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What is Health Insurance?This is a form of personal insurance that is used to pay for medical expenses. It is also known as ‘private medicine’: by this we mean a form of healthcare which the patient pays for, which enables him/her to be treated at non-government owned hospitals or clinics. It tends to be provided from private insurance companies who for a monthly fee will provide financial assistance for hospital treatment. It is purchased by individuals who wish to have a more ‘personalised’ form of healthcare rather than a ‘one size fits all’ approach.It is in direct contrast to the UK government owned healthcare system – the National Health Service (NHS). The NHS is free at the point of delivery and provides healthcare to all members of society irrespective of income or background. The NHS is paid for via taxation and National Insurance Contributions and was set up in 1948 as part of the welfare state, to look after individuals from birth to death.
However, due to advances in medical science and rising longevity, people’s expectations of the NHS have risen which do not always match with reality. The NHS is trying to be all things to all people in that it aims to treat all illnesses and conditions but does not always have the resources to do so. As a result of this, greater demands are being placed on it which has led to a rise in waiting lists, and in general, hospitals being stretched to their limits. For many people this is unacceptable and so private health insurance is viewed as an answer to this problem. Having health insurance can mean the choice between going onto a waiting list for medical treatment or, having instant access to treatment. For those patients who are in constant pain, or who are suffering from a potentially serious or life threatening condition in some cases, being able to access first class facilities and treatment is of prime importance. What attracts many people to taking out health insurance is that not only does it enable them to have immediate access to medical care but, that this health care can be of a superior quality to the NHS. Treatment on the NHS can mean a long waiting list followed by a stay on a large, open plan ward. There is very little privacy on these ‘Nightingale’ wards, and in some cases, wards are mixed sex according to need. Medical and nursing staff are very often overstretched and do not always have time for one to one patient care. In contrast, being able to ‘go private’ as a result of having health insurance can eliminate many of those issues. Treatment takes place in modern hospitals and clinics which tend to offer a ‘five star’ hotel type service. This means a private room with en suite facilities, a ‘gourmet style’ menu at mealtimes, one to one nursing and immediate access to a consultant. For many people, going into hospital is a stressful affair, and the subsequent lack of privacy and dignity is seen as unpleasant and off-putting. Especially for elderly patients who tend to place a higher premium on modesty and privacy as compared to younger patients. Private health insurance can remove many of those worries. Companies such as BUPA Healthcare, Private Patients Plan (PPP), and AXA PPP Healthcare offer different levels of cover depending upon individual needs and requirements. For example, some companies provide ‘packages’ which are targeted at single people, couples, families and those aged over 50/60. Other types of cover can include specialist requirements such as sports injuries or maternity care. Some companies will offer cover according to a person’s individual budget. This allows an individual to personalise their health cover by picking and choosing from a range of options, such as complementary healthcare and discounts for gyms and health clubs. Basically, it depends upon individual need and budget. The more you pay, the greater the range of cover and facilities. Some offer a basic cover which can then be ‘topped up’ according to need. A ‘fixed package’ is just that: it is a fixed type of cover which will offer a limited amount of choice, and there may be limits on what is offered and when. A standard package will very often cover the following:
Many people prefer to have a policy which is tailored to their exact wishes and so will opt to build a policy from a wide range of cover. We are all individuals with differing needs and so the facility to be able to design your own cover, specific to your health requirements is a positive one. From the expectant mother, to the keen sportsman, from the family with two small children to the middle aged widow, all needs are catered for. So, the type and range of cover will affect the amount of premium to be paid. Health insurance is paid for via a monthly fee in accordance with the type of policy. The greater the extent of that cover, the higher the amount of the monthly premium. Another type of cover is that of a ‘limited’ cover: this is useful for those individuals who do not want to pay out for a full policy or a tailored one rather they would prefer to have cover for long term diseases such as cancer. They will still rely upon the NHS for anything major such as an accident or short term illness but would like private care for long term conditions as these tend to incur a stint on a waiting list in the NHS. Another factor here is that many types of cover offer extras which some people do not want, for example, health screening or a private ambulance. People do not want to pay for a type of cover which includes options that are not likely to use or are not applicable to them. So, they would rather adopt a ‘half and half’ approach in which they will use both the NHS and private healthcare. What has changed with health insurance over the last few years is a move away from a ‘one size fits all’ approach to a more personalised style. There are types of covers from a basic ‘budget’ type to an all encompassing ‘luxury’ type. Health insurance has also expanded to include health and fitness advice, discounts at gyms and health clubs, preventative medicine and GP and/or nurse helplines. The emphasis is on prevention rather than cure in that the adoption of a healthy lifestyle can reduce the need for medical treatment, which is beneficial to both the NHS and the private sector. As with all forms of insurance, there are exemption clauses which means that people looking to purchase a policy need to read through carefully, all the information about that policy. They need to have a full understanding of what that policy covers, and what it doesn’t before making a decision on whether to purchase it or not. This means reading through the small print and asking as many questions as needed before going ahead. Take your time about this, ask for advice and obtain quotes for a range of policies from different providers is a good idea. It is important to bear in mind that many health insurance companies will not provide cover for ‘pre-existing’ or chronic conditions such as diabetes. If you have a long term or chronic condition, your insurance company will not usually charge you extra on top of your monthly premium; however, they are likely to exclude treatment for that condition from the policy. If you require treatment for a condition which is unrelated to the existing long-term one it will be covered by your policy. Also, there are a range of conditions which are considered to be ‘self-afflicted’ by health insurance companies and so cover is not provided. These include HIV/AIDS, cosmetic surgery, dangerous pursuits (which includes sports), drug and alcohol abuse and gender re-assignment surgery. Plus, nearly all providers will not cover NHS prescriptions, GP services, normal pregnancy and Accident & Emergency (A & E) admission and treatment (outpatient). Note: in the case of hazardous pursuits such as sports it may be possible to get cover through a specialist sports provider such as Sports Cover Direct. If you have either a chronic condition such as Parkinson’s disease or a pre-existing condition, such as cancer, is health insurance not an option? Over the last few years the range of health insurance policies available has broadened out to include cover for chronic or pre-existing conditions. This takes the form of a ‘health cash plan’ in which a person can use to pay for day to day medical treatment. It is a low-cost plan, in the form of a monthly direct debit, which pays a cash sum for treatment. It can also include critical illness insurance, accidental death and funeral benefits. The differences between this and private medical insurance are that it does not require the person to undergo a medical examination beforehand. The monthly premium does not increase with age and it is not based upon age and gender, though there may be an upper age limit, e.g. 65, for new joiners. The cash plan can also be used to pay for optical or dental treatment and many other categories. Also, children can be included free of charge if one or more parent is covered. It is important to not that this plan is not private health insurance. It is meant to either complement existing NHS treatment or to pay for private health treatment on a daily basis. Whereas private health insurance pays for private treatment, in a private hospital. It can be purchased instead of private health insurance or in conjunction with it. As with private health insurance there are a range of products available according to individual need and budget. A provider will have their own designated packages, which are aimed at a variety of income levels. There are seven categories within this product:
It is important to check if there are any limitations or exclusion clauses with this type of plan. Some plans will not cover expenses relating to a pre-existing condition, before you took out the plan and many others often exclude conditions in existence, in the 2 years prior to the start date of the plan. One of the main reasons for taking out health insurance is that it offers more of a ‘premium’ service than the NHS. It can mean access to the best hospitals, staff and facilities, which all takes place in comfy and luxurious surroundings. However, it is important to bear in mind that private healthcare is not designed to supplant the NHS. There are still certain aspects, such as accident and emergency provision which are not covered by health insurance, and are not catered for by many private hospitals. Even though private hospitals are modern, up to the minute institutions, they do not have accident and emergency departments or trauma units. This type of provision is something which the NHS handles in both a professional and efficient manner and will carry on doing so. It is also worth bearing in mind that health insurance premiums tend to increase with age as older people will usually require medical treatment more frequently than a younger person, though there are always exceptions to this. This means that they are more likely to draw upon the services of a healthcare provider and so this will be reflected in the amount of the monthly premium. In effect, a 60 year old could pay twice as much each month compared to a 35 year old. Another factor to take into account is that of cover whilst abroad. Many people, especially retired people, own a property abroad, and will often spend a designated period of time, in a year, in that property. Other retirees may be thinking about emigration. Younger people may own a business in another country or as part of their employment, spend a period of time working in another country. Whatever the reason, the issue of obtaining private health provision whilst away from the UK is a pressing one for many people. In many foreign countries, healthcare has to be paid for unlike the UK, where there is the state owned NHS or the option to ‘go private’. Many providers will offer an ‘expatriate health insurance’ policy which has options so that you can choose which aspects you require and excludes those that you don’t. As with all types of insurance there are limits and with international cover, there are two types of limits: one limit applies to all sections, of a policy, during a year. The other type consists of an individual limit for each section, or sub-section of the policy. They will all have a basic ‘core level’ of cover which can be extended by the purchase of additional features. There is no ‘one size fits all’ standard package; rather there are likely to be a range of ‘package’ policies and various choices of cover, for example, travel contingency (flights back to the UK) and cover for UK students studying abroad. Again, you will need to think carefully about the country you are staying in, the type of healthcare provision available and your budget. Importantly, think about the requirements of that country as each country will have its own individual rules and requirements. Generally, in most countries, UK citizens are subject to the same laws and regulations as the native population. However, it is important to do your research regarding this before you travel. This information is designed to give an overview of private health insurance, and is meant to help you make an informed decision as to whether to purchase health insurance or not. If you have any further questions or simply wish to know more then visit the FAQs section which lists the most popular questions, and answers regarding private health insurance. |
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