Your Claim and What the Government Paid

Summer 2007 CSANews Issue 63  |  Posted date : Aug 07, 2007.Back to list

Do you have any idea how many idiots (oops, sorry, I meant to say people) hop on a plane and take a quick vacation to Disneyland, drop in to Las Vegas to invest a dollar or two, or just pop across the border to do a little shopping. I say "idiots," above, because they did not buy travel medical insurance. They thought that nothing would happen to them and, if it did, their provincial government would take care of them and pay their bills. After all, we Canadians have full government medical coverage for everyone.

In the excitement of Disneyland, their 10-year-old daughter broke her arm; the Vegas hustler ate some very bad food at one of the fancy buffets; and the guy that just popped across the border had a car accident and was hospitalized for two-and-a-half weeks. Nice, simple little claims, and Medipac deals with about 3,000 of these every year; but our clients are smart – they have Medipac Travel Insurance. For the "other" people, these simple little claims can, and do, become nightmares.

When they show up at a hospital, the first thing they take out is their Canadian health card and are told that it is useless in the U.S. (or anywhere else in the world, for that matter). Next comes the credit card request from the hospital. I hope that they have a very high and unused limit, or there may be trouble getting treated. Once they are in the system, the tests begin - MRIs, Cat scans, blood work, X-rays, ultrasounds, angiograms, catheters and lots of other fine and all-inclusive tests. Remember the guy with the food poisoning? Yep, he got them all.

I love to tell the story of Medipac's very first claim, many, many years ago. It was food poisoning. The not-to-be-mentioned U.S. hospital took out our client's appendix and, since he still had the food poisoning, scheduled him for a gallbladder removal operation. We found him and got him back to Canada before he "lost" any more body parts. We just naturally assumed that his spleen would be next. The formal diagnosis by his Canadian doctor was, of course, food poisoning and we sent him back to finish his vacation. I do wander off sometimes.

The U.S. health-care system makes money when they do tests, they make money when they operate, and they make money by keeping you in their hospital bed. In fairness, the doctors are exposed to huge liability suits if there is even a slight possibility of a patient getting some "free" money. This is one of the reasons that they perform so many unnecessary tests. But they do like the money, too. And the money is huge! Generally, the daily total bills for a hospital day will run between $10-20,000. They will be even higher if any new, high-tech medical devices are needed, such as drug-infused stents, pacemakers, defibrillators, etc.

The real problem with our test cases above is the financial nightmare that ensues. If they fail to pay the exorbitant bills right away, the bills are very quickly forwarded to special collection agencies and the browbeating and intimidation begin. These collection people are ruthless and, in my opinion, should be put out of business, but they are a main component of the U.S. system. The average U.S. hospital collects less than 50% of their billed charges in a given year. This is caused by the uninsured, the indigent and several other reasons. But, if you own anything, they are coming to get you, even in Canada. The final insult is the piddly little amount they receive as reimbursement from your provincial health-care plan. It is just so much simpler to buy travel insurance – good travel insurance.

You should know what your provincial government is paying for your out-of-Canada claim. I have given a few real-world examples in the attached table. These are real claims with real cheques from the provincial governments. Their cheques amount to next to nothing! Medipac has to settle the rest of the bills and that is why you buy travel insurance. And, if you are a wise snowbird – which I know you are – you will buy Medipac's Early Bird Program, NOW. We were unable to keep the 5% special discount due to $3 million in unexpected claims last season, but all of the claims-free and loyalty discounts still apply and the strong Canadian dollar is helping a lot. "Par" is more than a golf word; is it really possible? It should be a great year in the sunny South this winter – I can hardly wait.