For the most part, Medicare cannot be used

For the most part, Medicare cannot be used outside the US by permanent expats. There is some travel coverage with the Medicare policy, but it is not a significant coverage level. As far as US expats are concerned, Medicare is really designed for coverage when you go back to the US and have routine checkups or you have a condition that you want to be treated for in the US. Medicare is not designed for coverage in another country. 

 

For expats who live abroad, the basic options are:  1) pay out of pocket; 2) pick up a health insurance policy that is local in nature and get into the "nitty-gritty" of what that coverage would be locally; 3) get international health plans that are out there with a few vendors like Cigna, Bupa, and a couple other smaller companies, but these policies tend to be very expensive; or, 4) evacuation insurance, which will only cover a US expat to get back to the US. 

 

I have clients who rarely go back to the US. They have cancelled their Medicare coverage. However, Medicare is not that expensive. If you can afford the physician coverage, I would recommend keeping it. Part A is the hospital coverage. Part B is the physician coverage. Now there's also Part D, which is the pharmacy coverage. Drug costs are much lower outside the US. The fourth part of Medicare is the Medicare Supplemental, which fills in the gaps that Medicare has and that you buy from a private medical insurance company.

 

I would maintain the hospital and basic physician coverage on Medicare even if you live outside of the United States. Let's say you are a young retiree living abroad for a decade.  Anything could happen. You might need to go back to the US. Healthcare costs are so expensive in the US. If you think about what you pay in premium for Medicare versus the benefits, it is a highly-subsidized insurance coverage provided by the US government, so why not take advantage of it?