First published in ITIJ 109, February 2010
Asking travel insurance applicants to grade their own health status is often a risky business – for insurer as well as client. It assumes that the applicant knows his medical record as intimately as he knows his home address, or that that he is impervious to the temptation of fudging his responses to a medical questionnaire, knowing that a ‘yes’ to question 6a will boost his premium by 50 per cent. Yet with the expanding use of medical underwriting to justify sales of travel insurance to applicants in less than perfect health (that’s most of us), insurers have little option but to take clients at their word when they deny having been treated for a blood disorder, even though their medication for anaemia has been changed three times and they have visited their haematologist monthly over the past year.
As a travel insurance ombudsman for Canadian clients appealing claim denials, I have been assured countless times that because they felt fine, or their doctor ‘cleared’ them for travel, or they felt no recent upsurge in symptoms, applicants didn’t feel it necessary to tick off a ‘yes’ box asking about medication changes, or recent treatments, or referrals to specialists.
Recently, a lead story in ITIJ highlighted the plight of Jean Edwards, a British woman whose claim for emergency surgery while holidaying in Turkey was denied by her insurer because, according to the insurer, she failed to properly declare all of her illnesses on her medical application for insurance. In support of Mrs Edward’s family (she died shortly after being repatriated), Member of Parliament (MP) Jim Dobbin said he wants to see travel insurers change their ways and assume responsibility for disclosure, highlight the pitfalls of incomplete or inaccurate information, make sure they ask the right questions and confirm that clients understand the contract and the need for proper completion of application forms.
As admirable as that may sound, how do you make the insurer responsible for answers given voluntarily by applicants? Short of personally interviewing every applicant through what may be an extensive medical history, and prospectively investigating their doctors’ records to substantiate the accuracy of their answers, there is no way for the insurer to be certain of making a sound underwriting decision. Insurers have to take applicants’ answers on faith, until they know better, and too often that happens only after an emergency has occurred and an expensive claim has been activated and investigated.
A question of perspective
When Joe Snowbird (a pseudonym used to protect the patient’s privacy) was brought to a Florida hospital with laboured breathing and profound hypotension, he was admitted to intensive care, put on a ventilator and treated for a possible myocardial infarction (MI). In recording his medical history, staff noted two cardiac bypasses, nine angioplasties, ultra high blood lipids, diabetes, a history of transient ischemic attacks, prostate surgery and chronic kidney failure. The first question that comes to mind is how did he get insurance in the first place?
Joe’s medical application showed he had checked off chest pain, heart attack, arteriosclerosis, congestive heart failure and bypass surgery and he was advised that all of these pre-existing conditions would be excluded for coverage. But according to claims examiners, what he neglected to report was that he also had a medical record significant for mini strokes (TIAs), Type Two diabetes, hypertension, abnormally high lipids and chronic renal failure – none of which he ticked off on his medical questionnaire.
Insurers have to take applicants’ answers on faith, until they know better, and too often that happens only after an emergency has occurred
When I spoke to Joe in assessing his appeal, he asserted that his hospitalisation was due to respiratory failure, not to MI (contrary to the doctor’s discharge diagnosis), and that many of the attending doctors’ observations and notes were simply wrong. When I asked him why he hadn’t checked off that he had been treated for TIAs, hypertension, diabetes, renal failure, high lipids, he said in retrospect he probably should have, but since these conditions were ‘under control’ he didn’t think it necessary to report them on the questionnaire. He said further that the conditions he omitted were, in his estimation, ‘immaterial’, and were not the cause of his hospital admission.
That they were unrelated to his hospitalisation may be true. But that’s not why his claim was denied. His policy was nullified because the medical information he gave the insurer mislead medical underwriters about the risk they agreed to undertake. As the underwriter in this case noted: “There is certainly material misrepresentation here, so much so that we would not have offered him coverage of any kind.”
A Canadian visitor to the US presented to the emergency department of an American hospital complaining of shortness of breath and burning sensation in the chest. After he was stabilised, he was admitted with a principal diagnosis of congestive heart failure and secondary diagnoses of mitral regurgitation, aortic stenosis, suspected pneumonia, high blood pressure, hypertensive renal disease and gout. The medical history also showed a recent heart pacemaker implant and chronic anticoagulant therapy for atrial fibrillation.
In examining his claim, the insurer found that the patient had failed to disclose a history of mitral valve disease, several surgeries including gall bladder and appendix removal, breast surgery, hernia repair, removal of part of his colon, surgery for hemorrhoids, cancer, several leg and ankle fractures and GERD. He admitted to having been in the operating room 13 times, none of which were cited on his application. The insurer denied his claim.
In his appeal, the patient stated that if the insurer required a listing of all past illnesses it should have asked for all his medical records and made the risk assessment itself. And when I spoke to the patient’s son, he too said that it was impractical to expect anyone, especially an elderly man, to go back over his entire medical history and every occasion on which he saw a physician.
If that were the expectation it would be impractical. But that’s not what the applicant was asked or expected to do. His task was far less onerous. He was asked if in the past 12 months he had been treated for … (any of the following conditions), or in the past five years he had received prescribed medication for … (any of the following). The questions were constructed to elicit ‘yes’ or ‘no’ answers, not free flowing essays. He also was not asked to list those conditions he thought relevant or to make medical judgments about their importance. He was asked if he had ‘ever’ been treated for or been hospitalised for certain specific conditions … no personal judgments, just ‘yes’ or ‘no’ to questions asking for ‘yes’ or ‘no’.
The following is one segment of a multipage Manulife Financial travel insurance application. (The previous cases cited did not involve Manulife clients).
In the last five years, have you been diagnosed with and/or had treatment and/or been hospitalised (as an in-patient or seen in the emergency department) and/or been prescribed or taken medication for any of the following?
• Heart condition Yes No
• Stroke/CVA (cerebrovascular accident) or mini-stroke/TIA (transient ischemic attack)
(including use of aspirin/Entrophen for this condition) Yes No
• Aneurysm Yes No
• Peripheral vascular disease (blocked or narrowed arteries) Yes No
• Diabetes (if treated with medication and/or insulin) Yes No
• Lung condition (medication includes any puffer(s)/inhaler(s) except a single
unrepeated prescription used for a single episode) Yes No
• Cirrhosis of the liver Yes No
• Alzheimer’s disease, or any other form of dementia, or Parkinson’s disease Yes No
The legal aspect
Contrary to the assertion made by British MP Jim Dobbin that insurers must carry the burden of eliciting complete and accurate answers to their own medical questionnaires, Toronto-based attorney Gilbert Sharpe, a specialist in medical/legal issues and former director of the legal branch of the Ontario Ministry of Health and Long Term Care, argues that the responsibility for providing accurate information on an application for insurance clearly rests with the client, even though the client may have been unaware of certain diagnoses, or his physicians didn’t tell him everything, or he didn’t understand his doctor’s diagnosis.
Gilbert Sharpe … argues that the responsibility for providing accurate information on an application for insurance clearly rests with the client
“This is one area where the law does support the insurance company in a very strong way,” says Mr Sharpe. Most policies, he adds, tell applicants that if they are not sure about their answers to medical questions, they should consult their physicians. He emphasises that the insurer is entitled to rely on the statements in the policies for accuracy and truthfulness.
I have often heard of doctors not telling their patients, particularly elderly ones, of a heart murmur or other condition they thought relatively benign because they didn’t want to disturb their patient needlessly or ruin their vacation over something they probably wouldn’t treat aggressively anyway. It’s too bad that in such cases these doctors don’t know more about how supplementary travel insurance works. By keeping that information from their patients, they put them at risk for a claim denial. Increasingly, insurers are becoming sensitive to this need for informed consent and are urging their clients to consider their answers and seek help from their doctors if need be.
For example, medical applications used by RBC travel insurance are prefaced by the warning: “Take your time. The questionnaire may take up to 10 minutes to complete. Read each question carefully and provide truthful and correct answers to each question. Incorrect answers may lead to cancellation of your coverage.”
ETFS appends the following declaration, signed by the applicant, to its questionnaire: “I fully understand that if any of my answers are inaccurate, in the event of a claim, the insurer will void my policy and my claim will be refused. I understand that the answers to my medical questionnaire are relevant to the risk and constitute the basis of my insurance. Where I was unsure of my medical history as it relates to the medical questions, I have verified it with my physician.”
Medical applications provided by Co-operators Life Insurance require the applicant to sign and date a declaration upon completing their application that says: “I hereby declare that the information provided is truthful, complete and accurate. I understand that this application constitutes part of the contract provided by Co-operators Life Insurance Company. I acknowledge that any misrepresentations and non disclosure of my medical status will result in non-payment of my claim and render my coverage null and void resulting in the refund of my premium.”
Medical applications provided by Manulife Financial preface their long list of questions by the advisory: “If you are uncertain of your answers to any of the medical questions, please consult your doctor before completing this application for travel insurance.”
It is true, however, that some medical questionnaires are ambiguous or obscurely worded, and in those cases the client is justified in challenging a denial. And I have recommended so. For example: is monitoring hypertension ‘treatment’? Does removal of a benign rectal polyp during a routine colonoscopy qualify as non-disclosure of a bowel problem in a non-symptomatic woman? What is a bowel problem anyway? Does it cover occasional or even frequent diarrhoea or constipation, and don’t many people of all ages deal with this as a fact of life on a day-to-day basis? When does postprandial belching morph into GERD? When does slow or frequent urination (which afflicts about half of the world’s men over 60) lapse into prostate or urinary disorder? Is angina controlled by medication reason to check ‘yes’ to heart disease? Is pre-diabetic monitoring of high blood sugar, controlled by diet and exercise, reason to check off a history of diabetes treatment? And if ticking off ‘yes’ to that question about diabetes bumps the premium for a 75-year old person from $847 for 60 days up to $1999.00, might it not give the respondent some pause for thought?
Can insurers’ questions be more clearly or more simply phrased? In many cases, yes. But in reality, it is virtually impossible to encompass every pathological condition known to man in one medical questionnaire that can be completed by an applicant at his kitchen table, or sitting before his computer, or being interviewed over a phone.
if ticking off ‘yes’ to that question about diabetes bumps the premium for a 75-year old person from $847 for 60 days up to $1999.00, might it not give the respondent some pause for thought?
In most American travel insurance policies, where medical benefits are far less bountiful than the multi-million dollar Canadian ones, medical underwriting is less common. Most American travel policies provide medical benefits according to age and pre-existing conditions limitations. Often, no medical questions are asked. As a client, you take it or leave it. The process is simpler, but there is less opportunity for insurers to assess for individual risk. The exception is for dedicated medical insurance policies, which have higher coverage limits and which do require some medical screening. But Americans are not avid buyers of such policies. Most travel policies sold in the US are heavy on trip cancellation/interruption, baggage loss, or emergency evacuation – less so on covering medical costs in foreign countries (the expectation being that an individual’s private or employer-based health insurance will be the primary payer of at least some part of those bills).
In Canada, there is no such expectation because private insurers are forbidden by law from covering basic health services and it is well known by travellers that the provincial government plans provide only token payments for out-of-country health services – in some cases less than 10 per cent of foreign hospital bills. Thus, private travel insurance plan medical benefits often run to $5 million per occurrence and the differential is totally the liability of the private travel insurer. There is no other private or employer health insurance picking up the slack. There are policies in Canada that provide only basic, no frills, no pre-existing conditions coverage. But to ignore all but the perfectly healthy would be to shred a huge market. And the only way to carve out a niche in that market is to offer forms of medical underwriting – either by simple screening of a dozen health questions, or more specific questionnaires zeroing in on detailed medical histories.
Ironically, as refinements in medical underwriting are seen as a means of proffering more coverage opportunities for travellers in less than perfect health in Canada and Europe, politicians in the US are intent on scuttling medical underwriting totally in their conviction that such a practice discriminates against those in poor health, those who need health coverage most. Both health reform bills now in Congress – in the House and in the Senate – would ban insurers from denying coverage for pre-existing conditions, thereby scuttling the use of medical underwriting. Though this would apply only to domestic insurance (for now), the fact that domestic insurance is the primary payer for virtually all supplemental travel insurance plans could be expected to impact how travel insurers price medical products in future.
It still seems that one person’s champagne is another’s rat poison.