The Nickels bought a catastrophic health-care policy from a European insurer to cover them in case a pricey medical emergency arises in Panama. The policy costs less than $2,000 a year, but kicks in only after the first $10,000 in expenses. "I'm gambling at the moment that my health will hold out to 65," says Jon Nickel, 62 years old. "Once I get Medicare in three years, I'll be flying to Houston or Miami more often for my health care."

There is some good news. Health insurer Cigna Corp. a year ago rolled out a new insurance plan, covering health, dental and vision, that allows employers to extend health coverage to retired workers who move abroad. The plan currently covers about 200 retirees living abroad, but the insurer expects larger numbers, because "we anticipate the trend to retire overseas will grow," says a Cigna spokeswoman.

Many retirees also say that basic health care in many parts of the world is very good and inexpensive. Many doctors are Western trained, and some local hospitals are affiliated with U.S. institutions. Hospital Punta Pacifica in Panama City, for instance, has partnered with Baltimore's Johns Hopkins Medicine International.

In some countries, retirees who become residents gain access to the national health-care system. Harrison, who just gained Uruguayan residency, is considering joining the national health plan. He says a friend recently joined and pays the equivalent of $65 a month for coverage that includes hospitalization, doctor visits and prescriptions.

Measuring one country's quality of health care against another isn't easy, since so many variables exist. However, the World Health Organization's World Health Report 2006 (available at www.who.int) contains some statistical indicators to help compare health systems across various countries.

Still, for most major medical issues, "you probably want to return to the U.S.," because of superior medical technology in U.S. hospitals, says Robert Gallo, who founded Escapeartist.com, a Web site that offers information about overseas living. Internationalliving.com, to which Harrison is a contributor, also offers information on living overseas.

Housing

Some expat retirees rent property, others buy. The Millers bought land in Dominica and are building a 900-square-foot home with a big veranda in southern Dominica overlooking the Caribbean. The Nickels gutted and remodeled an apartment on the 24th floor of a Panama City apartment building and built a "very nice kitchen area" because they like to cook and entertain.