Be careful with travel health insurance

It's likely a bit risky for me to suggest now is the time to start planning your winter vacation or your sojourn to warmer climates. Summer is short enough...

But the mail I have received from Snowbird Medi-Quote and Medi-Pac Insurance this week have reminded me there are early-bird specials available, with deadlines as early as Aug. 15.

Maybe the best reason to look at your insurance needs and have a policy approved now is your health can change at any time. If a policy has been secured and at least partly paid based on your current good health, you will have it in place for this year (but confirm this with the insurance company or your broker).

In case you have forgotten why you need travel health insurance, an illness or accident while you are outside Canada will easily cost you thousands -- and can cost you hundreds of thousands -- of dollars in medical costs. Only a small fraction of these services are reimbursed by provincial medical plans.

I remember how shocked I was when an official of an insurance company told me they had received a claim from a U.S. hospital for more than $300,000 for a client who had a heart attack and was in intensive care for 10 days before the insurance company could safely get them into an air ambulance home.

Your provincial health care will reimburse you for costs incurred only based on provincial rates for the same service. This is only a fraction of the actual costs for American medical services. Provincial coverage is capped at between $150 and $450 a day, while the actual costs in a U.S. hospital can run to $10,000 a day, plus extra charges for everything from cotton balls and Band-Aids, on up.

We still refer to my son's three-hour visit to a Montana ski hill medical clinic as the $2,000 flu -- and he only saw a physician's assistant. (This included the $80 charge for each $5 bag of saline solution.)

A car accident, slip-and-fall, or a mild illness can be painful financially. A serious illness or accident without travel health insurance coverage could bankrupt you.

With that need in mind, let's look at some details.

The first issue may be pre-existing conditions. If you have had an illness or you are being treated for a medical condition, be sure to disclose everything on your insurance application form.

You may get the bad news your condition will not be covered, but better to know now than after something happens on a trip and you find yourself unprotected. Failure to fully disclose all conditions potentially gives the insurance company grounds to withhold payments on the entire policy, even if the claim is unrelated to the omitted condition.

Many pre-existing situations can be covered if the condition has been stable and if the medication has been consistent for an extended period of time. A change in medication -- even for the better -- can prevent you from getting coverage, so a good tip is to see your doctor in the spring and make any prescription changes then, so you can be stable for six months before the policy takes effect.

It's all complicated, so I suggest getting expert help in the form of an independent broker like Snowbird Medi-Quote (www.mediquote.ca), which helps people connect with the right insurance company, based on the traveller's age, destination, length of stay and health issues.

People with medical conditions need to have a personalized insurance quotation prepared and shop around, as different insurance companies have different approval policies.

Many travel agents also have training and experience with travel insurance, so if you are booking through an agent, be sure to discuss your insurance options with them, especially if you have no medical issues.

If your travels will not include the United States, you may qualify for much cheaper coverage with some companies, so make sure you look into that. This just makes sense, because most other countries, such as Mexico, have reasonable costs for health care compared to America. There are also multi-trip policies available.

Please read and try to understand your entire policy, any coverage exclusions and terms. Keep copies of the emergency claim numbers and procedures, and also leave these with family members. Above all, disclose everything on your application.

Better to be safe than sorry. Bon voyage!

David Christianson is a fee-for-service financial planner with Wellington West Total Wealth Management Inc., a Portfolio Manager (Restricted).

dchristianson@wellwest.ca

Republished from the Winnipeg Free Press print edition July 27, 2012 B9