Independent advice on private healthcare
Health cash plans : Types of plans
A health cash plan is not private medical insurance. It seeks to pay out cash sums for a range of everyday health care, from dental and optical fees, through stays in hospital, to trips to the accident and emergency unit, or homeopathy.
The use of the term hospital cash is now mostly gone as the products have widened out to include a range of health care services, particularly in alternative medicines and therapies.
Increasingly, health cash plans include; GP helplines, health screening, fitness and health advice, and even discounts at health clubs and gyms.
What can be confusing to some is how insurers portray the different levels of payouts.
There are usually between three and eight benefit levels to choose from.The logic is simple, the more you pay per week or per month, the higher the level of benefit you get. The level of payout varies by company and by individual benefit. It is common to see these expressed as 50% or 75 % or 100%. There are also different types of health cash plans.
An example may help; suppose you go the dentist and each trip you have to pay £80. You have a policy where the limit on level 1 for dental is £63, level 2 is £98 and level 3 is £132. On dental cover, the insurer offers a 50% payback.
On your first visit, you pay out £80. From the insurer, you get 50 % of £80, which is £40.
On your next trip to the dentist, you get charged another £80. The most the insurer will pay is half this which is £40, but they have already paid you £40 this year. With level 2 the most they will pay you is £63, so on the second trip they will only pay you £23. BUT if you have level 2 cover where the limit is £98, you would get the full £40 on the second trip. Only after the third trip costing you £80, will the limit be reached, as the insurers have paid out £40 twice and will only pay you £18 the third time. If you had level 4 cover, the limit would not be reached until the fourth dental trip.
It is quite simple really. The benefit you chose is not per visit, but is a total limit over the 12 months of the policy.
Some insurers now provide a 2 year limit on certain benefits, so if you have the bad luck to have to pay for health care or go into hospital on several occasions in one year, but none the next year, on a 12 month limit you may hit the limit of payout a lot sooner, than on a 2 year basis.
Health cash insurers, on average, pay out 80 pence for every 100 pence they get in. Their aim is to get you to use, but not abuse, the benefits and help keep you healthy.
If an insurer offers with varying percentages, different limits, a mixture of one and two year benefits and day limits on some sections confuses you, ring them up and ask them to help you, that is what they are there for.
Our aim is to help guide you through this maze of health cash insurance policies.