Canadian Senior Travellers Save Provincial Health Treasuries a Bundle

Nearly one third of Canada’s 32 million people are baby boomers, aged 55 to 64, and nearing retirement. Many of them are looking at another 25 to 30 years of active, productive lives. Another 4.3 million (one out of seven) are at least 65, and their numbers can be expected to double in the next 25 years.

That’s the news out of Statistics Canada, and given the good health, improved agility, and longevity of seniors and boomers, it represents a potential tsunami coming into the leisure travel and tourism marketplace.

But it also represents a huge challenge to private health insurers called to cover the health bills when Canadians are stricken by medical emergencies abroad—whether Michigan, Albania, or Thailand. Publicly funded provincial health plans cover only a tiny share of a Canadian’s emergency medical bills while out of the country: a pittance. A $100 or $200 reimbursement on a per diem charge of $5,000 is hardly reimbursement. And before you groan about rapacious American hospitals, understand that a top line hospital in Toronto will do the same thing to foreigners unlucky enough to be stricken in Canada.

Every time a Canadian traveller has a medical emergency abroad, the cost is diverted away from Canada’s GHIP (government health insurance plans) and is financed by private insurers and the fees they collect from their customers—even though these customers have been paying taxes and contributing to the financing of GHIP most of their lives.

I am not aware of any studies that have quantified how much money is spent on emergency medical services rendered to Canadians out of the country, or even how many Canadians are treated abroad each year. But last year, Canadians made almost 23 million overnight trips out of the country—many of those covered by private health insurance. As an example, snowbirds (those 55 and over, travelling for at least 30 consecutive days) made an estimated 673,400 trips out of the country in 2005, according to Statistics Canada, and at least 85 per cent of them bought supplemental health insurance. Two years ago, the Conference Board of Canada valued the health portion of the Canadian single and multi-trip annual travel insurance market at over $360 million. And that’s very conservative; it doesn’t include the coverage provided by group policies such as credit card, employer, and pension plans.

Add to that the growing numbers of Canadians awakening to the possibility of medical tourism—a very different kind of trip which entails travelling abroad for procedures you can’t get in a reasonable time at home. While not covered by standard travel insurance, there are specialized private health insurance plans that may cover certain out-of-country treatments.

Provincial health ministries and finance ministers ought to be grateful that as many Canadians travel abroad as they do—especially seniors, who normally account for almost 45 per cent of the total health care spending in Canada.

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