ILO Members serving Etobicoke York

Avoid having your claim for medical insurance benefits denied.

Most Ontario residents prudently apply for travel insurance before they go on vacation outside Canada, with the expectation that they will be covered for medical expenses in the unlikely event of an accident or sickness while they are away.  About 95 per cent of claims for travel health expenses are paid out, but for the remaining 5 per cent of Canadians for whom claims are denied each year, approximately 15,000 claims, the costs can result in the loss of all their savings, their home, and/or bankruptcy.  For Ontario residents who made a claim for travel medical costs and were denied benefits, the claimant may have been engaged in a dangerous activity or extreme sport, or did not disclose a pre-existing medical condition.

Claims for medical expenses are most commonly denied because the applicant had a pre-existing medical condition that wasn’t reported on the travel insurance application.   Many Canadians don’t realize that a pre-existing condition may have no, or very little, connection with the illness or injuries for which medical treatment was sought during the vacation.  Also, this so-called ‘condition’ may involve a medical question or concern which you discussed with your doctor or health-care professional, but which was never diagnosed as a specific problem or illness.  A change in your medication within 60 to 180 days of your application, including the dosage or kind of medication, may also be viewed as a change in your 'condition'.

A Saskatchewan woman was recently billed for $950,000 in medical expenses when her baby was born prematurely during a vacation in Hawaii.  Her claim for expenses was denied by her insurer, Saskatchewan Blue Cross, because she had a bladder infection when she was four months pregnant.  Also, her coverage expired while she was in hospital.  Travel is not recommended for women in their third trimester of pregnancy; however, this is not the only instance in which individuals who applied for insurance coverage in good faith, were shocked to have their claim refused.

A British Columbia man had a heart attack requiring emergency surgery while on vacation in Florida. He had purchased travel insurance from Manulife Financial, but was denied the $346,000 U.S. in medical expenses because he failed to answer ‘yes’ to a question on his insurance application about two medical conditions that he wasn’t aware he had (but which were listed in his medical file). The two conditions were unrelated to the problems with his heart, but the applicant’s mistake on the medical form provided a loophole for Manulife to reject his claim.  Although the Florida hospital reduced the man’s bill for expenses to $160,000 after determining that he was uninsured, this remains a sizable amount for anyone to pay ‘out of pocket’.

In May 2014, CBC reported on three additional cases involving Toronto, Oakville and Chilliwack B.C. customers who purchased travel insurance from CIBC or RBC, but the banks denied coverage because the applicants had a pre-existing condition that was not reported (although it had nothing to with the medical emergency for which they were claiming). In one case, a 69 year old woman responded ‘no’ to whether she had been treated for a heart condition on her application because she was once tested for a pain in her arm, but no medical problems were diagnosed.  CIBC insists that she should have answered ‘yes’ to the question about a heart condition.

It is very difficult for the public to understand what constitutes a ‘medical condition’ on travel health insurance applications, so clearly, the definitions for these terms need to be less ambiguous.  Also, anyone obtaining insurance over the phone needs these terms to be fully explained.

Canadians can buy travel insurance from a broker, travel agent or directly from an insurance company.  In all cases, applicants are asked to fill out a questionnaire with many detailed questions about their health, such as whether or not you have a history of cholesterol or heart disease.  Insurers use this information to quote the cost of your travel insurance.   You can get coverage for a pre-condition that is reported on your application, but that will increase the price of your insurance.  Alternatively, you may choose to have an illness resulting from your specific condition excluded from coverage if it occurs during your vacation.

Certain serious or recent pre-existing conditions may be considered ‘uninsurable’ or make it difficult to obtain coverage, but in many instances, coverage will be available again after a ‘stability period’ for the condition.  Some insurance companies offer the applicant an individual assessment to determine insurability.  Just because your doctor says it is okay for you to travel after having an illness or surgery, this does not mean that the insurer will agree; the ‘stability period’ deemed safe by your doctor may be 30 days, but is generally 3 months for insurers and can vary from 2 months to a year or more.  Be aware that the insurance industry does not tend to use a doctor’s opinion for this determination because it is viewed as subjective.

If you claim for travel insurance expenses, then your insurer will commonly requisition your health records from your doctor.  If a pre-existing condition is identified in your records but was not reported on your travel insurance application, the insurer may say that they would have quoted a higher rate had they known about the condition so the coverage that you got was based on a misrepresentation of your medical condition.  Consequently, a claim that was initially accepted may be later denied.  In fact, any discrepancies between the details on your application and your doctor’s records may negatively affect your claim.  However, anyone who did not know they had a pre-existing condition and never discussed or sought treatment for this condition, cannot be refused expenses if they require medical treatment during their vacation.

The president of the Travel Health Insurance Association of Canada, Alex Bittner was quoted as saying that most Canadian health plans do cover people under the age of 60 even if they do not reveal their pre-existing condition(s).  He added that Canadians with chronic, but stable, conditions are also usually covered.  These comments are somewhat inconsistent with the opinions of Marie Thomas of InsuranceHotline.com who warns that some insurers consider your condition ‘not stable’ if you had a doctor visit for any reason other than your annual checkup within the past year.

The cost of travel health coverage is dependent on your age, medical history and the kinds of activities that you are engaged in during your vacation.  For example, an impulsive decision to go ocean hang gliding or bungee jumping, which results in serious injuries, will cost you more than planned if your medical expenses are denied.  Since OHIP covers only 7 to 9 per cent of medical expenses incurred out of the country, the costs of even a broken leg can be significant if experienced in U.S.A where medical costs are one of the highest in the world.

Ontario residents should also be aware that air ambulance costs for accidents that occur in other provinces are not covered by OHIP. Travel back to Ontario is also not covered by some travel insurance policies.

When you are applying for travel insurance, Canadians are encouraged to phone their broker or insurer and clarify any questions about their possible ‘pre-existing conditions’.  You should also carefully read the exclusions and limitations on your policy.  There is absolutely nothing to be gained by not being honest and forthcoming on your application with regards to any medical conditions that are known to your healthcare provider.  The whole point to having travel health insurance is to be covered, particularly when large medical expenses unexpectedly arise, so why pay for insurance that your insurance company is likely to deny. Remember also that your policy extends only to the exact time period for which you applied, but may be extended while on vacation if you decide to lengthen your trip.

If your insurer denies your claim, you do not have to accept this decision.  Critics suggest that insurers believe that most claimants will accept their denial of benefits, and if they drag out the claims process, you will give up on receiving your due expenses.  If your claim is denied, request the specific reason for the denial in writing from your insurer, along with references to the requirements in your policy that they believe were violated.  Also demand written evidence of how you failed to uphold the policy requirements.   You can also request your medical records from your doctor.

The Personal Injury Lawyers of Ontario (ILO) law group has experience and expertise in seeking compensation for individuals who were denied coverage by their insurer, whether for travel health coverage, disability insurance or an accident claim.  Most individuals fill out their travel insurance application in good faith and without any intention to deceive their insurer.  If your lawyer can demonstrate this at trial, a judge may require the insurer to pay a claim that was previously denied.  A lawyer can help you to determine whether you have a case for challenging your insurer’s denial of your claim and get you the benefits to which you are entitled.