Emergency Travel Medical Insurance: What you need to know travelling in an après COVID world

As the COVID situation appears to have stabilized and the ability to freely travel has returned, many are taking the trips of which they have long dreamt. If anything, the past several years has taught us that our access to travel can be restricted or revoked at any time and we have all come to appreciate the freedom to travel a little more than perhaps we did prior. Here's what you should know about travel insurance if you're planning a trip.

Some statistics:

• 63% of  Canadians agree travel is more important now than it was before the pandemic. – Rakuten poll‍
• Canadian  residents returned from almost 2.6 million trips in June 2022, nearly  seven times more trips compared with June 2021 – StatsCan‍
• The first  half of 2022 saw 8.75 million Canadians return home from an overnight trip  to the U.S. and other destinations. This was thirteen times the volume  recorded in 2021. – Hawaii Tourism Authority

What has been consistent however, prior, during, and now as we transition into a post-pandemic world, is the need for travel insurance when travelling outside your home province and/or country.

We have all heard a horror story or read an article about a person who travelled without travel insurance and was left with a large unexpected medical bill, or perhaps a story about an insurance company refusing to pay a travel insurance claim (we will get into common reasons why). This article is intended to help you avoid the potential pitfalls and avoid becoming another cautionary tale yourself.

First some basics.

What is Travel Medical insurance?

There are many distinct types of travel insurance available (trip cancellation, trip interruption, baggage loss, student travel, visitors to Canada, emergency travel medical etc.) but the type that people most commonly are referring to when speaking of travel insurance is Emergency Travel Medical Insurance. For the sake of brevity, we will call it Travel Medical for the remainder of this article.

Travel Medical is designed to pay for emergency medical expenses you incur when travelling outside your home province/territory or country.

For policies issued by a Canadian insurance company, you can expect the insurance company will try to get you back to your home province/territory as quickly as possible (your health and attending physician permitting) so that the cost of your ongoing care instead can be shouldered by your Provincial Health Care plan, rather than the insurance company. For this reason, maintaining Provincial Health Care coverage is always a pre-requisite for any Travel Medical plan offered by an insurance company in Canada.

Why should you have Travel Medical?

It is easy to argue that Travel Medical is the most important of all the travel insurances. Your biggest risk exposure (as measured in dollars) when travelling outside your home province or country is the risk of an unforeseen medical emergency occurring.

Given the potential magnitude of costs, these kinds of unforeseen expenses can negatively impact a person financially in a major way if they do not have coverage in place. It is the kind of expense that for a young person can leave you indebted for a lifetime, or someone in their senior years may force coming out of retirement and a return to work.

Depending on severity, medical treatment when outside ofCanada can easily become a bill for hundreds of thousands of dollars. Even travellingwithin Canada can leave you with ambulance bills in the tens of thousands.

Common misconceptions

Two of the most common misconceptions often repeated regarding travel are:

• “Doesn’t my provincial government health careplan cover me when I travel?” and
• “I’m covered by my credit card (I think?)”

Government benefits

Canada does not have just one health care system, rather ithas thirteen (one for each province and territory), as a result benefitsoffered to residents under each of those Provincial/Territorial Health Careplans can and do vary from one jurisdiction to the next.

Government benefits inside of Canada

If you are outside your home province exploring Canada,there is still risk of not being covered for certain medical expenses.

All the provinces/territories (with the exception of Quebec)have reciprocal billing agreements with each other for most types of medicalexpenses – meaning the provinces will reimburse each other for covered medicalexpenses you incur. The notable exceptions are expenses like ground and airambulance rides which will not be covered outside your home province/territory- these services can easily cost tens of thousands of dollars.

Regarding Quebec specifically, because Quebec does not havea reciprocal agreement with any province/territory, you would need to pay anybills you incur there up front. You may subsequently submit your receipts toyour own provincial health care plan for reimbursement, and you will bereimbursed the portion that would normally be covered if the same service hadbeen performed in your home province. Any remaining amounts you would beresponsible for.

It is for these reasons that Travel Medical coverage isstill recommended even when travelling within Canada.

Government benefits outside of Canada

Generally, when travelling outside of Canada you areresponsible for the difference between the amount that is charged, andthe amount that your provincial/territorial health care plan is willing toreimburse you for.

As an example, Alberta residents can expect around $100 perday limit, and B.C. residents can expect around $75 per day limit for reimbursementof medical expenses incurred outside of Canada – which is well short of whatyour medical bills have the potential to be.

It is obvious this is extremely limited, and for thisreason, even your provincial/territorial government will encourage you to seek outyour own travel coverage prior to your departure.

We encourage you to check online with your homeprovince/territory to see exactly what you can expect to be covered for by yourgovernment plan when travelling.

Credit card coverage

Depending on the credit card(s) you have, you may have sometravel benefits included.

While credit card coverage is probably better than nothing,best practices advice would be that you should not rely on it entirely for yourTravel Medical coverage.

In fact, your card may not even include Travel Medicalcoverage, rather it may include some of the other forms of travel insurance (TripCancellation & Interruption, Baggage Loss, Flight Delay, or Auto RentalCollision Insurance).

If your card does include Travel Medical, coverage willoften be limited to a certain number of days, limit the number of people whoare covered, and a pre-requisite may be that you need to have paid for yourtrip using that card for any coverage to be active.

It is important if you are going to rely on credit cardcoverage that you understand the terms and conditions of your policy beforedeparting. Sample policies can usually be easily found on the credit cardcompany websites.

Stability period exclusions – what are they?

All Travel Medical insurance - regardless of which insurancecompany will have a Stability Period Exclusion.

Understanding the Stability Period Exclusion is essential tounderstanding your travel coverage.

Stability Period Exclusion is the duration (measured indays) prior to your departure that anything you are being treated for, ortaking medication for must be stable (i.e. no changes).

The length of the Stability Period Exclusion will vary, most often due to your current age and/or your medical history.

Common Stability Period Exclusions are 3-months (90 days), 6-months (180 days), and 9-months (270 days).

If a particular medical condition is not stable, then expenses for medical emergencies relating either directly or indirectly to that condition may not be covered.

Where people get into trouble

When you hear stories of insurance companies not paying travel insurance claims, it is most often due to one of two reasons:

1. Because either the client did not disclose a medical condition when answering medical questions (if any), or
2. The client had a medical condition that was ‘unstable’ within the Stability Period as defined by the policy.

It should be obvious that one should answer medical questions truthfully and honestly – particularly if you want to have travel coverage that you can hang your hat on.

Allow me to illustrate the latter with an example.

Stuart’s story

Stuart (age 55) is currently taking blood pressure medication as prescribed by his physician. Stuart is planning to travel to Arizona for a golf trip with some of his friends in March. He visits his physician sometime in February, and his physician says “Stuart, you’re doing great – we’re going to reduce your blood pressure medication dosage.” Good news, right? Stuart purchases some travel insurance online and is feeling ready for his upcoming trip in March.

The problem? His policy has a 3-month stability period exclusion, and he changed his medication dosage (by his own doctor’s recommendation) a few weeks prior, after his recent doctor’s visit. In this case, Stuart’s blood pressure condition would not be considered ‘stable.’

Stuart, thinking he was covered and totally unaware of the stability period exclusion, heads to Arizona and has a medical emergency elated to his blood pressure while on the golf course. Thankfully, Stuart isstabilized and doing well, but unfortunately the medical bill is $155,000 USD at the local hospital.

Because Stuart’s condition was not stable (he changed his medication dosage) within the 3-month stability period, and the medical emergency was directly attributable to his condition the insurance company will not reimburse him for this expense.

What can you do?

Being aware of Stability Period Exclusions is an important first step. Now you are at least equipped to evaluate the policy you have (read the fine print) and understand how your health history may affect your policy in this regard.

• If your medical condition does not meet the definition of ‘stable,’ consider delaying your trip until you are safely outside the Stability Period as defined in the policy that you would be purchasing.
• There are options available in the Canadian marketplace for travel coverage that may cover conditions that are not stable within a 3, 6, or 9-month period. Please check with your insurance advisor regarding the availability of these options for you. Garrett Agencies can assist you with these options as well.

What about travel advisories?

It is always a good idea to check travel advisories prior to your departure for your destination.

Government of Canada travel advisories can be viewed in real-time at: https://travel.gc.ca/

This is important because a travel advisory can impact your coverage.

There are 4 'levels' of travel advisory:

1. Take normal security precautions
2. Exercise a high degree of caution
3. Avoid non-essential travel
4. Avoid all travel

If your destination has a Level 3 (Avoid non-essential travel), or Level 4 (Avoid all travel) advisory it means that if you experience a medical emergency at your destination due to something related to the travel advisory - it likely will not be covered.

It is not uncommon to see advisories for violence, political unrest, or, threat of terrorism. But can also be related to local (or international) outbreaks of disease etc.

Next steps:

If you are planning a trip, please contact our offices and we'll be happy to assist you with your travel insurance needs.

Thanks for reading!

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