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With their endless premium increases, insurance companies are on their way to positioning themselves as the Number One villain in personal finance.

So it’s easy to sympathize with the anger of snowbirds over the Ontario government’s move to stop making a contribution toward emergency medical costs incurred when residents are out of the country, effective Jan. 1. This change is expected to result in higher premiums for private out-of-country medical insurance, which is already plenty expensive.

But Ontario is in the right here. Payments by provincial health plans to people requiring emergency medical care out of the country are miserably inadequate and thus a poor value for taxpayers. Worse, these payments help perpetuate the idea that you don’t need travel medical insurance when you leave Canada. It’s not up for debate – this coverage is essential.

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The Canadian Snowbird Association has launched a court challenge of Ontario’s new policy on out-of-country medical expenses. The argument is that the new rule goes against provisions in the Canada Health Act that make your medical coverage portable when you travel outside your home province.

Portability may have practical value when travelling within Canada, but it’s largely fictional if you leave the country. Expect this coverage to amount to less than 10 per cent of the cost if you get sick or are injured outside Canada.

The exact amount paid by provincial health insurance plans for out-of-country emergency medical care varies, but an insurer used by Marty Firestone of Travel Secure Inc., a company selling travel insurance, has reported that typical payments would be $50 for an outpatient doctor visit, as little as $7 for a simple X-ray and $75 to $400 a day for in-patient admissions.

In Boca Raton, Fla., there’s a walk-in clinic that advertises rates on its website of US$99 to US$139 for minor illnesses and injuries. A serious illness could cost you a lot more than that. Mr. Firestone said he was told by a travel insurance contact that the full cost of intensive care in the United States can start at $5,000 a night and go well over $50,000 a night, depending on the hospital, the state and the diagnosis.

An actual case handled by this insurer: A 60-year-old man lost a finger in an accident maintaining his boat at a U.S. marina and the total medical bill came to $58,301 (Canadian). Provincial health care paid $76.30 of that amount.

Mr. Firestone said he has been getting phone calls from Ontario residents who say they need travel insurance because they’re no longer covered by the provincial health insurance plan. “I say to them, with all due respect, you were never covered by the provincial plan. That’s not coverage, it was a meagre pittance.”

One insurer offered an online quote this week of $750 for a 70-year-old Ontario male with high blood pressure who plans to spend 98 days in the U.S. this winter. So far, Mr. Firestone hasn’t seen any premium increases for travel medical insurance coverage as a result of the changes for Ontario residents. But he has heard that increases of 7 per cent to 9 per cent are possible in the near future.

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Ouch, right? With home and vehicle insurance premiums rising sharply in many cases, the thought of yet another increase is sure to annoy. There’s always an excuse – repair costs are driving up car insurance premiums, while storms driven by climate change are pushing house and condo insurance premiums higher. Now, Ontario’s move on out-of-country emergency medical costs is set to push travel insurance costs higher.

How much higher can premiums go before people change their lifestyles? High vehicle premiums are a great incentive to try car sharing and a monthly transit pass. But it doesn’t seem likely that snowbirds will have to give up their winter getaways because Ontario stopped paying a small fraction of the cost of emergency medical care outside the country.

As for the rest of the population, many people have group travel medical coverage through their benefits plan at work. Premium credit cards often include travel medical coverage among the benefits they offer.

Warning: Travel emergency medical insurance may not pay out on claims if you have undisclosed pre-existing medical conditions. It’s not bullet-proof coverage, but it’s still essential. This applies whether or not your province offers token payments for out-of-country emergency medical care.

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