Moving to Portugal at 65 or older means carrying two healthcare decisions at once: setting up coverage in Portugal, and deciding what to do with Medicare back home. Most people sort out the Portuguese side and leave the Medicare question until the last minute — which is exactly when they’re least equipped to think it through clearly.
The monthly Part B premium in 2026 is $202.90, confirmed by CMS — up $17.90 from 2025. If Medicare doesn’t cover care in Portugal, why keep paying That’s the right question. But the answer involves a penalty calculation that catches most people off guard, a hidden trap specific to Medicare Advantage users, and a procedural detail almost nobody mentions: you cannot cancel Part B online or by post alone.
What Medicare Actually Covers Outside the US
Medicare Part A covers inpatient hospital stays, skilled nursing facilities, and hospice. Most people don’t pay a premium for Part A after 10 years of Medicare tax contributions, so there’s no real cost argument for dropping it — keep it.
Medicare Part B is the decision. It covers outpatient care: GP visits, diagnostics, preventive care, and specialists. At $202.90/month in 2026, it costs $2,434.80 per year before any IRMAA income surcharges apply (which kick in above $109,000 MAGI for single filers). And it covers nothing outside the United States — not your private clinic in Lisbon, not the public hospital in Porto, not a specialist in the Algarve.
The SSA’s own publication (EN-05-10137, July 2025 edition) states directly: “It may not be to your advantage to sign up and pay the premium for medical insurance if you will be out of the U.S.” That’s the federal government telling you to think carefully. It’s not telling you to cancel — because the penalty for re-enrolling is real — but it’s a clear acknowledgement that Part B premiums abroad are often money spent on nothing.
The Penalty: The Maths Most People Get Wrong
The Part B late enrollment penalty is 10% of the standard premium for every full 12-month period you went without coverage. It applies permanently and doesn’t age off. The penalty is always calculated against the standard premium ($202.90 in 2026) — even if you personally pay a higher IRMAA-adjusted amount.
Here’s the scenario most people are actually in: you move to Portugal at 65, drop Part B, and return to the US at 75. That’s 10 full years without Part B.
- Penalty: 100% surcharge on the standard premium
- Standard premium 2026: $202.90/month
- Your monthly Part B cost after re-enrolling: ~$405.80/month — for life
- Premiums paid abroad over 10 years if you kept Part B: ~$24,350 (at 2026 rates, which will rise each year)
- Excess penalty cost over a 20-year retirement after returning: roughly $48,700 above the no-penalty rate
The crossover math is uncomfortable: in the scenario above, keeping Part B and paying premiums while abroad would have cost less over a full retirement than cancelling and returning with a permanent double premium. The calculation shifts if you return at 80 rather than 75, or if you’re genuinely certain you’ll never return — but most people who think they’ll never return are not as certain as they believe.
My practical advice is to model both scenarios on paper with real numbers before deciding. The people who regret dropping Part B are almost always the ones who didn’t do this.
The Medicare Advantage Trap Nobody Warns You About
If you’re currently enrolled in Medicare Advantage (Part C) rather than Original Medicare, moving to Portugal creates a specific problem that most guides skip entirely.
Medicare Advantage plans require you to live in the plan’s service area — typically a US county or metro region — for at least six months per year. A permanent move abroad means you no longer qualify. Moving outside the service area triggers a Special Enrollment Period (SEP) allowing you to disenrol from the Advantage plan.
Here’s what makes this a trap: you cannot re-enroll in a Medigap (Medicare Supplement) plan later without going through medical underwriting. Your six-month Medigap open enrollment period — when insurers must accept you at standard rates regardless of health — runs only once, starting the first month you have Part B at 65. Once it closes, it’s gone. If you dropped Original Medicare in favour of Advantage, disenrol from Advantage when moving abroad, and then want Medigap coverage when you return to the US in your 70s, insurers can reject you or charge significantly higher rates based on health conditions you’ve developed in the years in between.
In my opinion, anyone at or approaching 65 who is seriously considering expat life — even 10 years from now — should think hard before choosing Medicare Advantage over Original Medicare plus Medigap. That decision is worth making at 65, not when you’re already packing boxes.
If you’re already in Medicare Advantage and moving soon, disenrol from the MA plan when you leave (you must — you’ll no longer meet service area requirements). Then separately decide what to do about Part B based on your return timeline.
What Healthcare Looks Like in Portugal Instead
If you drop Part B, you need real coverage in Portugal. Most US retirees use a two-layer approach.
SNS (public healthcare) is available to legal residents after registration at your local health centre. You’ll get a utente number, an assigned GP, access to public hospitals, and emergency care at very low or no cost. The SNS registration process and utente number are straightforward once you have residency. The public system is good for primary care and emergencies, but specialist wait times can be long — which is where private insurance fills the gap.
Private health insurance in Portugal costs significantly less than in the US. A comprehensive plan covering specialist access, diagnostics, and hospitalisation often runs €60–120/month for someone in their 60s — less than a single month’s Part B premium. Our public vs private healthcare comparison breaks down what each covers and what most expats actually use.
One practical note: if you’re applying for a D7 visa or any other Portuguese residence visa, you’ll need to show private health insurance as part of the application. SNS access alone isn’t accepted at the visa stage — you need a policy in place before you can register.
For people who travel back to the US several times a year, an international health insurance plan that includes US coverage is worth pricing. These are more expensive than domestic Portuguese plans but may allow you to drop Part B while maintaining some US coverage. Worth comparing against the cost of simply keeping Part B.
How to Cancel Part B: The Interview Requirement
You cannot cancel Part B by submitting a form online or by post alone. The process requires a personal interview — either in person at an SSA office or by phone with an agent — specifically so the representative can confirm you understand the consequences before disenrolment is processed.
The form is CMS-1763 (“Request for Termination of Premium Hospital and/or Medical Insurance”). Once you’re living in Portugal, you handle this through:
Federal Benefits Unit (FBU) — US Embassy Lisbon Email: fbu.lisbon@ssa.gov Phone: +351 217 273 300 (Wednesdays, 1:30 PM – 4:00 PM local time)
The FBU will schedule your interview and walk you through the form. Allow several weeks for the process. Don’t try to handle this through the national SSA 800 number from Portugal — the FBU exists specifically for this.
If your Part B premiums are currently deducted from your Social Security payments (which they are for most recipients), the deduction stops once disenrolment is processed.
What About Part D
If you have a standalone Medicare Part D plan (prescription drugs), you should disenrol when leaving the US permanently — these plans require US residency and cover nothing abroad. Part D has its own late enrollment penalty when re-enrolling, but it’s calculated differently and is generally less severe than the Part B penalty for most retirees.
The Decision in Practical Terms
| Situation | Direction |
|---|---|
| Definite permanent move, certain you won’t return | Consider cancelling; invest premiums in Portuguese private insurance |
| Permanent move, but health-driven return is possible | Do the penalty maths for your specific age and timeline |
| Regular US trips, several months per year | Keep Part B |
| Currently in Medicare Advantage | Disenrol from MA plan (required); decide Part B separately |
| IRMAA surcharge applies to you | Penalty is calculated on $202.90 standard rate — your actual premium math is different |
I would check this before making any final call: request a Benefits Verification Letter from ssa.gov, confirm your current Part B premium including any IRMAA surcharge, and ask the FBU in Lisbon specifically whether your circumstances would trigger a penalty on re-enrolment. Get it confirmed in writing or in a recorded call.
The broader financial picture of living in Portugal — including cost of living by city, healthcare costs, and visa requirements — is worth mapping fully before this decision. The Part B question doesn’t exist in isolation; it’s one line in a much larger retirement budget.