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rob carrick

However much you agonize over your mortgage and investments, double that effort level when buying travel medical insurance.

Paying an uncompetitive interest rate on a mortgage can cost you thousands, and bad investment decisions can be harmful, too. But travel medical insurance is special in the way it can produce expensive surprises.

We're reminded of this by the case of the Saskatchewan couple that were charged $950,000 (U.S.) for medical services rendered after the wife gave birth nine weeks early while vacationing in Hawaii. As reported by CBC, their travel insurance provider, Blue Cross, denied coverage.

We seem to have absorbed the message that travel medical coverage is mandatory in all situations where someone crosses the border into the United States. But there's work to do in ensuring that people buy policies that will actually cover their bills.

It's a cliché to say so, but it's the fine print in travel medical policies that causes grief to people making claims. Consider the wording on pregnancy and childbirth. Marty Firestone, president of Travel Secure Inc., a seller of travel medical coverage, said women are generally covered up to week 31 of a pregnancy. "But then you have say to yourself: 'I'm covered and that's great [to week 31], but what if I give birth [prematurely]? Is my baby covered?' The answer is no."

All bills attributed to a newborn child would not be covered as per the terms and conditions of pretty much every insurance contract out there, Mr. Firestone said. It's the mother whose name is on the policy and has coverage, not the newborn child.

The biggest pitfall with travel medical insurance is the requirement to notify your insurer of any pre-existing medical conditions you have. Insurance agents and even some travel agents selling this type of coverage usually ask a series of medical health questions to uncover pre-existing conditions. But it's sometimes possible to have this coverage without answering any questions – if you're using travel medical provided on your credit card or a group plan at work, for example.

If you have a pre-existing condition, insurers typically require that it be stable (no new developments) for periods of 90, 180 or 360 days prior to your trip, depending on the policy. If you make a claim and you're found to have a condition that wasn't disclosed or hasn't been stable for the required period, your insurer will deny payment.

Mr. Firestone said the stability requirements can trip up people who buy a popular kind of policy called a multi-trip annual that covers you for a year, allowing any number of short trips. He said this kind of policy would have no validity if a health problem flared up after the policy was arranged but before a trip in the same year, and you had to make a claim.

Denied claims on travel medical coverage are bad for business, so insurers have started taking steps to make their policies more customer-friendly. Mr. Firestone said it's now possible to buy a rider on a policy so that you're covered for up to $150,000 on claims related to health issues that were stable for just seven days before your trip. "That's enough, in an ideal world, to get someone back home by air ambulance," he said. The cost of this rider adds about 40 per cent to your base price.

Another new feature, found in some policies aimed at snowbirds, caps your bill at $10,000 if you either don't disclose a medical condition when buying a policy, or make a mistake in the details.

Some marketing material for this feature uses the example of a 78-year-old who travelled to Texas to visit family and friends and had to spend three days in hospital being treated for pneumonia. In processing the claim, the insurer found that he was talking three medications for a lung condition, none of them disclosed when he applied for his travel insurance. Instead of declining to pay the entire bill for $36,563.72, the insurer applied a $10,000 deductible and paid the balance less a $523 contribution from this man's provincial health plan.

If despite all precautions you still find yourself with a big medical bill from a U.S. hospital or clinic, Mr. Firestone's advice is to negotiate it lower. In fact, there are consultants that will help you cut your bill and take a share of the savings. His take on the Saskatchewan couple's $950,000 tab: "That bill can be sheared down."


Here are five tips for buying travel medical insurance

1. Don't travel without it, ever: Coverage supplied by your provincial health-care plan is inconsequential in relation to the bills you can rack up in a short stay in a U.S. hospital.

2. Report any and all pre-existing medical conditions to your insurer: Denial of claims often results from people buying coverage without disclosing this information.

3. Be meticulous in your disclosures: Mistakenly answering health questions may invalidate your coverage; talk to your doctor if necessary.

4. Check for limitations and exclusions: Pregnant women should check this fine print without fail; so should people engaging in adventure sports.

5. Understand that you have no medical secrets: If you make a claim, your insurer will ask for your permission to dive into your medical files to discover what conditions you've been treated for and which medications you're taking.

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