Curaçao is a rule of law. This means that the society operates within a framework of legal rules and norms. Sometimes, these rules can have unexpected consequences that were not anticipated during the drafting of the regulations. Such omissions can also lead to significant financial or economic implications. In this article series, we will provide some examples.
Treaties hold a higher legal status than local ordinances or general measures. One relevant treaty in this context is the Treaty of Friendship, Commerce, and Navigation between the Kingdom of the Netherlands and the United States of America.
We relate this treaty to the legal regulations regarding admission and expulsion as well as health insurance reimbursement, as outlined in the National Ordinance on Basic Health Insurance (BVZ).
The American-Dutch Treaty of Amity and Commerce, signed on October 8, 1782, was an agreement between the United States and the Republic of the Seven United Netherlands. In 1956, this was replaced by the Treaty of Friendship, Commerce, and Navigation between the Kingdom of the Netherlands and the United States of America. This treaty is still in effect in all countries within the Kingdom of the Netherlands, including Curaçao.
In a ruling from the Joint Court of Justice in 2014, the following was established:
Article II, paragraph 1, of the Friendship Treaty states that the nationals of one Party have the right to enter the territory of the other Party and reside there.
Article 3 of the accompanying Protocol states that American nationals in a part of the Kingdom of the Netherlands outside Europe enjoy the same treatment as Dutch nationals who were not born in that part. According to Article 3 of the National Ordinance on Admission and Expulsion (Ltu), adult Dutch nationals who were not born in Curaçao are granted automatic admission to reside if they:
Can provide a recent certificate of good conduct.
Have housing and sufficient means of support.
The Court ruled that Article 3 of the Protocol must be applied directly, meaning that American nationals have the same residency rights as Dutch nationals who were not born in Curaçao.
This ruling was reaffirmed in 2024, specifically emphasizing that non-Antillean Dutch nationals are granted automatic admission and do not need a residency permit. This means that Americans, provided they meet the specified conditions, should also receive an automatic declaration of legal residency.
Due to this legal framework, not only non-Curaçaoan Dutch nationals but also Americans who settle and register in Curaçao fall under the National Ordinance on Basic Health Insurance (BVZ). A basic health insurance plan in Curaçao can be particularly attractive for some Americans, as healthcare premiums in the U.S. can be very high.
First, some background on medical provisions in America. Part of the American population, especially those aged 65 and older, is insured through Medicare. Medicare offers reasonable coverage at normal premiums to individuals who have worked in the United States for at least ten years. Employees in the U.S. are typically insured through their employers, with organizations of more than 50 employees required to provide health insurance.
Those not insured through Medicare or an employer can turn to the Health Insurance Marketplace. Insurance companies offering policies in this market must comply with the Affordable Care Act (ACA), which mandates acceptance of applicants regardless of their health status. The costs of such private insurance can be high, depending on family circumstances. For a couple aged 60 and older, costs can quickly reach $20,000 to $40,000 per year, depending on the chosen package: Bronze, Silver, Gold, or Platinum. If the insured smokes, premiums can be 50-100% higher. The high premiums are one reason why 27 million Americans lack health insurance.
Being uninsured or the significant amount an American pays for health insurance can incentivize them to settle in Curaçao under the Friendship Treaty.
According to the BVZ, all residents are insured, except those who require a residency permit under the Ltu. Since Americans settling in Curaçao do not need to apply for a residency permit, they are automatically insured for healthcare.
The fund for Basic Health Insurance is financed through:
An income-dependent premium paid by the insured.
An annual contribution from the government of Curaçao for public pensioners, welfare recipients, and contributions toward costs for those aged 65 and older.
The premium to be paid or contributed depends on income:
No premium is due for an annual income up to Cg 12,000.
For an annual income between Cg 12,000 and Cg 18,000, a sliding scale applies.
Above Cg 18,000, the premium is 13.6%.
For individuals no longer paying AOV premiums, those over 65, the premium is 6.5%.
Above Cg 150,000, no premium is due on the excess.
In 2023, the premium income for the BVZ fund amounted to Cg 321 million, with the government contribution at Cg 278 million. By the end of 2023, Curaçao had 139,465 BVZ-insured individuals, representing 89.5% of the population. According to the 2023 census, there were 264 Americans residing in Curaçao that year.
Americans who permanently settle in Curaçao, typically older, retired, and affluent individuals, are automatically insured under BVZ. They pay a BVZ premium based on their income. If their taxable income in Curaçao is low and they use their assets, they can keep their BVZ premium low. This is not unlikely, as this group often consults a tax advisor before registering in Curaçao to keep their taxable (global) income low, potentially utilizing the Pensionado arrangement.
As a result, for this specific group of Americans, their contribution to the BVZ fund is limited and does not correspond to the risk of reimbursed medical costs or the actual costs incurred. Compared to the American situation, settling in Curaçao offers significant financial advantages, as substantial savings can be achieved on health insurance premiums, and unlike in the United States, the deductible and/or personal contribution in Curaçao is negligible.
The number of registered Americans on the island is limited but growing. Some will work in Curaçao, where employers are required to withhold income tax and social premiums, including BVZ. In that case, there is hardly any advantage for the American.
The Friendship Treaty of 1782 creates a distinction between Americans and other nationalities among non-Dutch nationals. This means that American retirees are insured under BVZ, while all other nationalities must apply for a residency permit and obtain private health insurance as a condition to settle in Curaçao.
When the National Ordinance on Basic Health Insurance was established in 2013, it was overlooked that, based on the Friendship Treaty between America and the Netherlands, every American could settle in the Kingdom of the Netherlands, including Curaçao. According to the Court’s rulings, every American who settles in Curaçao is also automatically BVZ insured.
The BVZ does not cover foreigners under the Ltu but does cover Americans. This was not anticipated by the legislator. For Americans, this arrangement is attractive since they pay less for medical costs and/or health insurance in Curaçao.
