Pros and cons -- when should you use your McMaster coverage as a deductible? updated Sep 2021

October 06, 2011 12:40 AM | Anonymous

Should you use your $10K coverage to reduce the premium when purchasing additional private insurance? As reported in the Summer 2011 newsletter, the $10,000 retiree out-of-province/country emergency medical coverage can be used as first payor on a claim. Thus, when purchasing additional private insurance with a deductible, you can use the $10,000, or whatever portion of it you have remaining under the McMaster plan, to coordinate with the private insurance.

This means you can use your McMaster benefit to cover the deductible on any private insurance plan that offers that option. The higher the deductible, the less expensive the premium will be.

HR strongly recommends retirees purchase additional coverage appropriate for the location to which they will be travelling. MURA Council endorses this advice.

If you are purchasing additional individual travel insurance using your McMaster coverage as a deductible, be sure to contact
Allianz Global Assistance if you have an out-of-province medical emergency to ensure your claim is properly coordinated. Allianz Global Assistance contact information is on the printable Travel Card in the Retiree Out of Province Coverage Summary document on the HR web site.

Be sure you know how much of your $10,000 benefit you have remaining. If you have never made a claim since retiring, you’ll have the full $10,000. But the McMaster benefit has a lifetime maximum of $10,000. For example, if you’ve already had a claim for $3,000, you’ll only have $7,000 remaining. The current amount of your benefit can be obtained from Sun Life at 1-800-361-6212.

Some companies offer a deductible, some don’t. Those that MURA is currently aware of range from 0 to 50% reduction in rates for a $10,000 deductible, and premiums vary greatly from company to company, by age, and by health status, so you’ll want to shop around.

But should you use your McMaster coverage to reduce your premium when purchasing additional private insurance, or not?

There are no hard and fast rules to follow when making this decision, but here are some things to think about that may help you decide.

  • If you use your retiree coverage to reduce your private insurance premium and then make a claim on the private insurance, your McMaster coverage will be the first payor on your claim. The amount of McMaster coverage remaining for the rest of your life will be reduced by that claim, up to the full $10,000.
  • You don’t have to use all, or any, of your McMaster coverage toward premium reduction when purchasing private insurance. It’s your choice.
  • You may not want to risk losing your McMaster coverage if the private insurance premium is low. Balance risk against benefit. If, for example the insurance premium is $100.00, is it worth using your $10,000 McMaster coverage as a deductible to obtain a 50% reduction, while risking the loss of up to $10,000 if you have a claim? But what if the insurance premium is $3500.00?
  • Since the McMaster coverage is very inclusive (i.e. it covers all pre-existing medical conditions), whereas most private insurers will deny coverage or charge very high rates if you have certain medical conditions, you might want to save your McMaster coverage for your later years when you are likely to have more difficulty in getting insured.

Originally published as Update On $10,000 Out-Of-Province Emergency Medical Coverage, Fall 2011

Updated September 2021

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