Canadian Travellers + American Hospitals = Large Claims

Though all American hospitals are required by law to treat your medical emergency—even if you have no health insurance—they are not prevented from demanding payment or sending collectors after you if you don’t pay. And crossing the border will not protect you.

American hospitals are run like businesses, even the non-profit institutions. They have to be. There are no government bailouts if they run deficits. Occasionally, even if you have travel insurance, you may find the hospitals coming after you for payment that your insurer did not cover. Perhaps you had a pre-existing condition your insurer didn’t know about, or you didn’t disclose your complete medical history when applying for medically underwritten insurance. This happens rarely, but it does happen. And if it happens to you, it can be calamitous. Claims of $25,000 to $30,000 for a two-day stay are not unusual.

What do you do if you are faced with such a claim? First of all, don’t panic. You’ll have to come to some kind of settlement just as you would with any other legitimate claim for payment. When you were in the hospital, you or your travelling partner surely signed forms confirming that you were ultimately responsible for payment of services rendered to you—even if you had travel insurance. Everybody signs such forms. Or, you may have signed a credit card deposit. All of these are legitimate commitments and they are designed to cover those contingencies where insurers deny your claim or pay only parts of it, where you are responsible for co-payments, or where you have no insurance.

But before you resort to paying out of your own pocket, make sure you’ve explored all possible sources of coverage—maybe you have additional coverage through your employee benefits, extended health care, or a credit card. No luck there? Consider appealing your denied claim. And if that doesn’t work, ask your travel insurer if your unpaid bill is due to an unpayable claim. Insurers often have provider relations services that can help you negotiate favourable settlements. They don’t like to have unhappy customers.

The worst thing to do is write a cheque for the full amount billed and send it off. No hospital expects to be paid the full “retail price.” If you do that, you will have overpaid. On average, US hospitals collect only about one-third of the retail charges they bill with domestic US health insurers, so don’t be afraid to negotiate and start low. Be tough, don’t hesitate to put up a “take it or leave it” stance, and, before you send away one dollar, get a properly certified letter from a high authority at the hospital that your payment will be considered payment in full and that no other collection efforts will be made. Sending away a cheque marked “payment in full” without having such a letter in hand is worthless. And a letter from a random accounting clerk won’t do it.

Your best protection is to get travel insurance from a professional who specializes in travel coverage. Then, take time to read and understand your policy, fully disclose your health status to your agent or when filling out your medical questionnaire, and check with your doctor if you’re unsure about your medications or the results of any recent tests. The responsibility for accuracy and completeness is yours. You can’t do all of this if you leave the purchase of travel insurance as the last item on your “to do” list.

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