Why the Provinces Won’t Offer Bob’s Dream Coverage

Canadian snowbirds have waited a long time. But most provinces have yet to obey federal law and increase coverage for emergency medical care outside of Canada.

“Ontario (reimbursement) rates have never gone up a cent in 21 years,” notes Dr. Robert MacMillan of Kingston. “The average paid across Canada is 7 to 8 per cent of the cost of US care.” 

Meanwhile, the cost of private travel insurance has risen, as has the pain of having a medical claim denied. So how did it come to this? And what are the chances governments are going to offer Robert Woodcock’s dream coverage?

“What I would like to see is OHIP (Ontario Health Insurance Plan) give me coverage the same as I have at home,” says the 72-year-old Toronto snowbird who began a letter-writing campaign. “I don’t mind paying the provincial plan to cover me, but I want to know that I have coverage and (be sure) that I am not going to be left hanging, and having to deal with a large payout.”

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A Former Government Insider Gives a History Lesson

We turned to MacMillan to get his perspective. He is both a former government insider and a medical adviser to travel insurance providers. He has an insider’s perspective that is unique.

He doubts Woodcock’s proposal would work, and he points to the poor record of bureaucrats controlling abuse by their citizens who headed south for care—not just in an emergency—and overpricing by US hospitals.

Provinces began trimming out-of-county medical coverage during a period of runaway budget deficits, a deep economic recession, and delays for treatment at local hospitals.

“Things became tighter here … [and a person] might have had to wait six weeks for a hip operation. [So, conveniently] they might have a little fall-down in Cleveland and go to the Cleveland Clinic and have it done.”

Sitting Ducks and the $500,000 Man

At that time, MacMillan was executive director of Ontario’s Health Insurance Division. He notes his staff didn’t even have the authority initially to challenge what US hospitals were charging, and had difficulty detecting who actually needed emergency care while away, and who should have stayed home for medical care. “Hospitals [in the US] found out we were sitting ducks,” he said. “If we got a bill we paid it.” 

“The icing on the cake was … US [treatment] providers … would come up and entice drug addicts, alcoholics and co-dependants (family members) with free plane tickets and accommodation, which was often in a purchased hotel next to the hospital.”

News media reported in 1991 that one Toronto man rang up $500,000 in US drug-treatment services, the equivalent of about $739,000 today. NDP health minister Evelyn Gigantese resigned after disclosing his name in the legislature.

So British Columbia, Ontario, and other provinces took a shortcut. They chopped reimbursement for emergency medical care outside of Canada, ignoring the Canada Health Act of 1984. To this day, only Canada’s smallest province and territories now pay as much for emergency medical services outside of Canada as they pay here, as the law requires. See what provinces pay for out-of-country care.

“[The rise in billings] became ridiculous and I actually remember the figure for Ontario the year before we switched (to lower coverage limits for out-of-country treatment), claims went up from $275 million to $375 million just in one year.”

Meanwhile, Liberal and Conservative governments in Ottawa stood by and did nothing. Later, that approach was endorsed by the Commission on the Future of Health Care in Canada—headed by a former NDP premier, Roy Romanow.

Changes to provincial funding and the resulting changes to private travel insurance were particularly worrisome to retirees who spent months in the southern United States. Medical writer Milan Korcok recalls working with Canada News publisher Bill Leeder and Robin Ingle of Ingle International to organize educational seminars and identify snowbird groups throughout Florida. 

“We tried to get snowbirds together so they could found their own association, elect an executive, encourage travel insurers to provide more user-friendly products, and get provinces to pay a larger share of out-of-country medical costs,” says Korcok.

“Bill and I stayed close to offer assistance, but it was really Ross Quigley, president of Medipac International Inc. of Toronto, who organized the board of directors to create the Canadian Snowbird Association,” says Korcok.

He recalls that Quigley rented space to the CSA in his Toronto building, “organized their communications system and helped to make the CSA a viable national organization.”  The CSA has pushed the provinces and Ottawa for years to restore a higher level of compensation for out-of-country medical care. To no avail.

Lessons Private Insurers Had to Learn

The reduction of coverage for out-of-country care spawned rapid growth in the size and number of sellers of travel insurance, plus tighter policy restrictions.

In the early days, Blue Cross tried to sell policies that would cover applicants of widely different ages and quality of health. But competitors rushed to scoop up younger and healthier travellers with lower prices. Different marketers came and went as they tried to undercut competitors’ prices.

The successful ones charged more to those at greater risk of a medical emergency. They developed sophisticated assistance centres to approve emergency care only. They arranged for claimants to fly home and found hospital beds to control costs, and then kept costs and premiums as low as possible to remain competitive.

“They either pre-negotiate some kind of preferred rate … or more commonly a reduction of up to 40 per cent or more,” says MacMillan. “[US hospitals] bill high but they will take lower, just like the used car lot.”

“The premiums would be a great deal more if [travel insurers] didn’t do that and the government wouldn’t be in a position to be watching things and assisting in managed care.” He expects prices would be much higher if governments tried to offer the sort of alternative Woodcock would like.

“I just couldn’t imagine that any government would try to bring back insurance of [the kind Woodcock would like], because of the over-usage of the system and the lack of managed care,” MacMillan concludes.

Learning The Ropes of Private Travel Insurance 

If MacMillan is right, and Bob won’t get the coverage he wants from government, what’s next? We test how well he has done so far in his application for coverage and in avoiding the risk of having a potential claim denied. Just how well does he know his own health? Should he consider alternative coverage? Should he take extra steps to protect his health?

Stay tuned for part 3 of this series, Can Bob Count on His Travel Policy?

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