Retired couple billed $50,000 despite travel insurance

A B.C. couple on a fixed income is facing a $50,000 US hospital bill, despite buying travel health insurance for their last trip.

"What are we supposed to do?" said Artur Friesen, from Abbotsford, B.C. "We don't have anything. How am I supposed to pay that?"

Artur and Anna Friesen say they live modestly on government pensions. Every year for the last 20 years, they've driven their motor home to California to escape the winter.

"We buy insurance to be covered and be safe," said Artur.

Last year, they bought full medical coverage as usual, through their broker, from Prime Link Travel Medical Insurance. While in California, Anna had to go to hospital with a blood clot in her leg.

Records show the U.S. hospital checked with Prime Link, which is underwritten by Manulife, to see if she had insurance, and was told she did. Her bill for treatment was $10,000 a day, for five days.

The couple said they were shocked when the insurance company later refused to pay the bill, because of how Anna answered one question on her initial application form.

"I never would have gone into the hospital if I knew that would happen. Never. I would have went home," she says.

Answer not quite right

The Friesens struggle to understand English, so said they relied on broker Barrie Cartmell to fill out their application. He read them several questions from the form, including: "In the last 36 months, have you received treatment for kidney disorder (including stones)?"

Anna answered no. She's had weak kidneys for several years, but has not actively been treated. 

"I had no treatment and I just had weak kidneys, and that is what we talked about [with the broker]," said Anna. "I am not reading [the form] or anything, because I don't know how to read English.

"[The broker] was satisfied with the answer that we gave him, that she had no treatment and no [kidney] stones," said Artur.

Despite letters submitted since from doctors, insisting she is not receiving any treatment for her kidney condition, the insurance claim denial letter reads, "You do have a chronic kidney disease for which you have undergone investigations which is considered treatment."

Prime Link returned the $694 premium the couple paid for the policy, with a letter saying it's null and void because of "misstatements during the application period."

The Friesens are now getting calls from a U.S. collection agency and are afraid to go south for their usual trip. They check the mail every day, hoping the insurance company has considered their appeal and changed its position.

"I don't even lift up the phone anymore. I see it's a number from outside, I don't even lift up the phone anymore," said Anna. "Because [the collection agent] told me last time I am supposed to pay him $5,000 a month."

"We are stressed out. Really stressed," said Artur.

Afraid to go south

"We are not the same people [as we were] last year when we came home. Our friends they are leaving on Friday for California for four months again, and we have to stay home."

The broker, Barrie Cartmell, said he doesn't remember Anna mentioning her weak kidneys. Nevertheless, he said he believes she answered the question honestly and the insurance company is wrong.

"I don't think it is the client's fault. They just didn't understand," said Cartmell. "I think [the insurance company] has got to clean up their definitions and make them a lot clearer."

He insisted if Anna did tell him about her kidney condition, he would have advised her to consider a different answer. 

"I can't remember the exact conversation because I've got thousands of clients," said Cartmell. "When I go through the application, I ask the questions as they are."

He said he tried to go to bat for her with the claims department, but got nowhere.

"They do not discuss this. They will not discuss it," said Cartmell.

"Certainly if I was asked that question I would think that the word treat means exactly what it says, treatment, and I would say no," said Jim Bullock, an independent broker who helps lawyers who are going after insurance companies.

"The fact I was being monitored, in my mind, wouldn't mean I was being treated."

Deliberate tactic, says critic

Bullock says the forms are ambiguous, and he thinks that is intentional.

"I've come to the conclusion that it's a deliberate tactic," he said, citing several examples of what he calls "trivial" denials.

"A lady didn't disclose that she had an ear infection four years ago. Another lady didn't disclose that she had hemorrhoids during her pregnancy two years ago. A fellow didn't disclose that his brother had a heart attack. He didn't know his brother had a heart attack. That didn't matter. He didn't disclose it," said Bullock.

He would like to see provincial authorities hold insurance companies more accountable.

"For whatever reason, they have steadfastly refused to get involved with the issue of claims-paying practices. They won't even ask the companies in their annual reports how many claims were not paid," said Bullock.

"Frankly, I think governments are afraid of insurance companies. It appears that way."

David Hartman, of the Travel Health Insurance Industry Association of Canada, confirmed the industry doesn't release statistics on how many claims are denied, although he estimated it's less than five per cent.

"Not disclosing medical information is one of the top five reasons claims are denied," he said.

He also said the industry is working on making travel insurance questionnaires simpler.

"It is a concern," Hartman said, "Some companies are looking at plain language policies."

He said seniors should realize insurers can and will look at all medical records, so it's best to disclose everything, even if it costs more for coverage. He said some medical conditions trigger premium increases of 300%.

New decision coming

David Rivelis of Prime Link, the Friesens' insurance agent, said even when a customer's doctor states they are not being treated for a condition, the adjuster's interpretation can supersede that.

"The insurance company ultimately determines the term of the contract," said Rivelis. "How the doctor defines something may be different from how it's defined by an insurance company."

He advises every senior to read their whole policy, even when they are using a broker.

"Policy definitions are what governs the payment of claims," he says.

However, after CBC's Go Public got involved, Manulife, the underwriter, said another decision is forthcoming on the Friesens' claim.

"I understand a decision on the appeal of this case will be made shortly and should be communicated to the individual in the next couple of days," wrote Manulife spokesperson Michael May.