An Indirect Cost of Manufacturing in Mexico vs the United States
“proposed tariffs on Mexican exports, particularly in the automotive sector, have prompted Mexico to consider reciprocal measures. Economy Minister Marcelo Ebrard indicated that Mexico might impose its own tariffs on U.S. imports if such U.S. tariffs are enacted, emphasizing the potential economic repercussions for both nations.” Mexican president might be changing view on US as Trump win sends warning to ruling socialists
Why would the big three automakers open up shop in Mexico? Why would foreign automakers do similar? Well for one thing, Mexico has healthcare insurance (IMSS) for its citizens even if there is a wait for access. A fee can also be paid for better healthcare insurance. Also and for those who can not afford IMSS, there is the Seguro Popular system for which fees are decided by income. For Expats, there is private healthcare insurance such as Allianz. Don’t not go there for a long period unless you have a form of healthcare insurance which will cover you.
Also, Labor costs are less, proximity is close, and the nation is friendly.
Healthcare Costs in Mexico
Healthcare in Mexico: Overview of Costs & Plans Available in 2024
Premiums depend on age. For those aged 50 to 59, IMSS currently costs about $63 per month per person. For people 60 to 69, it is $89 per month, and 70 to 79-year-olds pay $93 per month. Nearly all treatments, including medications, are provided free of charge once you’ve paid your premium.
IMSS excludes many pre-existing conditions which might prevent participation in the program or require waiting periods before treatment would be covered. Fortunately, there’s another option—the Instituto del Salud para el Bienestar, or INSABI program. The free INSABI healthcare plan was established for people with pre-existing conditions and those who are not able to participate in IMSS for financial reasons, thereby ensuring medical coverage for all legal residents. INSABI accepts anyone not enrolled in IMSS and provides care for the unemployed and chronically ill. As is the case with IMSS, expats who hold either permanent or temporary residency may seek treatment.
There’s no need to sign up in advance under the INSABI plan; show up at any INSABI hospital and present your residence card, your CURP (a unique number that the Mexican government gives to all citizens and legal residents), and a compromante (a utility bill or other proof of your address in Mexico).
Whether you choose IMSS or INSABI, it helps to know Spanish or bring someone who does.
Having private insurance is also an option. You can go to any hospital of your choice—and Mexico has some excellent private hospitals. Keep in mind, though, if your private insurance is based out of the U.S. or another country, your benefits may be limited. The same is true for Medicare and Medicare Advantage policies.
To implement tariffs on product returning from Mexico after manufacture would be silly as you would lose the other benefits accrued there. The best alternative (my opinion) is to implement a national healthcare program. The US government can negotiate or set better prices due to the population is covering. You can always institute private coverage as long as they pay for their portion of public coverage.
United States Employer/Employee Healthcare Insurance Costs
Contribution Costs of Employer sponsored Healthcare for Employees.
State and local government workers in the lowest 25 percent wage category had a median annual premium amount of $1,181.04 for single coverage. For workers at the highest 25 percent wage category, the contribution at the 90th percentile was $3,666.00. (See chart 2.)
The share of premiums paid by private workers (regardless of contribution requirement) in establishments with less than 50 workers was 22 percent for single coverage and 38 percent for family coverage. The share of premiums paid by workers in establishments with 500 workers or more was 20 percent for single coverage and 26 percent for family coverage. (See charts 4 and 5.)
