Healthcare Cash Plan
If you’re considering purchasing a healthcare cash plan then this superb guide should be a helpful companion to you.
It’s important for you to realise that healthcare cash plans differ from life insurance policies. In the United Kingdom we have a unique system regarding our health service. Typically we pay for our hospitals, doctors and dentists through the UK taxation structure, this means our general medical care is free ‘at the point of use’. However we usually get charged for additional services such as dental treatment, prescriptions, glasses and so on. These are elements in which the NHS simply does not fund.
To make matters even more complicated the UK health system is ‘devolved’, meaning England, Scotland, Wales and Northern Ireland decide for themselves how they spend their part of the budget. This means prescriptions are chargeable in England yet are free in Scotland.
So lets find out how can a healthcare cash plan be of value to yourself and your family.
What is a Healthcare Cash Plan?
In basic terms a Healthcare Cash Plan allows for people to pay for their healthcare with regular monthly payments. This is ideal for additional charges for glasses, dental work, optician appointments, physiotherapy and so on. Without a healthcare plan, people may be unable to afford the cost of a new pair of glasses or extensive dental treatment.
In Britain you can purchase a healthcare cash plan for an individual or for a couple. It’s also not unusual to add children to any plan too. You will have to speak to the insurer to see if an additional charge needs paying. Generally speaking however, most insurers will add kids for free to an existing plan. This is because they’re regarded as a minor, so optician and dental treatments are paid for by the state, so most providers will consider children a ‘low risk’.
You should find that most healthcare insurers will include a wide range of options. Some of these options may not be applicable to you such as needing to visit a physiotherapist. Before signing any contract you should read through all of the terms and conditions and all documentation to see what the plan does and doesn’t cover. Remember if you don’t need to visit a physiotherapist, there’s no point in paying for something you will never use!
‘Common’ healthcare cash plans will generally include:
- Dental check-ups including treatment
- Optician visits including eye tests and glasses
You should find that your healthcare cash plan should be ‘tailored’ to your requirements. This means it should include treatments recommended by your GP. If you’re unsure about what you require, it can be a good idea to ask your doctor the next time you see them.
If you want to spend a little more money then ‘comprehensive’ plans can cover an even wider range of treatments. These can be great for many people. For example some treatments include maternity and chiropodists.
Generally speaking most people purchase healthcare cash plans for dental treatment and optician visits, these tend to be the most ‘popular’ reasons for getting a policy. However most insurers will offer a range of different options, so it’s always a good idea to give them a call and see what plans might be ideal for you.
Healthcare Cash Plans Exclusions
With all forms of insurance plans there’s always some exclusions to a policy. As each provider is different you will need to read all documentation before agreeing to any contract. Typically most healthcare cash plans are ‘basic’ and won’t be as wide ranging as traditional health insurance. This means you shouldn’t expect the level of private health care on a basic plan.
For example, some plans will not cover private surgery or visits to a private hospital. Most likely in the majority of plans you will be required to visit an NHS facility. However if this doesn’t appeal to you, some providers may allow the payments you’ve made to pay towards expenses in a private facility, but the plan generally won’t cover the total cost itself.
In addition to this, it’s also worth noting that some plans will not cover people who already have an established ‘pre-existing medical condition’. The definition of what is and isn’t a pre-existing condition varies depending on the insurer, however most serious conditions may have stipulations attached to the policy. Generally speaking most providers like a ‘clean bill of health’ for at least six months before offering a plan.
Equally you should also be aware that some healthcare cash plans will not ‘pay out’ on any treatment if the result has been from the ‘excessive use’ of alcohol or an illegal substance.
As always each healthcare plan is different, so you will need to read all of the small print to see what does and doesn’t apply to you. There’s no ‘one size fits all’ plan, each policy is tailored to individual needs and requirements.
Health Insurance v Healthcare Cash Plan
Even though both health insurance and healthcare cash plans cover a similar area they differ massively from each other.
We’ve broke the differences down so you can easily understand each the pros and cons:
- Health Insurance – Typically a health insurance policy will feature a monthly premium, which needs to be paid similar to car or home insurance. This means should a person require treatment, the care is provided for under the policy. Depending on the details of the policy, treatment can include a wide range of things such as the use of private hospitals, consultants, alternative medicines and so on. Health insurance generally has a ‘high limit’ to cover all types of treatment needs. However basic every day appointments such as visits to the opticians or dentists are not usually included, unless this has been purchased as an optional extra.
- Healthcare Plans – On the contrary a healthcare cash plan will generally pay for day-to-day expenses like visits to the dentists and opticians. It basically acts as a easy and convenient way of managing payments for routine appointments throughout the year. However it’s worth noting that in some cases healthcare cash plans may ‘pay out’ over the duration of a year more than a person has paid in. This only works if enough ‘appropriate claims’ have been given to the insurer. Equally the opposite can also work too, if a person hasn’t needed dental treatment or new glasses, they may end up paying more over a year than what they ‘get out’.
Do I need a Healthcare Cash Plan?
Nobody can answer this question but yourself. You need to work out exactly what treatments you use over the duration of a year and compare the price of a cash plan and see if it works for your needs and your budget.
Generally speaking, people who visit the dentist regularly (every six months) and visit the opticians should consider a healthcare plan to manage the payments more easily.
You should also consider whether your employer has any sort of healthcare perk as part of your job. Most companies do provide healthcare plans for their employees. If this applies to you, then you may find that the basic appointments such as the dentist or opticians might already be covered.
Original Publication: 31 May 2017
Last Updated: 15 July 2017