It’s that time of year! We’ve already had enough of winter by mid January, at least I have. Our friends, family and co-workers are heading south to warmer climates with visions of warm beaches, toes in the sand and a beer in hand.
One of the most frequently asked question we get in our insurance practise is, “Should I get additional medical insurance while I’m vacationing in the U.S?” It’s a great question and the answer depends on a number of things.
If you are fortunate enough to have Out of Country Emergency Medical Coverage as a benefit on your employers extended health coverage you may wish to get the policy details of what constitutes an emergency. These policies are quite comprehensive and the insured and family members are covered up to 60 consecutive days. Many hourly and salaried employees may not be vacationing for more than a few weeks at a time. If you are retired and have lifetime extended health benefits from a former employer’s plan and plan on staying the entire winter, then I suggest that you read the policy particulars. Often the coverage will decrease from 60 days to 30 or 15 days depending on the age you have attained. Do not assume anything.
With medical costs in the U.S. “going through the roof” even a doctor’s visit may put a dent in your bank account. If you are unfortunate enough to require an extended hospital stay your finances could suffer significantly, so much so that it wipes out your entire retirement plan.
The problem is many Canadian snowbirds do go for more than 60 consecutive days and forget about the risk associated with a medical emergency while traveling. Or, even worse, think that nothing could possibly happen while walking the beach at sunset.
According to a 2013 TD insurance survey, only 50% of Canadians aged 50 and over even bother to check their out of country medical coverage before leaving on vacation and only 16% call their insurance providers to determine if they need to update coverage or purchase additional coverage.
So, do you need additional travel insurance? Absolutely, yes!
Canadians are technically covered by their provincial health plans for anytime they are out of the country, however these coverages are extremely limited. In Ontario, OHIP only covers $400 of medical expenses incurred in the U.S. and that doesn’t include ambulance, prescriptions, or other related expenses.
Many Canadians also think that because they have CAA or a gold credit card that travel insurance is an automatic throw in benefit and all expenses will be covered. Think again! Many of these coverages are very limited in what they will provide. They may limit the number of days or cap the dollar amount they will pay. Some plans will not cover children over a certain age. It would be prudent to compare these types of coverages before leaving on a extended vacation.
Where do I find a policy to suit my needs?
A quick web search will give you names of several providers that specialize in snowbird policies: kanetix.ca, CARP.ca, AwayCare.ca are a few or speak to your financial advisor. Cost will depend on your age, general health, destination, and length of stay. Be aware that some insurers will not provide coverage to countries where there are travel advisories. So if heading to some foreign exotic paradise check the countries “not covered” list or confirm with the insurer that your destination is not on that list.
What to look for in a policy
Unlike your home and auto insurance policy, where most policies are very similar, private health insurance can vary in costs and policy specifics so make sure to pay special attention to the following policy particulars when comparing policies.
Policy deductibles can range from $100 to $500. Some policies will allow you to buy out the deductible so that if you have a claim the net cost to you would be zero. This would be an extra premium that could be a costly option. Also be aware of policies that have a “per claim” deductible, which would charge every time you visit a doctor while traveling. Opt for a “per policy” deductible.
Single trip or annual coverage
If you travel to the U.S. multiple times during the year then an annual multi-trip policy. It is usually less expensive than taking a new policy every time you travel. If you only make a single trip in the winter, single trip is likely a better option. Many Canadians have travel medical insurance as part of their group extended health coverage. The typical policy will cover you for 60 consecutive days only, so a top up coverage is available and starts when the original policy expires.
Exclusions for pre-existing medical conditions
This is by far the most important of any private health insurance policy for snowbirds, who usually tend to be older and at time not in the best of health. All policies exclude undisclosed pre-existing medical conditions or require a pre-determined stability for a medical condition for a minimum of 90 day period prior to departure. The insurer’s conditions and requirements are very rigid. If you change medications or even discontinue a medication, have a minor procedure or visit a specialist, it is enough to exclude you for coverage or at the very least be excluded for that particular condition. If there is a pre-existing condition it is possible to obtain coverage but they may cost more or the insurer will exclude any claims arising from that particular condition. Either of the two scenarios is much better than the possibility of having a claim denied due to non-disclosure.
High risk activities
Are you covered if you decide to go cave diving in the Cenotes in the Yucatan peninsula? What about zip lining over the rainforest canopy in Costa Rica? If you are an adventure traveler you want to know what type of activities you are covered for and which ones you’re not.
Remember that all the nightmare and horror stories you have heard about people while they were traveling are true! When you consider the insurance premium cost as a percentage of the overall cost of your vacation, it’s a small price to pay to avoid a potentially total financial disaster.