Personal Finance

You need coverage of at least $1 million, advisor says.
By Gail Bebee | 09/06/17

If you had a heart attack while on vacation in Florida, and spent five days in hospital for emergency bypass surgery and an aortic-valve replacement, would you be able to pay the bill, which Healthcare Bluebook, a fair-pricing website for health care, estimates at US$46,000?

About the Author
Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com; her website is www.gailbebee.com.

Your provincial health plan is unlikely to cover more than a small fraction of the cost. For example, the above bill includes charges of US$1,800 per day for hospital services. The Ontario Health Insurance Plan caps payment for out-of-country hospital services at $400 per day (in Canadian dollars); Quebec's Régie de l'assurance maladie reimburses a maximum of $100 per day for hospitalization.

You can avoid the financial burden imposed by an unexpected medical emergency while travelling outside Canada, or even outside your home province, if you are covered by travel health insurance, also known as travel medical insurance. This type of insurance is intended to pay the expenses that your provincial health insurance plan does not cover.

You may already have coverage through your home insurance, a credit card, or a group health plan from your employer, union, professional association or other affiliation. Single-trip, multi-trip and extended-stay plans can be purchased from insurance companies, insurance brokers, travel agents and some tour companies, associations such as the Canadian Snowbird Association, and some retailers.

No matter the insurance, there will be limitations and exclusions which will be spelled out in the policy certificate.

Emergency medical services that are typically covered, according to the Travel Health Insurance Association (the industry's trade association in Canada), include hospital care, related drug and diagnostic services, outpatient services, physician and laboratory costs, prescription drugs, assistance with bringing a family member to your bedside, transportation home, and vehicle return if you are unable to drive home.

A travel health-insurance policy sets payout limits for specific services, and a total limit which is typically in the range of $1 million to $10 million. "You need coverage of at least $1 million, and ideally more to cover emergency medical expenses and your return home," says independent insurance advisor Rino Racanelli, owner of BackToBackAnnuities.com in Oakville, Ont.

To be eligible for travel health insurance, a person must have valid provincial health coverage. There will be age restrictions and limits to how long you can be away. The list of circumstances where benefits are not paid usually includes, but is not limited to certain medical conditions; pre-existing medical conditions that are not stable; ignoring symptoms or medical advice; certain pregnancy-related complications; participating in risky activities such as scuba diving or bungee jumping; abuse of medication or alcohol; self-inflicted injuries; or destinations in the midst of war, revolution or other hostilities.

If you think travel health insurance is included with other insurance you have, check the policy well in advance of your departure date to confirm your coverage. Some group plans, such as my own retiree extended health plan, specifically exclude coverage for expenses incurred out-of-country. The Financial Services Commission of Ontario's Shopping for Travel Medical Insurance https://www.fsco.gov.on.ca/en/insurance/brochures/pages/brochure_shopfortravel.aspx brochure includes a useful list of key questions to consider when evaluating any travel health policy.

If travel health insurance is included with your credit card, review the benefits offered by checking the latest version of the insurance certificate, which should be posted at the card issuer's website. This insurance comes as a standard package that cannot be altered.

Your credit-card account must be in good standing, and you may be required to charge a defined portion of the trip to the card. Coverage will include the primary cardholder, and probably an accompanying spouse and dependent children. The payout limit is typically between $1 million and $5 million per insured person.

The maximum trip duration covered is usually between 15 and 31 days, and the time you are allowed to be away decreases with age. Few credit cards provide any coverage for those 65 or older. Rewards Canada has compiled a handy table showing trip coverage by age for various travel cards.

The travel health insurance that you buy is more flexible than credit-card coverage, and policies with higher age limits, longer stays and coverage for pre-existing medical conditions are available. The application process includes a declaration of health status. Completion of a medical questionnaire is required above a certain age, usually 55 to 60, to determine eligibility and cost. Care must be taken when signing off on your health status or answering the questionnaire. Any error or omission, even a seemingly trivial one, could result in denial of a claim.

An online search tool such as InsuranceHotline.com or HealthQuotes.ca is a good starting point for shopping for travel health insurance. Consider using an insurance broker, since he will have access to policies from several companies, and can provide useful advice on the pros and cons of each.

A positive development for consumers is the position paper released on May 31 by the Canadian Council of Insurance Regulators. In the paper, the CCIR makes recommendations on how consumers can be better served and protected by travel insurance. Among its proposals are the development of common standardized definitions and terminology; improvements to the application, screening and claims process; simplifying and improving disclosure documents, and improved training and information for sales forces.

If your credit-card or other travel health insurance has no upfront process to determine eligibility, the underwriting -- determining if you qualify for coverage -- occurs only if you make a claim. Your medical records will be closely examined, and your claim could be denied because you did not meet the precise requirements set out in the policy. Given this reality, this type of insurance is best suited to those in good health.

If you have a pre-existing medical condition, an insurance broker who specializes in travel insurance is your best bet for obtaining travel health coverage. These brokers are aware of the terms and conditions of policies from numerous companies, and can find the most suitable policy for you.

When packing for your trip, remember to take along a copy of your travel health policy and your provincial health-insurance card. You will need these if you experience a medical emergency while travelling. Most policies require the holder to contact the insurer's 24-hour assistance line before undergoing medical treatment unless the emergency precludes this.

If you are required to pay for emergency services while abroad, keep all receipts and submit your claim promptly, since there is generally a time limit for submitting claims.

Travel health insurance could mean the difference between having your costly medical bills paid by insurance, and financial ruin. Don't leave home without it.

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