The following is an excerpt from Chapter 5 of The Border Guide: A Guide to Living, Working, and Investing across the Border by Robert Keats. Mr. Keats is a dual citizen who holds a certified financial planner designation in the United States and Canada as well as a registered financial adviser designation in the United States and registered financial planner designation in Canada. Read Mr. Keats' tips for retiring to the U.S. here.
Doctor in the House
Getting the Most from Out-of-Country Medical Coverage
One of the most perplexing matters for Canadians wintering or taking up permanent residence in the United States is medical insurance. Americans moving to Canada can, after a 90-day wait (in most provinces; New Brunswick now has no waiting period), simply join the provincial medicare system. There appears to be an endless squeeze in both Canada and the US between medical services provided and the costs of those services. This squeeze guarantees that the areas of travel insurance and medical insurance are complex and constantly changing.
The last thing people need to worry about when they travel is becoming ill or suffering an accident. Unfortunately, sickness and accidents respect neither your travel itinerary nor your socioeconomic status. A medical emergency can happen anywhere, at anytime, and to anyone!
Any unforeseen expense is important to today's traveller, and you will want to be protected no matter how great or small the potential loss. Minor problems, such as the loss of luggage, can be a traumatic experience for many travellers, ruining their holidays or business trips. However, a catastrophic illness or an accident outside Canada can turn a relaxing trip into a financial nightmare.
The decline of out-of-country coverage in the provincial health care programs in the late 1980s and early '90s greatly increased the demand for private health insurance to fill the widening gaps in coverage. This demand lured many insurers into the travel health-insurance market. The competition made it difficult for consumers because there were nearly 100 plans from among 30 companies to choose from. They did, however, benefit from the competitive pricing that drove premiums down significantly. Many of these new insurers lacked the specialized experience and resources to effectively manage claims and lost huge sums of money very quickly. The health insurance industry has now consolidated into about a dozen committed and professional companies, offering 20 to 30 plans. Current provincial medical coverage for Canadians while outside of Canada is listed in Figure 5.1 along with phone numbers and websites you can consult for more recent updates and changes.
Many travellers are unaware of the need for adequate travel insurance. While provincial health and hospital programs may provide adequate benefits at home, a Canadian who finds himself or herself in trouble outside the country may discover the provincial plan covers only a small portion of the actual medical expenses. As illustrated in Figure 5.1, provincial plans vary considerably with respect to the amounts paid outside Canada. Prince Edward Island was the first province to reimburse travellers at provincial rates of reimbursement, and currently still pays the most for out-of-country medical services. A few provinces have followed suit under pressure from their residents, but still no provinces have matched Prince Edward Island's reimbursement schedule for out-of-province travelers. Most provinces pay out-of-province hospital bills, at around $100 per day. This is only a small fraction of what hospitalization actually costs, especially in the United States, where medical expenses may easily exceed $2,000 per day. In most US hospitals, $100 a day would barely get you a parking spot, a bed pan, or a couple of aspirins. Canadians should be aware that in many parts of the world, physicians and hospitals do not follow the Canadian system of billing, where the daily room charge is all-inclusive and covers most services and treatments. Many hospitals outside Canada charge a fee for room and board, and then charge for every procedure and bandage they use. In the past, the Ontario Health Insurance Plan and other provincial plans have not only reduced the portion of these costs that they pay, but they have also made it more difficult to collect reimbursement. More people had to rely on their travel insurance for the entire medical bill. It remains to be seen whether this trend will reverse itself in the near future.