# Cost of obtaining healthcare in France as a retired US expat



## CarZin

We are a few years away from retiring to France, but I am getting things in order. We will likely have bought something well in advance. As I understand it, the tax treaty between the US and France prohibits the French government from assessing any income tax on pensions/401k/social security. That right and requirement stays with the U.S. But with all that, I am confused about the health care contributions.

According to what I have read, Healthcare is a right in France regardless of income. As a person in France for more than 90 days, I am entitled to apply for the Carte Vitale which gets me access to the system just like a French person. I can also supplement with the Mutuelle.

What is not clear is how I am contributing to this system as a retiree that has no taxable income as a result of the tax treaty. It would seem to be free and clear which seems to be improbable. Can someone who knows give me some details?


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## Bevdeforges

CarZin said:


> As I understand it, the tax treaty between the US and France prohibits the French government from assessing any income tax on pensions/401k/social security.


That's not exactly the situation - but as the old saying goes, "close enough for government work." Net-net, you must declare your pension income from the US and tax is calculated on those, but then you get a tax credit for the amount of tax related to the US pension income.



CarZin said:


> What is not clear is how I am contributing to this system as a retiree that has no taxable income as a result of the tax treaty. It would seem to be free and clear which seems to be improbable. Can someone who knows give me some details?


The French grant the national health care ("Sécu") to those folks legally resident in France living on a government pension (foreign or French). US SS is considered a government pension (as are the Federally established retirement fund programs like IRA, 401K and the like). Any mutuelle you choose to have is all on your tab. And, you may want to take a look at AARO's explanation of PUMA, the French health insurance: Special Note for Residents in France


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## CarZin

Thank you for your response. So, all things considered, if the totality of my income is derived from pension, social security, and 401k, I can expect (in a general sense) to pay taxes to the U.S. government, probably little to nothing to the French government, and I would still be eligible for healthcare? Obviously, I pay the two property taxes and a wealth tax on the amounts above the limit (I think it is 800k euro) as well as the French VAT on all my purchases, so its not that they aren't getting zero. Sound correct?


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## Bevdeforges

The way you put it, yes, you'll pay little to nothing in French income taxes (though you will still be obliged to declare your worldwide income to the Fisc). Don't forget, though that your worldwide income includes investments and bank accounts back in the US and any sums invested elsewhere in the world. There is data from your French tax declaration that will determine your taxes (or tax rates) for things like property tax or any sort of administrative function that requires you to show your income level (bank loans, for a simple example). Even if you pay 0 income tax, there is a "reference income" that is calculated each year for you that is used for many administrative dealings (say, if you decide to sign up for the local meals on wheels service when you get older or to decide if you are entitled to exemption from the annual TV tax).


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## CarZin

I don't understand the bank asset situation. I would expect bank accounts are treated as wealth, but not income. A hypothetical.

Let's say before moving to France I sell all my domestic real estate. The proceeds go into a bank account in the US. Let's say that is $3M. I live on pension and social security that amounts to $15,000 a month. I go to France and buy an apartment worth 800k euros. The way I currently understand the tax system is that I am going to pay no income tax in France based on the retirement income. The first 800k in property is exempt from wealth. France would likely consider the money in the bank account as subject to wealth tax but NOT INCOME. The bank account was established ad funded prior to moving to France. I would pay a wealth tax on the 3M yearly. But I would not pay any other assessed taxes. Am I off the mark?


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## suein56

Words fail me ..
Could I ask do you love or even like France ?

As an aside there is a Presidential election here shortly and a lot could change before you, potentially, arrive here.

I do realise I am treading dangerously here and expect to be reprimanded.


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## CarZin

What would make you ask that question? My wife and I have spent 3 months in France. Plus other small vacations for things like skiing. I’ve studied French extensively. We have no real desire to live the same existence we have in the US for our entire lives. There might be other countries we consider, but France is at the top of our list.
The reality is I am planning this more than 10 years out. I don’t make emotional decisions. They are calculated and I know what I am getting into. Healthcare is the most important thing for me and my wife. I don’t picture France as a fairytale. But I consider it a gateway for something different.


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## Bevdeforges

The wealth tax has been changed - as far as I know, it is now based on the value of your property assets, so does not include bank account balances. (Used to be different.) And the wealth tax has long been a matter of great contention in any event. If you're looking at 10 years out, there is no telling what may happen with it over that time.

You must declare your foreign bank accounts each year on your income tax declaration, but nothing related to the balances so what you report does not figure into your income tax assessment unless the Fisc has reason to look into your finances for some reason.

The American approach to money, finances and taxes tends to be very much at odds with European (especially French) sensibilities on this subject.


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## CarZin

Apparently so . Thank you very much. I am pretty sure we are going to learn a lot when we buy a property in a couple years. But all this advice is going to help me ask better questions when I pay the pros.


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## papaia

Bevdeforges said:


> The wealth tax has been changed - as far as I know, it is now based on the value of your property assets, so does not include bank account balances. (Used to be different.) And the wealth tax has long been a matter of great contention in any event. If you're looking at 10 years out, there is no telling what may happen with it over that time.
> 
> You must declare your foreign bank accounts each year on your income tax declaration, but nothing related to the balances...


Unless bank accounts in the states are zero interest, wouldn't the actual yearly interest have to be part of the "reported income", for tax purposes in France, thus - indirectly - a dependency/reflection of those balances? Or is the effect of so low interests nowadays an under some limit of tax to be paid in France, that it won't matter?


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## Bevdeforges

papaia said:


> Or is the effect of so low interests nowadays an under some limit of tax to be paid in France, that it won't matter?


Actually, that's probably true. But you're right - you are supposed to declare the interest or other earnings on foreign bank accounts in both France and the US. And actually, they do seem to "acknowledge" that by indicating a euro or whatever other small amount applies in the avis d'imposition.


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## Crabtree

Whilst I applaud you for wanting to get organised,if you are not going to be moving for a few years then believe me things can and probably will change. In my time in France there have been 3 different payment regimes for inactif expats on a pension-private healthcare, 8% payment to Secu, no payment to Secu,(plus of course your "top up" insurance") and who knows what will happen in the future.
In relation to tax then all you need to know at the moment is what Bev has outlined and the important thing to understand is that you declare all your income to France from wherever it comes from along with all accounts etc and the the tax treaty decides who gets first dibs at taxing you.The tax treaty does not mean you will not be paying tax in France it all depends on exchange rates etc so do not worry unduly at the moment but when you get closer to moving come back on here and you will get further info


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## papaia

Crabtree said:


> In my time in France there have been 3 different payment regimes for inactif expats on a pension-private healthcare, 8% payment to Secu, no payment to Secu,(plus of course your "top up" insurance") and who knows what will happen in the future


Would you mind explaining what from was the 8% for Secu? 8% of withdrawals for a whole year, from an IRA like account (which do not get taxed in France, but may have to be considered for the CPAM "quid pro quo" participation mentioned a few times) + maybe interest bearing accounts? Or? And what is the rule as of 2021/2022, by comparison? TIA


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## suein56

papaia said:


> Would you mind explaining what from was the 8% for Secu? 8% of withdrawals for a whole year ..


We paid our 8% for over 9 years for our contribution to our state health cover .. as we were 'inactifs' when we arrived.
So all of our income of every type was used as the base .. minus approx 10K€ .. and we paid 8% in what was left as our 'cotisations'. 
P!us we paid for a Mutuelle to cover the parts the state didn't pay.

This has all changed now .. as things to in France, depending on which party is in power and who is Président 😊


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## Bevdeforges

As I recall, back in the "8% days" the 8% only applied to income over the first 9 or 10K euros, and there was a cap on the amount you would pay - which was actually fairly low, too - just a couple thousand euros, no more, I think it was.


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## suein56

Bevdeforges said:


> As I recall, back in the "8% days" the 8% only applied to income over the first 9 or 10K euros, and there was a cap on the amount you would pay - which was actually fairly low, too - *just a couple thousand euros, no more, I think it was.*


I would need to find our paperwork from that time but I seem to remember paying more than 'a couple of thousand euros' a few times.
Will get back to you ..

Edit : You are right (I should have known 😊) .. having checked I find we paid by cheque just shy of €2000 each year for more than a few years.
Your memory is far superior to mine ..


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## Bevdeforges

I only remember the rather low cap on the charge because of my growing up in the US. Medical insurance is dreadfully expensive there and I just recall seeing the cap on the French fees and marveling at what a deal it was.


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