If you are a Canadian resident planning on traveling out of the country—even for one day—supplemental health insurance is absolutely essential because your provincial health insurance does not cover you while out of the country—not to any meaningful extent. Travel health insurance is as important as your passport, and it requires your full attention and care when buying. There is no single plan that is appropriate for everyone. Such a thing doesn’t exist. And the wrong plan can be worse than none because you could be paying for something that would leave you without protection when you need it most.
First of all, understand that the out-of-country insurance available to Canadians is not a substitute for your provincial health plan but a supplement to it. Its benefits are limited. Its purpose is to cover unexpected medical emergencies while you are traveling out of the country. That it does well and at a fair price. But it is not comprehensive health care. It does not cover elective services, non-emergencies, or services for conditions you planned to have treated before leaving the country.
Until 1991, when Canadian provinces cut back foreign hospital payments for their traveling residents, out-of–country travel medical insurance was relatively simple and cheap. Basically, it covered supplemental items like upgraded rooms, private nursing, television and telephone charges, certain special needs, and repatriation if necessary, but the high costs of hospital and doctors’ services were still largely paid by the provinces. When these were cut back, private insurers were left with covering the differences, and the costs of providing insurance skyrocketed.
Unlike the European Union, whose member countries provide limited reciprocal healthcare services to each other, Canada has no reciprocal arrangements with any other country. And unlike the United States where many private insurance plans offer some limited out-of-country coverage, Canada’s provincial plans cover only a small fraction of such services. Provincial governments only pay from $75 to about $400 a day for out-of-country hospital care. Yet in the United States, costs ranging from $5,000 to $10,000 a day are quite normal, leaving patients, or their insurers, responsible for the difference.
The bottom line is that hospitals are businesses, and adequate health insurance is the way to protect yourself in this very expensive market.
To keep their premiums affordable and to cover a rapidly-growing market, insurers have developed many different plans, tailoring benefits, exclusions, special circumstances and eligibility requirements to the needs of all travelers of all ages, not just the young and super-healthy. Virtually all of these health plans are encompassed in broader travel insurance policies that also cover trip cancellation benefits, lost baggage, legal aid while traveling, and a myriad of other travel services. But here we concentrate on the health benefits because those are the costs that can wipe out your life savings or worse.