Based on the OP, that sounds like exactly what has happened. Credits aren't open-ended though, and this one apparently has a December expiry. If it has been issued as an MCO, with a 125- code to be inputted on the payment page at BA.com, then it may be that the expiry date is simply the last booking date. This will give the OP the opportunity to book for travel almost twelve months later. If it's a 'pure' credit, then they may be able to book a more flexible ticket type too.

I'm afraid that I don't have any direct experience of the system in this scenario though, so the OP should perhaps check the detailed Ts&Cs and post back with any further questions. DO NOT POST ANY CODES, NAMES OR REFERENCES THOUGH!

More generically, travel insurance is indeed not as high-profile in other markets as it is in the UK. And yes, very many people in the UK still ignore it, or only take it out immediately prior to departure.

There's a perception that the greatest value of insurance comes from medical and baggage cover. The reality is that the greatest risk to any trip booked on a non-flexible basis is cancellation prior to departure - and the further in advance that the trip is booked, the greater the risk of unexpected circumstances occurring which compromise travel plans.

Fingers' crossed that the OP's treatment is successful and that they're able to rearrange their trip at the earliest opportunity.