Well, we have good news for you fortunate Canadians holding those wonderfully strong Loonies; that's no longer the case!



In Puerto Vallarta, real estate prices of recently built condos have dropped by anywhere from 20-35% during the past year alone. This reduction in value was caused mainly by the global recession, however the swine flu scare and the media hype over the border town drug war (1,200 miles away!) were also contributing factors. With the tremendous glut of unsold new condos recently introduced to the market by developers combined with the many condos that were purchased at pre-construction prices by speculators now just trying to recover their investment, PV is a true buyer's market.



Last year you could buy a $400,000 condo with all the amenities and breathtaking views for 10% off list price or for $360,000. Today, you'll have no problem finding that same condo offered at $300,000. Okay, that seems like a pretty nice savings of nearly 17% but remember, these Mexican condos are all priced in US dollars; Canadians must now evaluate these costs in terms of Canadian dollars! A year ago when the Canadian dollar was worth $.77 US, $360,000 US dollars was equivalent to $468,000 Canadian dollars. Today, with the same condo selling for $300,000 and the Canadian dollar worth $.96 US, it will cost only $315,000 Canadian dollars. That's a savings of $153,000 Canadian or 32.7% (as opposed to the apparent 17%) in just one year!



Until as recently as 4 years ago there were no mortgages available to any North Americans buying resort property in Mexico. At that time, a number of US based mortgage companies introduced mortgages to US citizens buying property in Mexico but not to Canadians. That all changed a couple of years ago when the major mortgage companies finally made the same mortgages available to Canadians. These fixed and variable rate mortgages require at least 20% down and can have terms for as long as 30 years at rates generally about two points above those in the States or at approximately 7% at this time.



It is the opinion of many that the Canadian dollar will continue to strengthen. After all, the Canadian banks didn't make all the foolish sub-prime no-doc loans that were made in the US, the Canadian unemployment rate is somewhat less than in the US, and Canada is rich with natural resources with worldwide demand. Knowing this, it seems only logical that having a mortgage in Mexico based on US dollars would be a very wise investment; it would be paid off with ever strengthening Canadian dollars.



Let's assume we bought that condo for $300,000 US ($315,000 Canadian) and made a down payment of $100,000 US ($105,000 Canadian). A 30 year fixed rate 8% mortgage of $200,000US would result in payments of $1,467/month US ($1,528 Canadian). Of course, if and when the Canadian dollar again reaches par with the US dollar, your payments will be reduced from $1,528 to $1,467 Canadian. Now, let's get a little aggressive and assume the Canadian dollar will reach $1.05US. At that exchange rate, your monthly mortgage payments would drop to $1,397 Canadian. It's not too far a stretch to predict an annual savings of $2,000 Canadian or more based solely on the exchange rate differential. Of course, if the Canadian dollar were to plummet for some unforeseeable reason, these mortgages can be paid off after 2-5 years (depending upon the loan) with no pre-payment penalty.



Finally, let's evaluate the cost of living in Mexico. For starters, let's assume that a year ago we were considering a lifestyle in Vallarta based on a budget of $10,000 pesos per month. With the annual inflation rate in Mexico of 5%, the same goods and services in Mexico will be $10,500 pesos this year. A little more than a year ago, when the Canadian dollar would purchase 9.5 pesos, $10,000 pesos was equivalent to $1,052 Canadian. Today, with the favorable exchange rate of 12.7 pesos per Canadian dollar, the $10,500 peso budget will cost a mere $827 Canadian, i.e., a savings of $225/mo or a 22% reduction in the cost of living in just one year!



In summarizing, it's obvious that the time has never been better for Canadians to explore the opportunities that exist in Mexico today. International monetary circumstances are ideal for Canadians concurrently with the condo supply and demand equation in Mexico heavily tilted in favor of the buyer. In terms of Canadian dollars, you can expect to find incredible condos at 30-35% lower prices than just a year ago and your cost of living will be 20-25% less than it was a year ago.



Of the nearly 50,000 expats living in Vallarta, we estimate that close to 30% of them are Canadians. Needless to say, the winter weather in Puerto Vallarta is more conducive to most outdoor activities (excluding snow boarding and ice hockey!) than anywhere in Canada. So, why hesitate? Come on down this winter and have some fun in the sun with your fellow countrymen and while doing so, save a significant portion of your nest egg on your retirement residence in Paradise. It's now certainly well within your financial reach and as they say, "if you snooze, you lose"; you'll never find a better time or place to invest those Loonies than now in Mexico!
Jim Scherrer has owned property in Puerto Vallarta, Mexico for 26 years and resided there for the past twelve years. The mission of his series of nearly 70 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at PVREBA.

Mexico Beachfront Opportunity

www.campechebeachfront.com

MEXICO: Hopes for Medicare coverage in Mexico

Medicare is a key area within US health reform. Medicare does not pay for treatment overseas. Medicare has very strict guidelines on what hospitals it uses and how it pays them, so any country hoping for a Medicare paid medical tourism boom is going to be disappointed.

Of the 800,000 American citizens living in Mexico, 200,000 are over 60 years old and at or near eligibility for Medicare benefits. Last year, Paul Crist founded Americans for Medicare for Mexico (AMMAC), a non-profit organization dedicated to bringing Medicare coverage to seniors living in Mexico. Crist has lobbied 85 members of the U.S. Congress and prepared a 34-page proposal in which he outlines the pros of extending Medicare to Mexico, “Medicare is now spending $6700 per year per beneficiary in the United States. For the same care in Mexico, my estimate is that it will spend only $3400 dollars, which translates to a very substantial saving.” His argument is that if Medicare is extended to Mexico, the programme would only work with hospitals approved by JCI.This is one reason why there are now 10 JCI hospitals in Mexico, over 20 in the pipeline, and most new ones are built to JCI standards. Crist argues that if Medicare is accepted in Mexico, the 64 percent of American retirees currently flying back to the United States for expensive care would opt for treatment nearer their homes, cutting Medicare overall costs by a minimum of 22 percent.

Although the health sector is regulated and certified by the Mexican General Health Commission, the task of getting JCI certification for private hospitals is of prime importance. One of the main reasons for pushing for certification is that the North American Free Trade Agreement obligates the Mexican medical system to be on a par with the United States and Canada, allowing for the free flow of patients from border to border and for fair trade. The logic is that as long as hospitals are prepared to accept the delays and detail of the Medicare system, it makes sense for Medicare to accept JCI hospitals in Mexico. Crist argues that Mexican hospital standards are similar so Medicare should accept all hospitals. That argument falls on the basis that if the standards are similar, why are Mexican hospitals keen to spend substantial sums of money in getting JCI accreditation?

Whether Mexican heath care meets Medicare’s quality standards and payment system is debatable. The US government is concerned that creating a Mexican medical exemption might be too complicated and costly to implement and would open the door for Americans in other countries.

The approval of Medicare would greatly benefit hospitals such as Christus Muguerza, a Texas chain that now has seven hospitals under construction across Mexico. Even without a Medicare deal, most Americans seeking overseas treatment seem much happier travelling the short distance to Mexico than hopping on a plane to Asia .It is easy to forget that in the US, Hispanics are now the largest racial group.

Medical tourism news22 September 2009

Mexican Corporations- An Option for Holding Mexico Real Estate

Mexican Corporations- An Option for Holding Mexico Real Estate
The Sociedad Anonima de Capital Variable, translated literally is an anonymous society of variable capital. This is equivalent to the U.S. corporation in which there are stockholders. In Mexico it is governed by the Law of Mercantile Societies. More and more, foreigners are forming Mexican mercantile corporations which end with the initials, “S.A. de C.V.”, to do business, to achieve their financial goals and to purchase Real Estate in Mexico. The SA de CV is similar to the “Inc.” of the United States and Canada.

Another version of a corporate entity is the Limited Liability Company which has become more common in recent years. The Mexican counterpart is the SRL de CV, the Limited Responsibility company with variable capital. While there are differences between the S. A. de C. V. and the S.R.L. de C.V., for our purposes here, both are included under the term “corporation” in this article.

As of December1993, the corporation formed in Mexico is considered as “Mexican” even though all shareholders may be foreign persons.

When should a corporation be formed? It will make sense if the shareholders wish to perform services or sell goods for profit, build a hotel, or if they wish to develop a property for resale in lots or condominiums. These are all common options seen in my region, the La Paz real estate market. The corporate entity permits the principals to obtain working papers and to obtain working papers for other foreigners who provide services not easily obtained in the local job market. Care must be taken, however to set up the financial reporting system, to obtain invoices for all pre-operating expenses and to have an accountant who is knowledgeable to make the required declarations in Hacienda, Mexico’s version of Uncle Sam or Revenue Canada.

The minimum capital investment in a Mexican corporation is $50,000.00 Mexican pesos. Evidence of this capital contribution must be in cash or in assets which equal the total amount of the start up capital. It is important to make the declaration of all assets which are to be included from the start up of the corporation. Do not select the minimum amount just because it is the minimum. If you do it may later be difficult to establish the true amount of initial capital invested. Once the initial capital is established, additional investment may be added by making a declaration before a Notary Public, without requesting permission to do so from the government. This is the Variable Capital portion of the equation.

A minimum of two shareholders is required to form a corporation. These shareholders will be required to sign the corporate charter before a Mexican Notary Public. If they come into Mexico as tourists to sign the documents they should obtain an FM-3 or FMN document at their local Mexican Consulate prior to coming so they may perform a business activity (signing the document) in a legal manner. Once the corporation has been formed it is necessary to obtain a federal tax registration number for the corporation and the administrator or board of directors must obtain the FM-3 permit to work in the activities of the corporation.

If the corporation includes or is composed of foreign stockholders it will include a clause in which the foreigners promise to be considered as Mexicans in the eyes of the law and not to invoke the aid of their government in the event of a dispute.

Administration of matters of the corporation may be either through a sole administrator (administrador unico) or through a board of directors. A Comisario must be appointed. This is the person responsible for the accounts and tax payments and should be a Mexican accountant. The comisario does not need to be a shareholder. The duties of the administrators, whether sole administrator or board of directors need to be clearly defined. Will they be able to enter into lawsuits? Obligate the corporation for loans? Hire and fire personnel?

Generally it is wise to provide a list of five names, in order of preference, for the corporation for submission for the permit for incorporation. The first name which has not been used previously by another company will be designated. Upon confirmation of the name, the corporate documents must be prepared and signed before a Notary Public within ninety days or the authorized name will become invalid and the process must be begun again. Together with the name request, permission to incorporate, where foreigners are involved, must be obtained from SECOFI, the Secretary of Industry and Commerce.

Upon completion of the corporate document, it must be recorded in the local registry of Business and Commerce, the National Foreign Investment Registry and the business enrolled in the local Chamber of Commerce or Industry Chamber. Monthly declarations must be filed with tax authorities. Additionally, the corporate account must file an annual statement with the National Foreign Investment Registry regarding the business activity for the previous year. If the corporation is used for property development or is not active, the Mexican accountant will probably charge about $600 Dlls. per year to do the required filings. If the corporation is active the accounting charge may be $300. to $500 Dlls. per month, or more.

Author Linda Neil has over 35 years of hands on experience in all aspects of Mexican real estate. She holds membership in AMPI, NAR, and FIABCI and PROFECO Certificate 00063/96. Current member of the national advisory board of AMPI she is the owner broker of LINDA NEIL PROPERTIES for more information (512)-879-6546

Mexico Investment: The New Vogue

What with flu bugs and sensationalized press headlines about the drug war along the U.S. border, Mexico was in danger of slipping out of investment fashion.

But as we move out of the summer season and start looking at what’s new for this fall, it’s clear that Mexico investment is becoming the new vogue.

The beginning of August saw the press full of reports about big international companies making equally big investments in Mexico and others strengthening their business commitments.

Banks and financial service providers, such as Fitch and Morgan Stanley, have also given their thumbs up for a wide range of Mexico investment opportunities.

For the savvy emerging market investor, none of this should be such a surprise.

The global economy is showing signs of improvement, so this is exactly when you’d expect to see foreign cash starting to look for investment opportunities with higher returns.

So when wise market players, JP Morgan, decided to rate Mexico as their top pick for Latin American equities last month, eyes started to train themselves south of the border, seeking out the autumn season’s stylish new offering in Mexico investment.

Others that like what they see on the Mexico investment catwalk include Coca-Cola — who announced a $5 billion investment in Mexico over the next 5 years — and Spanish banking giant, Santander, who has invested $190 million in a new customer contact and service center in Queretaro, Mexico.

Other fashion-junkies joining the trend include General Motors — completing a Mexico investment of more than $1 million in a new customer service center — and British bank, HSBC — raising its recommendation for Mexican shares to “increase portfolio”.

The modish trend looks set to continue and expect more big names to jump into Mexico investment opportunities as the fall season moves into winter. Whether investing in Mexico businesses or real estate , this may be one hip new emerging market show that you don’t want to miss.

Article by Investment Properties Mexico, experts in Mexico investment.
http://www.investmentpropertiesmexico.com/

BoomersAbroad.com Launches New online Mortgage Center for Mexico

BoomersAbroad.com, Online Community & Social Network was born in direct response to hundreds of conversations with retiring baby boomers who were seeking out a new life, exciting destinations, a better weather and a dream home. At Boomer Abroad Online Community we strive to fill the information gap and educate and update Baby Boomers on the news, trends and opportunities in Latin America. Our new Mortgage Center enables potential home buyers to search for loans, compare lenders, find the right mortgage product and interest rate, and begin the application process with a few clicks of the mouse.

Puerto Vallarta, Jalisco, Mexico – July 30, 2009.
Searching for Mexico mortgages in the past has been a frustrating process with continually changing guidelines by lenders and trying to find the right type of mortgage product. Also, finding an experienced mortgage broker to ensure a smooth closing and loan funding process has been a challenge due to the ever changing landscape!

BoomersAbroad.com Online Community had introduced a solution with its Mortgage Center, from MexicoMortgageFinder.com, which provides BoomersAbroad.com Online Community members, users and visitors with real time mortgage rates and monthly payment information.

The BoomersAbroad.com Mortgage Finder empowers those who are looking for mortgage products in Mexico, to immediately search a database of all available mortgages offered in the marketplace…property and credit profile specific. Once the perfect loan (purchase, cash out, construction) is found, immediate contact with the lender is made to begin the approval process. Or, if the consumer is still “house hunting”, they may save the loan details to his/her profile (on one or multiple properties)and return to the oomersAbroad.com web site to retrieve the saved loan details at a later date as the home buying process nears closing.

“We are truly excited to partner with BoomersAbroad.com as we feel they offer an incredible site which empowers ex-pats to be better informed when considering…and actually…moving abroad. Our technology enables BoomersAbroad.com Online Community members, users and visititors to see real time mortgage product and rate information and eliminate the confusion associated with finding the right mortgage option in Mexico,” says Jeff Davis, Director General of the Mexico Mortgage Marketplace.

“We have always been on the cutting edge of technology and the MexicoMortgageFinder.com program is a great addition to our website. Clients want to be able to get information immediately at any hour of the day in the comfort of their own home – that is possible with this technology. The added benefit is that MexicoMortgageFinder.com also works togther with loan brokers, so clients can still have a loan broker working for them as well if they wish. Loans are readily available in Mexico and this technology provides the opportunity for so many more buyers to purchase their dream home in Mexico”, says Luis Miranda, President of BoomersAbroad.com Online Community.

Membership for home buyers, realtors and developers in the BoomersAbroad,com Mortgage Marketplace is fast, free and easy. And it provides access to the entire database of Mexico Mortgage options. For more information on the BoomersAbroad.com Mortgage Marketplace, to search for the perfect loan for your dream home purchase, visit http://www.boomersabroad.com/

For more information about the BoomersAbroad.com Online Community and BoomersAbroad.com Mortgage Marketplace, please contact Luis Miranda at lmiranda@boomersabroad.com

About BoomersAbroad.com

BoomersAbroad.com is an Online Community & Social Network and was born in direct response to hundreds of conversations with retiring baby boomers who were seeking out a new life, exciting destinations, a better weather and a dream home. At Boomer Abroad Online Community we strive to fill the information gap and educate and update Baby Boomers on the news, trends and opportunities in Latin America”.

Using the online community model, our goal is to provide the necessary information, education, guidance, resources, tools and alternatives to start boomers down the path of discovering and understanding all that living, retiring and investing abroad has to offer. Everybody learns from everybody. We understand the proven power of collaboration. It is collective wisdom.

About the México Mortgage Marketplace.

Mexico Mortgage Marketplace, is a privately held Limited Liability Corporation located on Mexico’s Pacific coast city of Puerto Vallarta. The Company develops web-based technology which is used to automate processes for the banking, mortgage and real estate industries. In addition to technology development for its partners, the Company also owns and operates several web sites which are designed to streamline mortgage and real estate processes throughout Latin America and the Caribbean.