Big Changes Coming to Out-of-Country Travel Health Insurance Coverage for Canadians

The province of Ontario, home to 40% of the population of Canada, is moving ahead with recently proposed plans to eliminate out-of-country health insurance coverage, which is currently provided under the provincial government's universal health care program called OHIP.

This will not change coverage of Ontario residents traveling to other provinces of Canada.

The new policy is set to take effect on Oct. 1, 2019, and it's getting a lot of media attention. Here is what every travel advisor in the country needs to know.

Why is this happening?
According to the Ontario government, 40,000 Ontarians traveling outside of Canada each year require health services while away. Currently, OHIP covers up to a maximum of $400 CDN per day, and the average covered is much less.

Health Minister Christine Elliott points out this is a small fraction of the healthcare fees sick travelers incur, especially considering that most of those claims are for travel to the U.S., where costs are among the highest in the world.  

It amounts to a government spend of $9 million a year. And, the government would rather save the money.

Richard Vanderlubbe, president of tripcentral.ca, based in Hamilton, Ontario, agrees overall with the government move. He said that since coverage was reduced to the $400 CDN daily cap, the cost of processing claims really exceeded the value of the coverage. (Years ago, OHIP covered the full equivalent amount that it would have paid for the same care in Ontario.) He also noted that Ontarians out of the country are putting sales tax revenues into the coffers of other jurisdictions, not Ontario's. As a taxpayer, it seems reasonable.

Will it impact travelers?
Ontario Health Minister Elliott was quick to say, “Over 90% (of out-of-country travelers) obtain private travel health insurance” already. 

And Dan Keon, vice president of market management at Allianz Global Assistance Canada, agrees with the minister's statement, saying, “Even before this change, the Canadian government was reminding Canadians to obtain private insurance before traveling.”

If anything, the change in policy has increased – or even triggered – Ontario consumers' awareness that they need to purchase travel health insurance when leaving the country.

“It’s a new angle,” says tripcentral.ca's Richard Vanderlubbe. “Certainly, we have been specifically mentioning that OHIP only covers up to $400 a day – and now we will say OHIP covers nothing.'

If this policy creates an elevated sense of risk and urgency among consumers, that's a good thing, according to Allianz's Dan Keon. “It's always been important for Canadians – regardless of province – to purchase travel medical insurance,” he said. “Any policy that increases consumer awareness of the need for travel health insurance is a good thing … it means more Canadians will travel protected.”

The new Ontario policy makes it easier for agents, in every province, to connect the dots for consumers and help them acquire the coverage they need. Travel agents not only help consumers book their dream vacations, they can help customers think about protecting their investment.

So … is there a down side?
Potentially, for consumers. Minus the small amount the Ontario government was covering, travel health insurance costs are likely to rise.

That is what's on the minds of the 110,000-member Canadian Snowbird Association, whose President Karen Huestis released a statement this week, estimating travel health insurance rate premium increases in Ontario of 7.5%.

The insurance industry isn't ruling it out. Allianz' Dan Keon says his company has “no immediate plans to address travel health insurance pricing,” but that they will be “monitoring claims” and when the bills start rolling in, rates may increase.

The Travel Health Insurance Association of Canada is more certain of the outcome of the new policy. In a letter this past week to the provincial government, Association President Brad Dance stated, “Travel insurance providers will undoubtedly need to increase the premiums that will be charged to Ontarians.'”

That organization is asking for a one-year delay for implementing the new rules, so insurers can determine how much rates will rise and make changes to policies, and also for the Ontario government to educate consumers about the change and the need to purchase private insurance.

The other downside is for Ontario consumers who are ineligible for standard private travel medical insurance – older snowbirds or people with pre-existing conditions. Under this policy, when out of country, they at least had some coverage from their government health insurance plan, but now they will have none at all. It leaves the options of either buying very expensive policies or of consumers taking the risk of having no coverage. 

Travel advisors in Ontario may be able to help their eligible clients save money this year by recommending annual policies, rather than single-trip, for people traveling more than once or twice a year, which will protect them from price increases for at least a few months after rate hikes.

The new policy in Ontario gives travel advisors across Canada the opportunity to really add value to their relationship with their clients, says Dan Keon with Allianz. It's an opportunity to reinforce the message that government “health insurance doesn't travel with you,” and ensure their customers not only book a wonderful trip, but that they're protected from medical expenses while they're abroad.