A spoonful of sugar to help pay for the medicine
Cash plans are cheaper than medical insurance, but don't treat them as a substitute, warns Laura Harding
Sunday 29 June 2008
Healthcare costs can add up unexpectedly, even if your treatment is carried out on the NHS. Charges for prescriptions, optical tests, physiotherapy and alternative therapies mean that healthcare is not as "free" as we like to think.
Medical insurance covers the full cost of going private but can be expensive. Healthcare cash plans are a far cheaper alternative and will help you recover at least some of the cost of NHS or private treatment. In contrast to a private healthcare policy, these plans do not require you to have a medical examination. But be warned, they are rarely an insurance panacea.
The main difference between the two is that cash-plan customers have to arrange the treatments, pay the bill and then reclaim some of the cost back, rather than having everything automatically covered by an insurance policy. Following the treatment, you send in a claim form, with receipts, for some or all of the cost. How much of this you get back will depend on the plan you choose. A cheaper, basic scheme will pay out less then a more expensive, comprehensive one.
All cash plans offer varying levels of cover and limits on how much they pay out, depending on how much you contribute. If you have a lot of prescriptions or frequently have costly alternative therapies then you should look for a plan that will cover as many of your costs as possible. If you have little idea of how much you will need, start off with a cheaper plan – there's no point paying a high premium if you rarely make a claim.
The best-known provider of healthcare cash plans, HSA, offers schemes to meet the cost of dental care, sight tests, glasses (including prescription sunglasses) and contact lenses, physiotherapy, osteopathy, acupuncture, homeopathy, chiropody and allergy testing, as well as giving you cash back if you go into hospital. Premiums start from less than £10 a month but the amount you can claim decreases if you are over 60.
HSA is by no means the only company out there, and there are various plans available for different age ranges. The Birmingham Hospital Saturday Fund value plan, for those under 35, costs £9 a month and allows you to claim £500 of medical expenses. The same provider's family plan for two adults and two children, all under 35, costs £17.50 a month or £210 a year but allows you to claim up to £1,210 a year.
Alternatively, there is the Bolton & District Hospital Saturday scheme, which costs £9 a month and offers an annual cash repayment of £458, including money for every night spent in hospital, maternity expenses, dental and optical care, as well as physiotherapy, osteopathy, acupuncture and chiropractic treatments. The Westfield Good For You plan is also a strong contender; it costs £10 a month and allows annual expenses of £499.
The Birmingham Hospital plan is not the only one available for families; schemes for one adult and one child, both costing less than £10 a month and offering costs of up to £620, are available from Healthshield and from Westfield. Both companies also offer family cover for two adults and two children for less than £20 a month with returns of more than £1,000. Most cash plan operators are non-profit-making organisations, allowing them to maximise payouts, especially when a large number of their customers neglect to make claims, leaving them with healthy cash reserves.
However, Peter Chadborn, from the independent financial adviser CBK, says that healthcare cash plans should be approached with caution. "They may be the right thing but then again you have to consider if that is really what you want. There could be other areas of protection that are more important and would be a better choice, so I would suggest people consider the wider implications.
"More relevant products [might include] private medical insurance, or income protection insurance for those most worried about replacing their income if they fall ill," he adds. "You should consider what it is that keeps you up at night and make sure you choose the product you really need."
And David Kuo, head of personal finance at the money website fool.co.uk, says it is important to remember that, if you take out a healthcare cash plan, you will still have to meet some of your own costs – you should not be lulled into a false sense of financial security. "Healthcare cash plans are a bargain-hunter's answer to private medical insurance," he says. "For some people, though, this is the difference between seeing a specialist immediately and being put on to the end of a specialist's long waiting list.
"The [plans] should not be seen as a cure-all, but as an aspirin to numb some of the financial pain."
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Authorities failing in hunt for 'most wanted' tax dodgers who owe HMRC £844m
Buyers beware of new-build home headaches
Bargain Hunter: Kit yourself out in sports gear - at a healthy discount of up to 75%
Bargain Hunter: Hailo's smartphone taxi tip can save you money on cab fares
The 10 Best money-saving sites
- 1 Arizona shooting: Gun instructor accidentally killed by nine-year-old girl with Uzi
- 2 Paul Scholes: Manchester City were so good against Liverpool I felt like turning the television off
- 3 Notting Hill Carnival: Woman shares selfie after being ‘punched in face for telling man to stop groping her’
- 4 Homer Simpson has taken the ALS ice bucket challenge because of course he has
- 5 Do you realise just how foolish the UK looks?
Exclusive: We share blame for creating 'jihad generation', says Muslim strategist
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Arizona shooting: Gun instructor accidentally killed by nine-year-old girl with Uzi
Do you realise just how foolish the UK looks?
- < Previous
- Next >
iJobs Money & Business
£40000 - £48000 per annum + benefits+bonus+package: Harrington Starr: C# Devel...
£45000 - £60000 per annum + benefits+bonus+package: Harrington Starr: C# Swift...
Negotiable: Harrington Starr: A fast growing Financial Services organisation b...
£50000 - £60000 per annum + excellent benefits: Harrington Starr: An award-win...
Day In a Page
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony