High US Health Costs Not Likely to Allow Premium Reductions

Though the loonie has hit new 30-year highs against the US greenback this year, don’t expect to see any substantial reductions in out-of-country travel health insurance premiums this coming winter vacation season.

It’s true that currency exchange rates in the past have forced insurers into the unfavourable position of collecting their premiums in cheap Canadian dollars while paying out for medical emergencies in the United States in expensive US dollars. But that equation has changed a lot now that the two currencies are nearing par.

Some skeptics might say the near-parity negates insurers’ justification for charging as much as they do. Not really, as US health costs seem to know no boundaries and continue to rise faster than the cost of living, wage levels, the difference in exchange rates, or anything else measurable by statisticians. In 2006 the cost of health care in America amounted to over $7,000 per capita. In Canada that cost ran to $4,548.

I recently heard about a tourist from the UK who was diagnosed with an irregular heartbeat and treated at Holy Cross Hospital in Fort Lauderdale, Florida (for two nights), ending up with a $17,000 bill. Actually, that’s not an unusual hospital charge for high-tech cardiology. But the situation was made worse when the patient’s insurer found that he neglected to mention some pre-existing conditions when applying for insurance—this spiked his claim, leaving him liable for the whole bundle. (There’s a lesson here for all travellers thinking about ways to shave a few dollars off their insurance premiums.)

Health costs in Europe have also been rising steadily—more than 80 per cent since 1990 among the developed countries making up the Organization for Economic Cooperation and Development. Though per capita health costs in Canada are among the highest in the world, the costs in France, Germany, Norway, Switzerland, and Luxembourg are just as high or higher. So wherever you go, travel insurance is a necessity. It’s not just in the US that health care costs can ruin you.

I have also heard increasing reports of foreign hospitals—particularly in Mexico, and some in the US—demanding deposits or other forms of payment from Canadian patients, even though they are properly insured. Such cases need to be reported and investigated so they can be dealt with by insurers or their representatives. If you know of any such cases, drop me a comment and we can expose what’s going on.

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