Ontario’s provincial health insurance plan OHIP no longer covers out-of-country medical services, highlighting a need for Ontarians to purchase travel insurance privately.

As of Jan. 1, 2020, the province scrapped all coverage for out-of-country services except dialysis. The province had previously covered foreign in-patient services up to $400 per day for a higher level of care and $50 a day for emergency outpatient and doctor services.

Having a medical emergency in a foreign country is a stressful event, psychologically but also financially. Prior to Ontario canceling out-of-country medical coverage, OHIP’s reimbursement for medical costs was a drop in the bucket compared to what a medical event could cost. For example, having a heart attack in the U.S. could cost a traveler hundreds of thousands of dollars and OHIP would cover only a fraction of that.

Ontario’s decision to nix out-of-country health insurance has sparked a debate, particularly among so-called Snowbirds, Canadians who spend winter months in warmer climates. But the province’s decision isn’t necessarily detrimental to Ontarians. In fact it could result in better-insured travelers.

As Ontarians come to realize the province won’t be responsible for medical costs outside of the country it could influence their decision to purchase travel insurance. And the more they buy travel insurance, the more impact it will have not only on travel insurance prices but on travelers’ level of coverage for health-related costs and other misfortunes that can occur while traveling.

Impact on travel insurance premiums:

Prior to the Ontario government canceling out-of-country health insurance, most travel insurance buyers were high-risk policyholders, either traveling to participate in risky sports such as rock climbing and skiing or they had a pre-existing medical issue. As a result premiums were higher because claims costs were higher.

Now that the province no longer covers out-of-country medical services, Ontarians might be encouraged to buy travel insurance thus increasing the pool of lower-risk policyholders and spreading the risk.

If Ontarians — Canada’s largest population — will increase their travel insurance purchasing, risk will be wider spread, injecting more premiums into the pool, which would reduce travel insurance prices.

The impact on premiums could therefor be positive for Ontarians. Not only will they likely be buying travel insurance at lower prices, they will have better insurance coverage and peace of mind.

What else does travel insurance cover?

Depending on the policy a traveler chooses, it can also cover personal effects, which generally aren’t covered by homeowners insurance when a policyholder is away from his or her home. When covered by a travel insurance policy, if a traveler’s suitcase and personal belongings are lost or stolen, they can recover financially from that loss.

And being stranded in a foreign country without a return ticket is not beyond imagination.

Consider last year’s high-profile bankruptcy of well-known British travel company and airline Thomas Cook. The sudden shut-down of the company last September left about 600,000 travelers stranded across Europe and Africa.

Certain travel insurance policies ensure that in extreme cases, such as with Thomas Cook, and benign ones as well, when flights are cancelled or delayed and extended accommodation is needed, travelers have an insurance policy that will get them to their final destination without financial fallout.

CHES Special Risk’s travel insurance products will provide peace of mind and relieve the stress that can arise from unexpected travel misfortunes such as medical emergencies, non-refundable transportation or travel arrangement needs, travel delay expenses and/or baggage loss, damage and delay.

For emergencies outside your province of residence, CHES Special Risk’s medical benefits include in-hospital care, medical services by a physician or surgeon, diagnostics, prescription medication, emergency dental, private duty nursing and repatriation. Unless otherwise stated, the policy pays reasonable and customary expenses up to CAD $5,000,000.

Whatever the purpose of your travel, our advisors will source bespoke coverage that is best suited for your travel needs.

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