Social Security, Medicare and Health Cover

Three questions come up in the same breath when a household plans a move back: will the US Social Security record turn into a pension we can collect in India, what happens to Medicare, and how will we pay for health care at home. The answers differ by citizenship, so this chapter keeps the difference between an Indian citizen who worked in the US on a visa or a green card and a US citizen in view throughout. The visa shelf's chapter "Social Security When You Leave" covers the US rules in full; this one adds the Indian side and the health cover.

The US Social Security record

A retirement benefit needs 40 work credits. In 2026 one credit takes $1,890 of covered earnings, up to four credits a year, so about ten years of full-time US work earns the 40. The benefit is built from your highest 35 years of indexed earnings, and years with no US earnings count as zero, so a partial US career gives a smaller benefit than a full one at the same pay. The record stays on file when you leave. Download your earnings statement from your Social Security online account before you go and correct any missing year while the pay stubs are easy to find.

The United States has Social Security (totalization) agreements with 31 countries, and India is not on SSA's list. With no agreement, years worked in India cannot be added to US credits and the 40 credits have to come from US work alone.

Being paid in India

Qualifying and being paid abroad are separate tests. SSA's payments-abroad rules turn on the citizenship of the person receiving the benefit. SSA's Country List 4 includes India: a citizen of a country on that list keeps being paid after six full calendar months outside the US if the worker earned at least 40 credits or lived in the US for at least 10 years. Dependents and survivors have further conditions. SSA's Country List 6 names India among the places where direct deposit is available. A US citizen is covered by a separate set of rules; confirm yours with SSA's Payments Abroad Screening Tool, for yourself and for your spouse, because a spouse's position can differ from yours.

Tax on the benefit

The India-US treaty says that social security benefits paid by one country to a resident of the other, or to a US citizen, are taxable only in the paying state (Article 20(2)), and the saving clause leaves that provision in force. For a benefit paid by the US, the paying state is the United States. On the treaty's text India has no claim to tax it. A Chartered Accountant should confirm how the 2025 Act lets you rely on the treaty, since the treaty helps only through the Act.

The US side: SSA withholds tax on the payment to a nonresident alien who is not a citizen, 25.5% of each payment with no treaty reduction, and the treaty gives the US, not India, the right to tax these benefits, so it does not reduce that withholding. SSA's publication lists the treaties that do eliminate it, and the visa shelf's chapter reports that India is not among them. A US citizen living in India is taxed under the ordinary rules for Social Security benefits and files a US return. Plan the benefit net of that tax, not gross.

The Social Security for visa holders calculator estimates the benefit from a partial US career. The Social Security break-even calculator compares claiming ages.

Medicare does not travel

Medicare generally does not cover health care outside the United States, apart from narrow exceptions such as a medical emergency in the US where a foreign hospital is closer (Medicare.gov, travel outside the US). It will not pay a hospital in an Indian city.

That leaves a choice for someone who is already enrolled or is about to be.

• Part B costs money whether or not you use it. The standard premium is about $203 a month in 2026. Over a decade the premium for coverage that does not work in India adds up.
• Not enrolling carries a penalty. Medicare.gov says the late-enrollment penalty adds 10% of the standard premium for each full 12-month period you could have had Part B and did not, and you pay it for as long as you have Part B. A household that expects to come back to the US to live, or to be treated for something serious, can price that.

Staying enrolled for 10 years costs $24,348 in premiums. A surcharge of $101 a month, which is 10% for each of five skipped years, would add $18,261 over 15 years if you re-enrolled later. The numbers compare two costs; they say nothing about whether you will return. Medicare enrollment and special enrollment periods depend on your situation, and Social Security administers them, so ask SSA before you decide to drop or skip Part B.

Paying for health care in India

Once the US employer plan ends, health cost is yours to arrange. The sources read for this book describe the rules for health insurance in India, not prices or products, and nothing here recommends one.

• Employer cover can bridge the first years. Ask whether the group policy applies the waiting periods that an individual policy would.
• Individual policies set waiting periods for pre-existing conditions and for named diseases in the policy wording. Compare them across insurers.
• The continuity clock. The insurance regulator's Master Circular on Health Insurance Business of 29 May 2024 says that after 60 months of continuous cover under a policy, a claim cannot be contested for non-disclosure or misrepresentation except for established fraud. Credit for time served can be carried across when you port a policy to another insurer. Cover bought earlier starts that clock earlier. Whether an insurer sells a policy to a person who still lives abroad is for the insurer to say.
• US visits. Medicare, if you hold it, works in the US. Otherwise a visit to the US needs travel insurance sized for US prices.

A household with parents in India should price their cover separately: the Library's quick answer on visitor insurance for parents visiting the US and the supporting parents calculator cover that side.