In December 2014 Mei and her partner travelled to Hawaii to attend a wedding.
On 13 December 2014 Mei began to suffer stomach pain and on 14 December 2014 Mei’s partner took her to hospital. Mei was diagnosed with a 4.5cm pancreatic cyst. The hospital provided Mei with pain relief and she returned to New Zealand after 3 days in hospital.
The cost of Mei’s hospital treatment in Hawaii was $20,840.76 NZD.
In June 2015, Mei underwent surgery in New Zealand to remove the pancreatic cyst.
Mei’s insurance company declined her claim for the cost of her hospital treatment in Hawaii because it considered these costs arose from a pre-existing medical condition. Mei did not accept the insurance company’s decision and the matter was referred to FSCL.
Mei’s medical history
Mei had surgery in China in 2006 to remove a bile duct cyst.
In 2009, while Mei was studying in Australia, she experienced adnominal pain. A scan showed that she had a pancreatic cyst. However, the doctors told her that the pain she was experiencing was due to stress and not caused by the cyst.
Mei said before she travelled to Hawaii she called the insurance company to ask what a pre-existing medical condition was. Mei said she was told it was anything that she had received medical treatment for, or been hospitalised for in the past 6 months. Mei said she told the travel insurance company about her surgery in 2006 and was told “that was fine”.
Mei said she did not disclose the pancreatic cyst because she had not been hospitalised or received treatment for the cyst in the last 6 months. Further, Mei said she had forgotten about the cyst as 6 years had passed since she found out about it and no issues had arisen from the cyst in that time.
The recording of Mei’s telephone conversation where she asked the insurance company about its definition of a pre-existing medical condition could not be located. The insurance company said all telephone calls are recorded. However, Mei could not provide the telephone number she called from which meant the insurance company was unable to trace the call.
Definition of a pre-existing medical condition
The pre-existing medical condition in Mei’s policy is defined as:
“A pre-existing medical conditional is a sickness, injury or condition:
a) which has occurred within the last six months, or
b) which a person, in the six months before travel, has been aware of, or
c) for which a person has sought or been given treatment, medication or medical attention.”
The condition which caused Mei pain in Hawaii and the subsequent hospital treatment was the pancreatic cyst. While the cyst did not develop in the six months prior to travel and Mei had never received treatment for the pancreatic cyst, she had known since 2009 that she had a pancreatic cyst.
This meant that under the insurance company’s policy wording, Mei’s pancreatic cyst was a pre-existing medical condition as it was a condition she was aware of in the six months before travel.
Disclosure of cyst
We could understand why Mei would not have thought to disclose the pancreatic cyst as it had not caused her any issues. However, we found Mei would have been aware of a risk, albeit a small risk, that there could be a problem with the cyst based on her past medical history. In our view it would be unfair to say that the insurance company needs to shoulder that risk and provide cover for Mei’s claim when it was never put on notice that she presented such a risk. Knowing of the condition, Mei had the option of disclosing the cyst but did not do so.
If Mei had disclosed the pancreatic cyst it is likely that the insurance company would have:
a) confirmed it was excluding cover for any medical issues related to the pancreas, or
b) asked Mei to pay an additional premium so that it could confirm cover for any issues that may arise related to the pancreas.
If the insurance company had excluded cover for any medical issues to do with the pancreas, Mei would have found herself in the same position. However, she may have had the option of seeking cover elsewhere. If the insurance company had asked Mei to pay an additional premium so that it could confirm cover for any issues relating to the pancreas, Mei may well have taken this option.
We found that the insurance company was entitled to exclude Mei’s claim under the pre-existing medical condition exclusion clause contained in the policy.
An insurance company’s definition of a pre-existing medical condition will often be widely worded. It is important to read and understand your insurance policy. This includes reading the policy’s exclusion clauses and the definition section.
If you are not sure whether something is a pre-existing medical condition it is best to discuss it with your insurance company. Overseas medical bills can be hugely expensive. If one insurance company declines to cover a pre-existing medical condition you can contact other insurance companies to see if a different insurance company will cover your medical condition.