This is probably one of those instances where you are used to doing one thing so perhaps ask the wrong question. I deal daily with MED1 and MED2 flight both planned and upgraded on the run (the responsibility rests with the captain to determine the status). I work at a tower and deal primarily with RFDS and a rescue helicopter. If someone had a sick person on board I would probably straight away ask if they needed MED1 priority as that is something I deal with day in and day out. If that caused some confusion maybe I would then go back and ask if it was a medical emergency etc etc.
I guess the point I am trying to make is, that I am sure the controller wasn't trying to make life hard, but if he/she deals with MED flights frequently, that is the first thing that will pop into mind.
EDIT: Back Seat Driver posted as I did. I have often had flights upgrade (and downgrade back unfortunately) to MED1 in flight or whilst taxiing. These haven't been prefixed with PAN though each instance was a RFDS or RESCUE helicopter.