It’s the sort of story that gives the insurance industry a black eye – a young mother denied coverage and left on the hook for a $1 million hospital bill.
And what is contributing to the problem is online applications, says one insurance advisor.
"More and more people using online applications creates a big part of the issue," veteran life insurance advisor Daniel Botha told
Insurance Business. "An online application should have a warning asking applicants to talk to an informed advisor to confirm how the coverage works. I think people should not be allowed to complete and sign off on online application without the assistance of an informed advisor."
Jennifer Huculak-Kimmel of Saskatchewan was on a family holiday in Hawaii when her water broke nine weeks early and only two days into the vacation.
“My water broke two days into our holiday,” Huculak-Kimmel told
CBC News. “I spent six weeks on bed rest and then baby Reece was delivered by emergency C-section on December 10;” for a total of just over two months of hospital care for the young mother and baby daughter Reece.
The family was presented with a hospital bill for almost $1 million US, but were confident that their insurance would cover it.
It didn’t.
In a letter to the family, a Blue Cross worker wrote, “We are unable to provide coverage for any medical expenses incurred for Ms. Huculak's baby” and “please note that Ms. Huculak's travel policy expired on Nov. 9, 2013.”
Travel Health Insurance Association of Canada's Vice President Will McAleer says situations like Huculak’s can be a good reminder for Canadians to take it upon themselves to ask informed questions about their coverage.
Huculak-Kimmel told
CBC that Blue Cross said that because she had a bladder infection at four months and hemorrhaged because of that, that they would not cover the pregnancy.
“We thought we had done everything right,” she told reporters. “We thought we had covered all avenues and we thought we were covered. We thought we were safe to go.” (continued.)
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Although Huculak-Kimmel said she had tried everything possible to get back to Canada, medical advice was that she should not travel – even by air ambulance with a surgical team on board.
It was a December 6, 2013 Marketplace episode ‘You’re not covered’ that featured one B.C. couple in a similar situation, who were rejected on a
Manulife claim, when the husband suffered a heart attack and required extensive surgery while travelling abroad.
Instead of having those hospitalization costs covered under their $340 policy, they were left with a $340,000 hospital bill (later reduced to $160,000) when Manulife discovered that the man should have answered ‘yes’ to two questions in the online questionnaire, rendering the policy null and void.
The B.C. couple told
Marketplace that “there is something wrong with the industry” when people plan a trip and think they have all their ‘T’s crossed and ‘I’s dotted and they come home to financial ruin.
According to a recent Insurance Business poll, brokers were split evenly on the need to create simplified forms for consumers to avoid situations like this, and for mandatory broker explanations to be included to ensure clients were completely aware of their coverage limitations and exclusions.
Huculak-Kimmel said she met with her own doctor, and Blue Cross, before the trip, and is currently trying to figure out what to do about paying the bill.
