An alternative cure for costs

HEALTH INSURANCE SURVEY: gain more protection and you don't have to pay the earth, is the claim. We examine the range of different policies avai lable, from sick pay cover to insurance for the costs of going into a nursing h ome
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The Independent Online
HEALTH care is no longer free for many adults in Britain. We may receive free treatment if we are rushed off to hospital but visits to the dentist, optician or osteopath often cost.

Private medical insurance (PMI) can cover some costs but for those who have neither the money or inclination to take out a PMI policy, hospital cash plans can be attractive.

Hospital cash plans, also known as health-are cash plans, should not be confused with PMI. Cash plans, as their name suggests, pay out cash benefits for hospital treatment or certain health-care treatment.

The money can be used in any way the contributor chooses. He or she can pay for medical treatment, or household bills. Where the contributor receives treatment is also irrelevant.

In contrast, PMI policies typically are designed to cover the full costs of surgery and treatment in private hospitals. Policyholders may receive some cash but, unlike a cash plan, this is not the primary purpose.

Hospital cash plans have several cash benefits and most policies are similar. Typically they pay a set amount for every night you are in hospital as an in-patient, a lump sum for day-case surgery in hospital and a lump sum recuperation grant if you have to stay in hospital over a set period of time (usually over 10 or 14 days).

The amount of benefit paid will depend on contributions. For example, Birmingham Hospital Saturday Fund (BHSF) offers hospital cash plans starting from pounds 4.12 a month for an individual and pounds 8.23 a month for a family. Hospital in-patient benefit is pounds 13 a night rising to pounds 54 a night for a higher premium. The benefit for day-case surgery in hospital is pounds 25 rising to pounds 90 while the recuperation grant is pounds 25 rising to pounds 180 for those who have paid higher premiums.

Cash plans also pay out a lump sum for pregnancy and make an award for dental treatment, optical treatment, chiropody, physiotherapy and alternative medical treatment such as osteopathy, acupuncture and chiropractic treatment. Usually the benefit is a percentage of the bill, up to 50 per cent of the cost of the treatment. Many payments are for everyday treatment such as eye tests so, in a year, members can use their cover for more than one benefit.

Often there is a maximum amount of benefit you can receive in a year. Hospital Savings Association (HSA), which is the biggest provider, will pay in-patient hospital benefit for 91 days. Premiums are based solely on levels of cover, says James Young, chief executive of HSA: "It's the same premium regardless of how old you are and how often you claim. We don't penalise people as they get older."

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