Heading Away on Vacation?
Don’t Forget to Pack Your Travel Insurance
You have planned your perfect vacation.
You get to the airport and that nagging feeling in your stomach tells you something isn’t right. What did you forget? Then you realize you forgot to arrange your travel insurance. The plane boards in minutes. Do you miss your flight? Do you go online and arrange it when you reach your destination? Do you simply hope you won’t need it.
Could this be a recipe for disaster? The Ontario Health Insurance Plan (OHIP) provides very limited coverage for Ontarians travelling abroad and, according to the Ministry of Health and Long Term Care, it should not be relied upon to cover healthcare expenses incurred while travelling.
OHIP will pay very limited amounts for physician services and hospital/health facility services, and only if certain conditions are satisfied. It will pay only for insured, emergency out-of-country health services that are rendered to an insured person and to qualify as an ’emergency’, a number of criteria must be satisfied :
- the treatment must be medically necessary, and
- the treatment must be performed at a licensed hospital or licensed health facility, and
- the treatment must be rendered in relation to an illness, disease, condition or injury that :
- is acute and unexpected, and
- arose outside of Canada, and
- requires immediate treatment.
These provisions are intended and designed to provide a very limited amount of funding for the medical treatment of insured residents of Ontario if they incur an unexpected illness, disease, condition or injury while they are outside of Canada. If the illness, disease, condition or injury arises before you leave Canada, or if it is not acute or unexpected, no payment can be made.
The amount that OHIP pays is set by regulation. The amount paid for out-of-country health services is very limited and usually will not be sufficient to cover the full cost of the services rendered. OHIP covers only very limited amounts for hospital, health facility and physician services.
OHIP strongly advises residents of Ontario to purchase additional health insurance every time you leave Canada to cover any expenses in excess of the limited funding provided. It is also critical you check with your supplementary health insurance provider to determine if there are restrictions relating to pre-existing health conditions.
Although OHIP will pay the actual cost billed by the out-of-country physician(s) or the cost of the same physician service(s) in Ontario, whichever is less. Physician services in Ontario are usually rendered at a significantly lower cost than those billed at out-of-country health facilities.
- For outpatient emergency room services, OHIP will pay $50 Canadian (CDN) per day.
- For inpatient services, OHIP will pay $200 CDN per day, or up to $400 CDN per day for some specialty services.
So while OHIP may provide some financial assistance at a most critical time, the actual cost of a serious medical event could total tens of thousands of dollars more.
Travel insurance can help preserve your savings and your financial security should the unexpected happen. However, it is vitally important to ensure you arrange coverage well before departure and ensure the insurance will meet your needs.
Although some people may have a tendency to be less than completely honest about medical conditions when applying for travel insurance, the risk of non-disclosure could be financially devastating. Every travel insurance policy contains a pre-existing condition limitation period. This provision eliminates the insurer’s liability, throughout the full duration of the policy, for any expenses related to a condition that was present during the defined period prior to the policy’s effective date. This generally refers to any medical condition for which the traveller had symptoms, saw a physician, had treatment, took medication or was referred for treatment yet to be completed during a specified period of time such as 90 or 180 days prior to the effective date of coverage.
Furthermore, some insurance companies will not provide coverage if you do not arrange it before departure and those that do will also enforce a waiting period before making coverage effective.
Travel insurance is very affordable at younger ages and shorter trip durations. Premiums rise as we age and pre-existing medical conditions can become an issue. When managed effectively, many medical conditions can be covered. Complete and full disclosure of one’s medical history and travel plans is absolutely necessary to ensure your insurance is actually in-force and will be there when needed. Vacations can be a time of rest and relaxation, or an opportunity for adventure and adrenaline-pumping activities. Regardless, leaving Canada without effective travel insurance is a risk too great to consider.
CFP, CHS, CLU
Certified Financial Planner