The little-known way you could save on medical expenses
If you regularly pay out for routine health treatment, like the dentist, optician, physio and prescriptions, we want to let you in on a well-kept secret that could help you cut the cost.
Increasingly patchy access to NHS services is fuelling a surge in demand for private health cover. Last year, we forked out a record amount (£32.3bn) on private health care from medicines, vaccines and vitamins to consultations with specialists, dentist appointments and in-patient hospital services, according to the latest ONS figures.
The health insurance market, too, which covers medical, dental insurance and health cash plans, grew by a whopping £385m in 2022 alone, according to a report by Laing Buisson.
"The NHS is clearly not going to fall apart overnight. However, those people facing very long waits to be seen are not just ‘patients’ or ‘taxpayers’, they are also customers. When they cannot access healthcare entitlements they should technically be receiving on the NHS, it may cause them to rethink the value of paying additionally to get appropriate care when it is needed," says Tim Read, the report’s author.
When it comes routine appointments, health cash plans are surprisingly cost-effective.
How do health cash plans work?
Health cash plans are the unsung heroes of affordable routine healthcare. They don’t have the high profile that medical insurance has and represent just 7% of the market but they pre-date the creation of the NHS in 1948, and were originally provided by charitable and non-profit organisations for their workers. Plans cost from as little as £9 a month and have a great track record when it comes to claims.
"Health care cash plans are unusual in that they are a type of health insurance that is actually designed to be claimed against for everyday expenses rather than if something goes wrong," says Caroline Bromham, head of sales and marketing at Sovereign Health Care.
"FCA data shows that health care cash plan customers claim more frequently on cash plans than policyholders for other types of insurance," says Caroline.
The formula is simple: you pay upfront for your treatment, make a claim (online or by post) to your cash plan provider, sending them the receipt, and the payout goes directly into your bank account. Some plans pay a proportion of each claim up to an annual limit per type of treatment, e.g. £150 maximum for physio, £100 for dental, etc. Claims usually need to be made within three months but once processed you normally get the money within a few days.
How is it different to private medical insurance?
The cost of private medical insurance varies by a range of factors including your age, state of health and where you live. The average monthly cost of comprehensive cover ranges from £41 for a 20-year-old to £203 for a 70-year-old.
"As a rule of thumb, health insurance is designed to protect you from unpredictable and expensive risks that could happen in the future. For example, if someone with health insurance develops cancer, the insurer pays for that person to have treatment in a private hospital, with costs potentially running into tens, sometimes hundreds of thousands of pounds," says Chris Steele of Mytribeinsurance. "Whereas cash plans are a way of spreading the cost of routine, low-cost, usually predictable medical costs. So, check-ups at the dentist, a trip to the opticians and sometimes physiotherapy and alternative therapies," he says. Those who can afford it, might have both.
Source: Mytribeinsurance.co.uk, FCA-regulated, private healthcare and insurance website
What’s covered in a health cash plan?
Visits to the dentist and hygienist
Eye tests and prescription glasses/contact lenses
Physio, chiropody, osteopathy, some cover acupuncture and homeopathy
New baby – a one-off payment for both childbirth and adoption
Hospital inpatient stays
Access to benefits such as medical helplines and 24/7 GP access, employee assistance programmes
Different plans offer enhanced levels of cover for different problems. For instance, if you have annual dental checkups and hygienist appointments, you could choose a plan that offers you more dental cover per year, or a cash plan specifically for dental care.
Health cash plans typically don’t cover treatments such as cosmetic surgery, laser eye surgery, professional sports injuries and non-prescription medicines or glasses.
Would it work for me?
Firstly, if you are employed, check whether you already have access to a group health cash plan that would cover you (and your partner/family) as a company benefit. Some company schemes are offered as a voluntary benefit for which you pay for access (typically £10-£20 a month), with others the employer funds the scheme.
If you aren’t covered already, health cash plans are worth considering if you regularly pay for eye tests, dental check-ups, glasses, physio, and prescriptions. "Look back at your healthcare costs in the past couple of years, work out where you've spent money, and see if the price of a cash plan is less than what you've paid out," says Chris.
Will you be able to claim back more than the plan cost you? For instance, if you pay £15 a month (£180 a year) on a plan, but your annual dental check-up costs £52, a hygienist £67, optician £20, you need 4x physio treatments at £52 and 4x prescriptions at £9.90 (totalling £334), it would be well worth it.
Finding the right plan
No comparison sites cover health cash plans. However, mytribeinsurance.co.uk regularly reviews health cash plans in detail. Also, MoneySavingExpert regularly calculates the plans that give the highest potential payout compared to cost. Its highest scorer for plans for those of 65 and under is currently HSF (Scheme V2), which has a monthly cost of £11 per person and includes £60 dental cover, £75 optical cover, and £150 for physio. You can claim back the cost for two prescriptions (3 month no-claim period applies).
For families (2+2), MSE’s highest scorer is Sovereign Health Care (Level 2) with a monthly cost of £31.20. You can claim back (per person per year) £90 for dental, £90 for optical, £300 for physio (up to 50% of each claim) and up to £24 for prescriptions (up to 50% of each claim). Cover is immediate but there’s a qualifying period for some benefits and all pre-existing conditions covered after six months.
Your checklist before you buy a health cash plan
If you have a family, check whether the adult policy includes free cover for dependent children. If so, how many can you cover, do they get their own claiming allowance or is the allowance shared among all the children covered? What benefits are children covered for?
If you are under 65, you won’t need to undergo a medical, but you will have to declare pre-existing conditions.
There may be qualifying periods in some instances, especially for pre-existing conditions.
You cannot roll over any unused allowance. Each year of the policy has its own treatment maximums. So, use it or lose it!
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