Travel Insurance and the “Pre-Existing Condition” Enigma and the Canadian Visitor to the United States of America (or Elsewhere)

When Canadians think of health insurance, they typically think of the universal health and medical coverage offered by the provincial government in their home province and which is offered and made available to all residents of Canada under the Canada Health Act. Unless they are a “snowbird”, the idea of medical travel insurance seldom comes to mind.

Many Canadians are fortunate to have employee benefit plans or individual health insurance programs, which are generally intended to enhance medical coverage (i.e. dental, vision, and prescription drugs) which is not otherwise available under the provincial health care programs. Many of these plans have imbedded in them a travel insurance component. “Travel insurance” refers to protection against “unexpected or unforeseen” medical emergencies, sudden illness or accidents which require medical attention, while travelling outside of the home province. Many also provide trip cancellation, trip interruption and baggage loss and other related unexpected travel events.

In an earlier article entitled, “Health Care and the Canadian Visitor to the United States of America”, I outlined the history of universal health care coverage in Canada (Alberta) together with its practical limitations and in doing so, identified the absolute need for supplemental or extended health insurance when travelling to the United States (or elsewhere), not only for the “snowbird” who frequently travels to the U.S. for their extended vacation but also for the infrequent visitor who crosses the border for shorter periods of time. In this regard, it is vitally important to understand the types of medical travel insurance available in Canada (hereafter referred to as “TIP”) and the nature of the limitations, conditions and exclusions that are contained in these types of insurance products. Moreover, it is critically important to be familiar with the “pre-existing condition” enigma contained in most of these policies. Failure to do so, could result in considerable financial risk to the uninformed or unprepared traveler.

Supplemental or extended health care coverages available in Canada[1]

There are two basic types of supplemental or extended health care coverages available in Canada, which will typically have either as an option (insurance rider) or as an imbedded feature of the coverage, a TIP component. These are:

a)  Employee benefit plans, and

b)  Individual health insurance plans.

A subset of the Employee benefit plan, which is sometimes referred to as a “group policy” is a “conversion health insurance policy or plan”.

The individual health insurance plans are sometimes referred to as “personal health insurance” or “family health insurance”.

Both of these types of plans can be either an underwritten policy also known as a standard health plan or a guaranteed issued policy or guaranteed health plan, with each having their own nuances.

An underwritten policy or standard health insurance plan, whether an employee benefit plan or as an individual health insurance plan, is subject to and is based upon the completion of a detailed medical questionnaire, upon which the insurance company will assess or determine the risk and decide whether or not to issue the policy.  Assessing the risk is the essence of “underwriting” an insurance policy, regardless of the type of insurance being requested, whether it is life, home or auto insurance. In each case, there are certain “risk” factors which must be taken into account in determining whether the insurance policy will be issued in first instance and then, what annual premium will be charged for the coverage. Take for example, auto insurance. There are many risk factors to consider including the age of the driver, the driver’s abstract or record, prior accidents or claims, the type or make and model of the vehicle and its value. All of these factors are taken into account in “pricing” the product, before the policy of auto insurance is issued.

The same principles apply to supplemental or extended health insurance, which is underwritten by an insurance company. Among the various risk factors is the overall or general health or well-being of the applicant as identified in the health or medical questionnaire.  This is referred to as a “health rating”. The disclosure of a “pre-existing condition” will be critical in assessing the health rating and if the risk is accepted and the policy approved, what the cost will be for the coverage. As one might imagine, disclosure of certain types of “pre-existing conditions” will result in the insurance company refusing coverage altogether. (See footnote 3 ) Disclosure of your current medical condition and the type of medications being taken on an ongoing basis, for example, high blood pressure medication will be determinative of whether coverage will be granted but more importantly, the cost or monthly premium relating thereto.  Failure to disclose a “pre-existing condition” will result in the potential for a denial of coverage, should a related claim be made at a later date.

Within the underwritten policy or standard health plan and the travel insurance component of the coverage, (whether imbedded or as a rider), the identification of a pre-existing medical condition becomes problematic. As a result, the TIP portion of policy will only cover an out-of-country medical emergency or illness related to the pre-existing condition if and only if the condition was stable for a specified period of time before the trip’s departure date or the effective date of the policy. 

Each insurance company has its own definition of "stable", and the required stability period usually ranges from 90 days to 180 days and in some cases up to 365 days depending on the nature of the pre-existing condition. This is what is referred to as a “stabilization” or “stability” clause. Some insurance companies also consider that any medical condition which is under “treatment” will be deemed to be a “pre-existing condition” and “treatment” may also include the taking of any form of medication for the condition or any CHANGE in that medication. In other words, a medical condition may not necessarily be considered “stable” from a travel insurance perspective, if you are taking medication for that condition and on the advice of your physician, you are prescribed an increase or decrease in that medication. Strange as it may seem, a medical condition may not necessarily be considered “stable”, even where the condition is improving to such an extent that your doctor considers it appropriate to reduce or lower the medication. [2] Failure to take your doctor’s advice regarding treatment including a change in medication could also result in a denial of coverage.

What is a "Pre-Existing Condition"?

A pre-existing condition is any known medical or health condition that existed prior to applying for insurance.

When is a Pre-Existing Condition Covered under a travel insurance rider or policy?

Travel insurance plans cover pre-existing conditions if:

  1. The applicant is eligible for coverage (each insurance company has its own Eligibility Questionnaire with some health-related questions);
  2. The applicant's pre-existing condition is considered "stable" for a required amount of time before applying for coverage or prior to a planned departure, once the policy is in effect.

It is important to emphasize that not all insurance companies are the same and that the definition of “pre-existing condition” may vary and that each company may have a different stabilization clause setting out the prescribed stabilization period or time that must lapse before a condition is deemed to be stable and therefore covered.

Required stability periods can range anywhere from 90 days to 270 days depending on the policy and the type of “pre-existing condition” and in some rare cases as much as 365 days. Generally, the medical condition will be considered stable if the condition:

  1. Hasn't required a change in medication (includes decrease in medication).
  2. Hasn't required new treatment.
  3. Hasn't shown any change in scope or severity.
  4. Has been treated as per a doctor's instructions

HealthQuotes.ca has a useful tool to identify the various online insurance providers and their respective definitions and stability clauses.[3]

Here are some examples of some industry leaders in the travel insurance industry and their definitions of pre-existing condition and stability clause provisions.[4]

Manulife Travel Insurance and Stable Pre-Existing Conditions

Manulife stability periods range from 3 months to 6 months before the effective date of the policy  (not the date of purchase).

"Stable medical condition" means that all of the following apply:

Allianz Travel Insurance and Stable Pre-Existing Conditions

Allianz stability periods range from 90 days to 365 days, depending on the health rating of the insured.

Stable describes any medical condition or related condition, including any heart condition or lung/respiratory condition, for which:

The following are considered stable:

  1. Routine (not prescribed by a physician) adjustment of insulin to control diabetes provided the insulin was not first prescribed during the time period specified in the Pre-Existing Conditions Exclusion shown on your confirmation of coverage.
  2. Change from a brand name medication to a generic medication provided the medication was not first prescribed during the time period specified in the Pre-Existing Conditions Exclusion shown on your confirmation of coverage and there is no increase or decrease in dosage.
  3. The routine adjustment of Coumadin or Warfarin provided they were not first prescribed during the time period specified in the Pre-Existing Conditions Exclusion shown on your confirmation of coverage.
  4. A minor ailment.

GMS Travel Insurance and Stable Pre-Existing Conditions

The GMS stability period is always 180 days, regardless of the health rating of the applicant.

A medical condition is stable, if during the period of the time specified, you:

RSA Travel Insurance and Stable Pre-Existing Conditions

RSA stability periods range from 90 days to 365 days, depending on the health rating of the insured.

Stable means any medical condition (other than a minor ailment) for which all the following statements are true:

Medipac and Stable and Under Control Pre-existing Conditions

Medipac is the recommended travel plan by the Canadian Snowbird Association and the Royal Canadian Legion and it is touted as having the most generous and liberal definition of “pre-existing condition” and the least intrusive stability provisions in the industry. This coverage has a 90 day stability clause in all cases of a “pre-existing condition” and refers to the condition as being “stable and under control” for the requisite period in order for coverage to be effective. If you are retired and are looking for stand-alone medical travel insurance policy, I recommend that you investigate the policy offered by Medipac and compare it to other plans offered by other insurance providers. The information on this travel plan can be found at the Canadian Snowbird website.[5]

A Word of Caution

Most insurance companies offer travel insurance either as a feature of the health insurance plan, whether as part of an employee benefit package or as part of the personal or family health plan or as an add-on. The TIP can be an annual fee program covering all travel during the year (Multi-Trip Annual plan) or a per trip plan. It is important to note, however that if you experience medical condition after the effective date but prior to the departure date of any trip, you are still subject to the stability clause. In these circumstances, prudence should dictate and would it be wise to consult with your insurance provider or their administrator, to ensure that you are covered. Again, a simple change in medication may be enough to trigger the stability clause. Ignoring the situation may be foolhardy and may unnecessarily put you at risk!

Guaranteed Issued Health Plan

Many of us or our spouses have the benefit of employee benefit plans or group insurance plans, which do not require any form of detailed health questionnaire or a “health rating” as basis for eligibility or acceptance into the program. Simply being a member of the class of persons intended to be protected is sufficient. To that extent, the plans were considered to be “Guaranteed Issued” health plans. They became popular as a means for employers to attract and retain competent employees in the private sector. As their popularity grew, many unionized employees and public sector employees negotiated this form of individual and family health coverage as part of their employee package. Again, many of these have a TIP component.

Depending on the insurance company underwriting the employee benefit plan or group coverage, the TIP may or may not have a “pre-existing condition” or stability provision.

These employee benefit provisions were great for employees and their young families, particularly as it related to the extended health care coverage for dental and vision care and prescription medication. As time progressed and age became a factor, coverage for prescription medication becomes a more valuable feature.

But all of these benefits were conditional upon continued employment by the employer and ceased on termination of employment, whether as result of being laid-off or as a result of retirement. Many employees who found themselves in this predicament and were at risk of losing their coverage had to look for an alternative. The insurance industry seeing a marketing opportunity was quick to fill the void and developed a “conversion health insurance plan”.

Conversion Health Insurance Plan

Conversion health insurance is a special form of supplemental or extended health insurance. These plans typically are guaranteed in nature as there is typically no “underwriting” component and acceptance is guaranteed by the insurance company offering this product as an adjunct to the employee benefit plan or group policy. These type of plans endeavor to compliment the employee benefit plan or group policy in effect as an alternative for the employee who is either laid-off or who retires. Although a welcomed alternative, they often offer less coverage than the original health insurance plan or alternatively give the applicant an option to take or decline various forms of the coverage which might otherwise have been available. Many offer as an option, TIP coverage which for the retiree is a welcomed benefit. Conversion insurance plans are generally the same cost of non-conversion personal or family health insurance but have the advantage of customizing the type of coverage needed or required. Premiums vary between provinces and are affected by the number of people insured and the levels of desired coverage.

The best example of a conversion health insurance plan and one for which I am personally familiar is the plan offered by the Alberta Retired Teachers Association. (ARTA).

ARTA and the Canadian Snowbird

The Alberta Teachers Association, not unlike many unionized employees in Alberta and elsewhere successfully negotiated as part of their employee benefit package, a supplementary or extended health insurance plan for all their members. The Alberta School Employee Benefit Plan (ASEBP) was quite attractive and included extended health benefits such as dental, vision care and prescription medication and other related health and wellness benefits, life insurance and travel insurance. My wife was employed by the Medicine Hat School Division for over 25 years and our family enjoyed the benefits of ASEBP.

Following her retirement, she automatically became a member of the Alberta Retired Teachers Association (ARTA) and was given the opportunity to enroll in a “conversion health insurance plan” through ARTA and underwritten by the Cumis Insurance Company and administered by Allianz Insurance. As is the case with many retirees, we hoped to travel extensively and ultimately spend the winter months in the United States. As a result, continuing to have affordable travel insurance was vitally important to us. Under the conversion plan, as long as we maintained at least one part of the prior coverage offered by ASEBP, we continued to be eligible for annual multi-trip emergency or “out-of-country” travel insurance. Moreover, the most attractive feature of the ARTA coverage is that is a “guaranteed issued” policy. In other words, you are eligible for the coverage WITHOUT any requirement to complete a detailed medical questionnaire.

Does the ARTA “out-of-country” travel insurance have a “pre-existing condition” or “stability” clause or provision?

In a word, the answer is “NO”!

To be completely honest, I must profess my ignorance. Although my wife and I have been retired for several years and have traveled extensively throughout the world and more recently have spent the better part of the winter months in Palm Springs, California, it is only most recently, while researching for this article at the behest of a friend, that I became aware of the uniqueness of the travel insurance offered ARTA as compared to other forms of travel insurance available in the Canadian marketplace.

Under the Emergency Travel Insurance Policy (#FC310040) offered by Cumis Insurance Company and administered by Allianz Insurance Company, the named insured is covered, subject to certain lifetime dollar limit ($5 million) to all medical and hospital care expenses arising from any “sudden or unforeseen” injury, accident, illness or medical condition while outside the Province of Alberta. The operative words are “sudden and unforeseen” which raises the specter of whether or not a complication arising from a pre-existing condition would be covered. To that point, I posed the question to the Individual Account Administrator/Benefit Plan Coordinator-ARTA Retiree Benefits Plan by email on 17/08/2018 to which I received the following reply on the same date.

  “Your ARTA travel plan does not contain a stability clause; however everything is determined based on SUDDEN AND UNFORESEEN events i.e. if a condition is not stable when you leave, an emergency medical expense related to that condition will LIKELY NOT be covered. When departing on a trip there should be no expectation of any complications with any existing medical conditions. Claims are assessed at the time of the incident to determine if it’s “sudden and unforeseen”. To do this the travel provider (Allianz) will assess your medical records to deem if the incident was “sudden and unforeseen”.

I have concluded from this response and based on my own examination of the exact wording of the policy, that there is “no pre-existing condition” provision contained in the travel insurance policy and therefore no specified waiting period or stability clause relating thereto. As a result, it is reasonable to assume that if there was a “pre-existing condition” but your physician has offered the opinion that you were free to travel, then the policy would cover you, even if there was a complication arising from that pre-existing condition. It would be presumed based upon the doctor’s advice that the incident although perhaps related was nonetheless “sudden and unforeseen”. Here is further response based upon the foregoing observation and a companion email, which helps further clarify the issue.

         “Thank you for your inquiry. ARTA Emergency Travel coverage included with Total Health and Ultimate Health Coverage has neither a stability clause nor a pre-existing conditions clause. Instead it has a “sudden and unforeseen” qualification for sudden illness or injury. This means that if you are not having health issues leading up to your trip, you will likely be covered for any sudden illness or injury you may experience during your trip. However, if you are experiencing a change in your health state or health complications in the days leading up to your trip, which could be brought on by a new diagnosis, changes to your health state, new prescription, or even a change in your prescriptions, any health events you experience while you are travelling may not be considered to be sudden and unforeseen. If you do have a health event necessitating you stay home, the ARTA Emergency Travel coverage includes trip cancellation insurance which may reimburse you for the non-refundable costs you have paid for your trip. A physician note releasing you to travel is not a requirement under the ARTA Retiree Benefit plan but you may have one written for your own records.” 21/08/2018 [6]

AESBP/ARTA and it's Expanding Membership Base

 

AESBP and ARTA have worked together and have expanded its membership to offer employee benefits including supplemental or extended health care coverage and Emergency Travel Insurance not only to its core members-teachers and their dependents but many other groups who are related to or have a connection to the education field. This is referred to as “Education Sector Eligibility”.

More recently, AESBP and ARTA have attracted new members from the public and private sector and have established a new category of eligibility (“Public and Private Sector Eligibility”), many of which have no connection whatsoever to education. These include for example provincial government employees, United Nurses of Alberta, Servus Credit Union and the Chartered Accountants Association of Alberta, too name only a few and the list grows larger each year.

But more importantly, due to the “conversion insurance” aspect of the AESBP/ARTA plan, those retirees from these various employee groups have the same opportunity as retired teachers to convert all or any portion of their employee benefits to a retirement package. The ability to convert automatically to an ARTA health and wellness retirement plan including travel insurance without any qualification requirement is a tremendous advantage both to ARTA and its members. Why?  It is all about “risk”. By expanding its membership base exponentially by adding new categories of members each year, ARTA is spreading the risk within a larger employee pool,  thereby stabilizing or reducing the overall cost of these benefits. The reverse is true with respect to other smaller employee groups, who now can join a larger employee base and receive comprehensive employee benefits at a reasonable cost and at the same time, have the ability to convert some of the benefits to form part of a retirement package. From the growing list of Alberta public and private sector employers and professional organizations, it appears obvious that ARTA is purposely expanding its mandate to provide health and related retirement benefits to an expanding membership base. It is a win-win situation for both the employer and the employee!

“Knowledge is Power. Information is liberating”[7]

The word “enigma” is defined as “a person, thing or concept that is mysterious or difficult to understand”. This is an apt description of the “pre-existing condition” definition contained in most supplemental or extended health care insurance plans in Canada. The difficulty lies not only with the concept but also as a result of the multitude of variations of the definition employed by the various insurance companies that offer that product. When it comes to travel insurance, the matter becomes increasingly more difficult to comprehend as a result of the myriad of stability clauses related to that definition contained in the various product offerings available in the Canadian insurance industry.

Kofi Annan, the former secretary general of the United Nations is attributed to having made the following observation, “Knowledge is power. Information is liberating. Education is the premise of progress in every society, in every family”.

Hopefully by examining the issue of travel insurance and the “pre-existing condition” enigma, I have informed and enlightened my retirement “family” and others interested in this subject.

And that you like me, now feel somewhat liberated.

William J Anhorn Q.C. ICD.D

Medicine Hat, Alberta

August 21, 2018

                                Schedule A

To whom it may Concern;

Health and Medical Travel Authorization

I have been treating or have been consulted by Mr. Smith in regards to the following medical condition:

   (Give a brief description of medical issue or condition)

I am of the opinion that the condition is stable and under control and as such there is no limitation on his ability to travel to the United States or elsewhere, as I do not foresee or expect any further medical issue or complication relating to this treatment or condition. Nor I am aware of any other existing health or medical condition which would be of any concern in this regard.

Yours truly,

Dr. Robert Jones M.D.

 


[1] See, “Employee Benefits and Individual Health Insurance Plans”,  HealthQuotes.ca blog, January 26,2017

[2] See, “Travel Insurance: Are you Really Covered”, HealthQuotes.ca March 2018.  Visit the HealthQuotes.ca blog to find some interesting information on travel insurance and other health insurance related topics.

[3] The following tool provided by Healthquotes.ca on their website identifies various insurance providers and how they each define "stable" conditions. They do not list the stability periods for all of the plans they quote on their website but their quoting tool will display the exact stability periods for all available travel plans they represent.

[4] At the risk of boring the reader, I have included several examples of “pre-existing condition” provisions for an obvious reason. This demonstrates that all policies are not the same and that each insurance company has their own unique definition and that any prospective purchaser would be wise to enquire about the “pre-existing condition” definition and stability clause before making a commitment to purchase coverage.(Source: HealthQuotes.ca)

[5] Go to www.snowbirds.org or search Canadian Snowbirds Association or Medipac

[6] Attached as Schedule A, is a form letter which I have drafted with wording which might be useful. I offer, however, no opinion as to its reliability or effectiveness.

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[7] Kofi Annan was the seventh secretary general of the United Nations, who passed away at the age of 80 on August 18th, 2018, coincidentally while I was completing the first draft of this article.