I suspect it was an automated prcess which canx the booking. Once this happened the fare buckets you had secured would have been lost, plus any other hotel deals effective at the time you booked it.
If you’re a Gold member the PFO policy for medical may have applied if you’d contacted them beforehand. Anyhow that boat has sailed.
Seems a very harsh outcome, however. I have the greatest sympathy for your situation. The only thing I can think off is to put in a CR ticket and see if they can assist with any service recovery. Also if you paid on an AXBAPP or even better Amex Platinum card check the travel insurance documents, phone and ask them if you’re covered.