Given the current global circumstances, Canadians are reassessing their travel needs and the accompanying health insurance coverage they require. Recent data indicates a significant hike in medical travel insurance premiums, around 8 per cent on average, rising by as much as 12 per cent with selected providers. This is according to Dan Donnelly, head of Travel Insurance Office Inc., based in Markham, Ontario. The uptick is attributed primarily to the escalating hospital charges in the United States.
If vacationing individuals choose to avoid the US, they could potentially leverage favored premium rates, though those continuing southwards should review credit card benefits and insurance schemes which offer greater safeguards around delays and disruptions to travelling. Regardless of whether vacationers are staying put or aiming further away, understanding travel insurance dynamics is vital. Current politics globally can significantly impact travel insurance rates.
A combination of the ongoing trade war, a harsh exchange rate, and stricter policies for tourists has discouraged many Canadian citizens from temporarily relocating southwards. A recent poll by the Travel Health Insurance Association of Canada noted that despite 61 per cent of Canadians intending to travel throughout this year, a massive 70 per cent have expressed unlikely chances of visiting the US.
Travel insurance rates for individuals who choose destinations outside of the US are generally lower, stated Martin Firestone from Travel Secure, who specialize in travel insurance. This reduction is because US healthcare costs have a prominent role in deciding the premium rates. A brief hospital stay of three days could attract bills amounting to around US$ 175,000, a rather daunting figure.
Expensive US medical costs are reflected in the insurance premiums with a difference in insurance costs depending upon the inclusion of the US in the travel plan. For instance, a 66-year-old paying around $281 for global coverage would see this reduced to approximately $259 if their travel excludes the US; these figures jump to $417 and $371 respectively for individuals aged 71. American healthcare expenses rose 7.5 per cent in 2023, reaching a total of nearly US$ 4.9 trillion, equivalent to US$ 14,570 per person, unveiled by the American Medical Association.
Given the rising healthcare costs in the US, travelers planning to visit might need to consider higher insurance coverage. The previous common coverage of two million might not suffice anymore, mentioned Mr. Donnelly, recollecting claims that shot up to $2.4 million. Other insurance providers have concurred that a $2 million coverage is barely adequate nowadays, yet anything less may not cover potential medical bills in the States.
Regarding insurance benefits that are part of credit card services, they usually suffice for Canadians below the age of 65 who do not have severe health conditions. However, given the chance of unexpected disruptions in travel due to geopolitical tensions, it may be prudent to consider credit cards offering comprehensive coverage for trip delays and cancellations. Natasha Macmillan, the head of everyday banking at Ratehub, an online financial marketplace, suggests the same.
As an example, Sunwing flights from Halifax to Florida were canceled last minute due to insufficient passenger capacity as per court documents. Cards like the Scotiabank Passport Visa Infinite and National Bank World Elite Mastercard are popular for their extensive travel insurance coverage, Macmillan pointed out. Although these cards have associated fees, they encompass coverage beyond medical expenses, including delays, cancellations, personal accidents, lost luggage, and issues with rental cars.
In terms of workplace health insurance for travel, it will suffice for the average traveler, according to Mr. Donnelly. However, it’s advisable to go through the specifics, particularly if you have health-related issues or if you’re planning on involving in high-risk activities. Certain travel insurances exclude coverage for injuries sustained while intoxicated or during any high-risk activity.
Political instability can indeed affect one’s travel insurance coverage. Both individual and credit-card linked insurance packages might offer some degree of cancellation protection if a travel advisory of Level 3 is declared by Canada for a destined location. However, Mr. Firestone notes that coverage through credit cards may cap reimbursements to a specified amount, such as $5,000, and more customized coverage is possible through an individual policy.
The importance of travel insurance is equally relevant for those planning to stay within Canada. Excluding a few exceptions, most medical expenses are typically covered by provincial insurance schemes like OHIP in Ontario. For instance, costs incurred for an ambulance during a major accident while in Alberta would fall on you, as stated by Mr. Donnelly. The expenses can rise significantly if airlifting is required, for instance during a camping trip.
Provincial insurers usually do not extend coverage for medicines purchased in another province. If you happen to lose all your medication while travelling internally, the costs for replacing them would come out of your pocket. This reinforces the importance of having appropriate travel insurance even for intranational travel.
As for pricing, a 100-day-long travel insurance plan for a healthy 73-year-old costs roughly $1,200. The same coverage for a healthy 67-year-old comes in at approximately $850. However, if the insured has any serious health conditions, these rates can more than double. Moreover, the cost of travel insurance can fluctuate depending on your chosen activities and the duration of your trip.
Frequent travelers can save on insurance costs through multitrip annual plans, which allow multiple trips within a year, each covered up to 35 days, for instance. Another cost-saving strategy involves short return trips to Canada between lengthier international journeys, enabling a reset on certain policies. A brief stay in Canada, even an hour, can make a significant difference with some providers, according to Mr. Firestone. Increasing your deductible can also lead to potential savings of up to 15 percent on premiums.