Private health insurance used to be something taken out by the rich and famous. Thankfully, the prices of health insurance have dropped to a more affordable level, meaning that all of us can enjoy the peace of mind that private health insurance offers, no matter what our budget.
Private health insurance goes by many names – private medical insurance (PMI), hospital plan, health plan, health insurance and cash plans and they are, in one form or another designed to assist with costs related to your health.
You can also get specific forms of private health insurance such as dental insurance.
Private health insurance should not be confused with permanent health insurance, which is something completely unrelated to medical costs and which pays out an income if you become permanently ill.
Here we take a look at the private medical insurance sector and discuss the different types of cover available.
Why do I need private health insurance?
With NHS waiting lists growing all the time and the patient having little choice over what hospital he is seen at and at what time of day, more and more people are opting for private health insurance.
This removes the long and often anxious wait for an appointment and means that, in most cases, you can choose which hospital you are seen at as well as having an appointment time, often within a few days.
It gives you the peace of mind knowing that you will be seen and treated quickly at the best hospitals should you ever become unwell.
What is the difference between private medical insurance (PMI) and cash plans?
A typical PMI policy pays for the cost of medical treatment. Subject to a limit on which hospitals can be used and, in some cases, the type of medical treatment required, a PMI policy will pay the costs of your treatments and your stay in hospital.
However, you can get different levels of cover, so the more you pay, the more benefits you will get such as a wider choice of hospitals; more types of medical treatment will be covered etc.
Following referral by your GP, the insurance will pay consultants’ invoices for investigations, operations and necessary treatment. Normally, 100% of costs are met. The knock on effect means that as almost everything is covered, PMI can work out more expensive than basic health insurance such as cash plans.
Hospital cash plans – or just cash plans – are lower costs alternatives to PMI. Designed to complement the services provided by the NHS, they cover the costs of every day healthcare, such as dental and optical bills.
Additional features of some of the plans are payments towards the cost of consultations and treatments such as physiotherapy, chiropractic treatment and even ‘alternative’ treatments such as acupuncture and reflexology.
Cash plans pay towards the costs of everyday treatments, so it is expected that you will make several claims a years – every time you visit the dentist, optician or physiotherapist for example.
Why are cash plans cheaper?
Individual cash plan claims are lower – they do not pay the cost of treating specific illnesses, rather, bills are reimbursed up to an agreed limit or there is a fixed daily amount if they are hospitalised – which makes cash plan premiums lower.
Can I have a PMI policy and a cash plan?
Yes, many people who subscribe to PMI themselves or have PMI provided by their employers, supplement their PMI cover with a cash plan. This means all their healthcare needs, whether it be a trip to the dentist, or major surgery, are met.
What is ‘self-pay’?
An alternative to both PMI and cash plans is self-pay. You pay the bill for an operation as and when you need it, so there are no monthly premiums over many years. However, you should consider this option carefully – what would happen if you had the bad luck to be struck by a very serious illness? Could you afford the cost?
I’ve heard about a health insurance plan that offers you cheaper premiums the healthier the lifestyle you lead – is this right?
Yes! A new policy in the PMI market place calculates your premiums based on how healthy you are, so it is an incentive to keep healthy! This particular health insurer recognises and rewards healthy living so not only can you make significant savings on your premiums by walking the dog that bit more often or making sure that you have your five fruit and veg a day, but they help you to stay healthy through discounts with their health and wellbeing partners.
What other plans are there?
There are many new types of cash plans coming onto the market that deal with specific treatments or situations such as dental insurance.
What does dental insurance cover?
There are a small number of providers of dental insurance on and individual as well as a family basis and typically the plans offer cover for costs associated with maintenance (such as regular check-ups, x-rays and hygienist visits), emergency care and for if your teeth are damaged in an accident, and treatments (eg fillings, bridges and crowns).
Plus, some offer a lump sum payment should you be diagnosed with oral cancer as well as extended worldwide cover.