Your Rates are Too High!

Fall 2001 CSANews Issue 40  |  Posted date : Apr 01, 2007.Back to list

We have received several letters from people who received Medipac's Travel Insurance Package and they all had a similar, and all too familiar, complaint. Your prices are too high! The differences in premium they quoted, for the "new" plan they had found, varied between $200-$800. less and they were upset that the CSA's recommended program was so much more expensive.

When we receive these letters, they are immediately given to some of our senior people to investigate. We routinely obtain copies of all the competing (they wish) programs and we actually purchase a policy from them when it is not included with their application package. Our staff reviews all the information and often calls the letters' authors to clarify the information provided. In almost every instance, this year, and most other years for that matter, we have been able to identify a misunderstanding of the terms and conditions of the alternate policy. The most common of these misconceptions are as follows:

The word "Treatment" almost always includes taking a medication and, invariably, that medical condition was not covered by the other plan for the rates they were quoted or sold.

People read the words "medical treatment" and "taken medication" but miss the words "or had" in an application. A doctor who has decided on a "watchful waiting" approach to a symptom for, say, an anyeurism, a high PSA reading, diverticulitis, diabetes, etc., will not treat or medicate for it. You still have the condition and the words "or had" will exclude coverage of any complications.

Intermittent medications such as nitroglycerin or medication to prevent anaphylactic shock, which are carried by many people, but not used, again usually deny coverage for anything relating to that medical condition. Simply ask the question. "I carry nitroglycerin for angina, am I covered for any heart problems I may have? At these rates?"

The snowbird travel insurance business is very seasonal and some companies hire part-time help for their phone center to advise clients of rates and policy conditions. Miscommunication and the attitude that the client is responsible for proper completion of the application (which you are!) are common. This is a real concern when many companies void your policy if any questions are not answered correctly or you paid the wrong price.

The last point I wanted to make, once again, was on companies that "recommend" you exclude your medical condition to get a cheaper price (ie. cheaper than ours). This is probably fine if your medical condition was a broken leg, but I have seen supposedly reputable companies suggesting that you exclude your asthma or angina. Guess what the largest two reasons for claims are? Asthma and angina, and their complications. Once we talk to people about their "cheap" price they change their mind very quickly.

To put things in perspective, Medipac's program allows between 70% and 75% of our clients, even the ones with medical conditions, to qualify for our best rates. I have heard complaints, from distributors and agents of other plans saying, that less than 10% of their clients can qualify for the best rates. I wanted to tell them that their REAL problem was not paying claims for a person with a medical history.

Medipac has never promised to be the best price for every person in the world. We know that in the very rare circumstance, with exactly the right medical history and exactly the right combination of underwriting factors, and the very, very rare policy that is equivalent to ours, you may find a cheaper price. In our experience, the proper price for coverage equivalent to Medipac's is at least 150% higher than the lowest rate category a company offers. You have to move to their third or fourth table of rates to get real coverage.

In closing, a typical example is a quoted price of $620. The policy excluded coverage for heart related claims if a policyholder carried nitroglycerin. It didn't say that specifically, but that is what the policy meant. Our client did not realize this! He or she thought that since they had never used nitroglycerin, it did not "count". He obviously had to renew the prescription regularly to keep the drug fresh but I have never seen a policy that said "If you buy drugs but don't use them, you're insured". With the same company, you could get coverage that would be effective. The price - $1780.

Our Medipac policy was $973 for full coverage. Another satisfied, but somewhat poorer, client.