The good news for Snowbirds is that the drive to Florida is going to be a lot cheaper this year.
Year-over-year, the cost of a fill up is down 10 per cent. It cost $1.11 a litre at a discount station last week, while a year ago we were paying $1.25 a litre. The savings could be more if the price of gasoline continues to fall. American prices are even better because they pay less fuel tax.
Even more good news if you’re one of the 500,000 Canadians who own a winter home in Florida. The value in Canadian funds is up at least 11 per cent this year as our dollar has drifted down from 96 cents (U.S.) last November to U.S. 87 cents (U.S.) this week. Add in more gains from the Sunbelt housing recovery and things are looking up.
Less welcome is that the cost of Snowbird insurance is on the rise because of the same forces. Insurers pay your claim in U.S. funds. American healthcare costs, like ours, are rising at a steady clip, about 6 per cent year-over-year, says Alex Bitner, president of the Travel Health Insurance Association of Canada (THIA), an industry group. So expect to pay on average 10 to 12 per cent more than a year ago, he says.
“When you factor in medical inflation and the currency hit, premiums have to go up,” Bitner says.
People don’t like to pay more for most things and insurance is one they particularly dislike. So the temptation to cut corners is strong; forgetting things on the application or ‘misunderstanding’ questions. Insurers offer online tools that make it easy to apply and to fiddle the results. Before submitting the form you can go back to change things that alter the price.
A survey done for the THIA this year found that 14 per cent of people applying for insurance falsify the application. Half did so to get a cheaper rate. The biggest way they do that is to misrepresent their medical condition. They ‘overlook’ a pre-existing heart, or respiratory condition, or justify a loose interpretation of a question.
“Lying is a strong word,” Bitner says. “Let’s say they’re intentionally making a mistake.”
The risk is that you need the insurance and the claim is rejected, although Bitner says insurers reject less than 5 per cent of claims each year. Given that the THIA study also found that for many a $1,000-to-$5,000 out-of-pocket medical expense represents a financial crisis, lying is a high risk decision. A few thousand dollars is unlikely to make a dent in the cost of a U.S. hospital stay.
According to the non-profit U.S. Agency for Healthcare Research and Quality (AHRQ), the most common hospital stays are for surgery and injury. These are also the costliest, averaging $22,500 (U.S.) and $15,100 (U.S.), respectively per visit.
Investment writer and Star columnist Gordon Pape, wrote an article recently in which he described how expensive U.S. medical care can be. Some years ago, his late wife became ill in Florida and needed hospital treatment. He noted that the facility was more like a luxury hotel, the staff were attentive and highly competent. It also cost $40,000 and was luckily covered by insurance.
Theresa Monsma, a senior marketing executive with Desjardins Insurance, says their research finds that people find the application intimidating. They’re worried about getting it wrong and want coverage for a longer time without reapplying. So, Desjardins has just launched what it says is a Canadian first , a four-year travel insurance plan called Quattra aimed at Snowbirds aged 61 to 80.
You apply once during that period and the basic cost remains the same, although it may be adjusted for inflation and currency changes. You’re even okay if your condition changes. For example, if you have a heart attack in year two, the policy remains in effect as long as your condition is stable for six months.
“You don’t even have to tell us you had a heart attack,” Monsma says.
Quattra is a premium plan because it offers longer protection and as with all types of insurance, it pays to shop around. Go to the insurers directly or try a comparison site like Kanetix, or a group like CARP. The preferred plan of the Canadian Snowbird Association is a Manulife product called Medipac.
Bitner advises that people go to their doctor or financial advisor if need be for help getting the paperwork right.
“Because of the consequences, don’t guess,” he says. “Call the insurer and ask. Ten times if you have to. Look at the fine print. Snowbirds tend to look at the price, rather than look at whether the policy is any good. It should be the other way round.
That’s good advice.