Sorry snowbirds, provincial health plans should not help CDN’s cover their out-of-country medical costs

OPINION

The excerpted article was written by CARRICK | The Globe and Mail

With their endless premium increases, insurance companies are on their way to positioning themselves as the Number One villain in personal finance.

So it’s easy to sympathize with the anger of snowbirds over the Ontario government’s move to stop making a contribution toward emergency medical costs incurred when residents are out of the country, effective Jan. 1. This change is expected to result in higher premiums for private out-of-country medical insurance, which is already plenty expensive.

But Ontario is in the right here. Payments by provincial health plans to people requiring emergency medical care out of the country are miserably inadequate and thus a poor value for taxpayers. Worse, these payments help perpetuate the idea that you don’t need travel medical insurance when you leave Canada. It’s not up for debate – this coverage is essential.

The Canadian Snowbird Association has launched a court challenge of Ontario’s new policy on out-of-country medical expenses. The argument is that the new rule goes against provisions in the Canada Health Act that make your medical coverage portable when you travel outside your home province.

Portability may have practical value when travelling within Canada, but it’s largely fictional if you leave the country. Expect this coverage to amount to less than 10 per cent of the cost if you get sick or are injured outside Canada.

The exact amount paid by provincial health insurance plans for out-of-country emergency medical care varies, but an insurer used by Marty Firestone of Travel Secure Inc., a company selling travel insurance, has reported that typical payments would be $50 for an outpatient doctor visit, as little as $7 for a simple X-ray and $75 to $400 a day for in-patient admissions.

In Boca Raton, Fla., there’s a walk-in clinic that advertises rates on its website of US$99 to US$139 for minor illnesses and injuries. A serious illness could cost you a lot more than that. Mr. Firestone said he was told by a travel insurance contact that the full cost of intensive care in the United States can start at $5,000 a night and go well over $50,000 a night, depending on the hospital, the state and the diagnosis.

An actual case handled by this insurer: A 60-year-old man lost a finger in an accident maintaining his boat at a U.S. marina and the total medical bill came to $58,301 (Canadian). Provincial health care paid $76.30 of that amount.

Mr. Firestone said he has been getting phone calls from Ontario residents who say they need travel insurance because they’re no longer covered by the provincial health insurance plan. “I say to them, with all due respect, you were never covered by the provincial plan. That’s not coverage, it was a meagre pittance.”

One insurer offered an online quote this week of $750 for a 70-year-old Ontario male with high blood pressure who plans to spend 98 days in the U.S. this winter. So far, Mr. Firestone hasn’t seen any premium increases for travel medical insurance coverage as a result of the changes for Ontario residents. But he has heard that increases of 7 per cent to 9 per cent are possible in the near future.

Ouch, right? With home and vehicle insurance premiums rising sharply in many cases, the thought of yet another increase is sure to annoy. There’s always an excuse – repair costs are driving up car insurance premiums, while storms driven by climate change are pushing house and condo insurance premiums higher. Now, Ontario’s move on out-of-country emergency medical costs is set to push travel insurance costs higher.

How much higher can premiums go before people change their lifestyles? High vehicle premiums are a great incentive to try car sharing and a monthly transit pass. But it doesn’t seem likely that snowbirds will have to give up their winter getaways because Ontario stopped paying a small fraction of the cost of emergency medical care outside the country.

As for the rest of the population, many people have group travel medical coverage through their benefits plan at work. Premium credit cards often include travel medical coverage among the benefits they offer.

Warning: Travel emergency medical insurance may not pay out on claims if you have undisclosed pre-existing medical conditions. It’s not bullet-proof coverage, but it’s still essential. This applies whether or not your province offers token payments for out-of-country emergency medical care.

Source: The Globe and Mail

 

Ending Out-of-Country Medical Insurance Too Quickly May Put Ontario Consumers at Risk

The Canadian Association of Financial Institutions in Insurance (CAFII) warned today that the Ontario government’s decision to end OHIP coverage for emergency services for Ontarians travelling outside Canada could result in many people travelling abroad without adequate insurance coverage if the change is implemented too quickly and without sufficient communication.

The Government has set October 1, 2019 as the implementation date to end OHIP’s out-of-country coverage. But in order for consumers to continue to receive a high level of protection when traveling outside Canada, CAFII says more time is needed – at least a one-year transition period. This longer time frame would allow the Government to undertake a robust, multi-year communications campaign to inform Ontarians about the change and resulting implications. It would also give the industry more time to determine what the new premium rates will be, and to ensure its employees are ready to communicate about the changes and properly serve their customers.

According to CAFII, even under the current situation before the pending change, many Ontarians travel outside of Canada without adequate travel health insurance and without realizing they are at risk of incurring catastrophic financial costs. For example, according to the U.S. Centers for Medicare & Medical Services, the average cost of a three-day hospital stay in the United States is approximately US$30,000, and comprehensive care can run up costs of several hundred thousand dollars or more.

However, by allowing more lead time for the elimination of OHIP coverage for Ontarians travelling outside of Canada, it will provide an opportunity for the Government to inform consumers that OHIP will no longer cover them at all when they travel outside of Canada. It will also allow more time for both the Government and the insurance industry to address the dangerous misconception that private insurance is not necessary when consumers travel outside the country.

“We believe a robust communications campaign by the Government that supplements what the insurance industry is already doing will be critical in mitigating the risk to the travelling public of this change in insurance coverage,” says Keith Martin, Co-Executive Director of CAFII. “That communications campaign should emphasize to Ontarians the importance of having travel health insurance in place before travelling outside Canada, so that they and their loved ones will have immediate access to emergency medical care and related assistance, and can avoid exposure to potentially catastrophic and life-altering financial costs.”

At present, OHIP covers out-of-country inpatient services to a maximum of $400 per day, and up to $50 per day for emergency outpatient care. But when these amounts are no longer covered by OHIP, travel medical insurance will become even more important to have, and the cost will undoubtedly rise, says Martin.

About CAFII: 
The Canadian Association of Financial Institutions in Insurance is a not-for-profit industry Association dedicated to the development of an open and flexible insurance marketplace. CAFII believes that consumers are best served when they have meaningful choice in the purchase of insurance products and services. CAFII’s members include the insurance arms of Canada’s major financial institutions – BMO Insurance; CIBC Insurance; Desjardins Financial Security; National Bank Insurance; RBC Insurance; ScotiaLife Financial; and TD Insurance – along with major industry players Assurant; Canada Life; Canadian Premier Life Insurance Company; CUMIS Services Incorporated; and Manulife (The Manufacturers Life Insurance Company).

SOURCE CAFII

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