Homeowners Insureance

While Britain’s National Health Service is fairly unique compared to some other countries in that it offers free healthcare, more and more people have been turning to some form of private health insurance either to replace or to supplement the publicly provided services.

And as the numbers have grown, different levels of cover have been developed so that there is a medical insurance plan to suit most pockets and this, of course, includes cheap health insurance.

In the past, the major barrier to a greater take-up of private health provision lay in its relatively high cost. Because demand continued to grow apace, however, insurers have developed alternatives to traditionally quite expensive comprehensive private medical insurance plans, that sought to provide cover for the whole range of acute conditions, treatments, surgery and hospitalisation.

The alternatives today, therefore, provide access to private health insurance for a much wider section of the population, from fully comprehensive cover to relatively cheap cover. The different levels of cover available now, therefore, include “mid range” schemes and budget plans that offer cheaper types of health insurance.

Hospital cash plans are a form of medical insurance that takes care of everyday medical costs. Many will pay for dental or optical treatment up to a set limit every year; physiotherapy; specialist consultations etc. Many now also will cover the cost of so-called ‘alternative’ treatments such as acupuncture. These types of plans are often known as ‘budget’ plans.

The range of schemes also includes forms of specialist insurance, which is limited to cancer and heart conditions, and is therefore cheaper than fully comprehensive cover. All forms of health insurance are designed to work alongside the NHS (which continues to handle all responses to accident and emergencies, for example) and this is also reflected in the ability of insurers to offer policies with generous no claims discounts. If the policy holder chooses to make no claim on the private health plan and instead opts to use the NHS, then a discount on the private health insurance premiums can be earned.

Similar reasoning lies behind the option offered by many health insurers for policy holders to wait for a certain period (typically six weeks) to see if the treatment they need will be available within that time on the NHS. Only if it is not, will the health insurance need to kick in with private treatment.

Another way in which cheap health insurance can be provided is by the policy holder sharing some of the risks and costs of health care by opting to pay a reasonably high excess. If this is set at a rate of £1,000 or £2,000, for example, then the health insurance can be reserved for just the more serious and expensive procedures, surgery and medical care.

That concept of the policy holder sharing in the responsibility for their own health is also reflected in the health insurance discounts available to those who opt to lead a healthier lifestyle.

In summary, therefore, cheap health insurance has been developed to give almost every section of the population an opportunity to share in the benefits of private medical insurance.

By Gemma Stanbury

Health insurance, private health insurance, medical insurance, comprehensive medical insurance - they are all names for the same kind of insurance cover. They all suggest that the policy holder will be protected against the financial cost of medical bills, allowing them rapid access to whatever treatment is required and the choice of when that treatment is delivered.

Rarely, however, can any insurance cover be so open-ended and health insurance is no exception. Like most insurance, private medical insurance also has its fair share of exclusions that can catch some people out when they discover that their insurer declines to pay for some treatment that they had imagined would be covered.

Indeed, in a 1998 report on private medical insurance generally, the Office of Fair Trading was somewhat critical of the wide range of policies that offered different levels and types of cover to their respective policyholders. In response to this criticism, the Association of British Insurers published some useful guidelines - Are you buying private medical insurance? - which set out what it described as “core product” features that most insurance plans should offer and an explanation of the most common types of exclusion.

The core product features of most health insurance, therefore, should include cover for:

- Treatment of acute medical conditions (where and acute condition is defined as “a disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, illness or injury which leads to your full recovery”);

- Surgery;

- Hospital accommodation and nursing care; and

- In-patient tests and procedures.

When it comes to the exclusions from this core product, these are defined by a term that will be familiar to anyone who has arranged any type of insurance that involves any form of medical health; namely “pre-existing conditions”.

Although policies will differ in their detail (and should therefore be considered carefully before committing to a particular health plan), the general definition of a pre-existing condition is one for which the policyholder received treatment or suffered symptoms generally within 5 years of applying for the insurance. Under the majority of policies, the insurer will simply decline to meet the cost of any treatment for such conditions. With other policies, however, a so-called “moratorium” is applied. Although no cover is available for the pre-existing condition during the first two years of the policy, if the policy holder has been free of any such pre-existing condition during this two-year period, the insurer will pay for its treatment after the two-year “moratorium”.

In a similar vein, the distinction between “acute” (as described above) and “chronic” is relevant. Chronic conditions are those that require repeat treatment over a length of time. Such chronic conditions are also excluded from the health insurers’ core product and patients seeking private treatment would have to pay for that treatment themselves.

Treatment in NHS accident and emergency departments is excluded from medical insurance plans, but any subsequent transfer, because of extended hospitalisation is likely to be covered.

Private health insurance will also commonly exclude the need for any treatment arising from pregnancy or childbirth.

By Gemma Stanbury