Health care cash plan

Key takeaways

• Healthcare cash plans are designed to help with the costs of routine healthcare appointments, such as dental check-ups, eye tests, physiotherapy and some alternative therapies

• Private medical insurance (PMI) is different from a healthcare cash plan and is designed for unexpected or emergency health issues

• You don’t usually need to undergo a medical examination to take out a cash plan but you might need to declare pre-existing conditions

With a healthcare cash plan, if you pay for NHS or private treatment at the dentist, optician, physiotherapist, chiropodist – and various other treatments – you can claim a proportion of the money back from the cash plan provider.

The claims process is usually fairly straightforward, and payments are relatively quick.

You’ll be able to claim back a proportion of your expenses in various categories up to an annual limit per category. In general, the more you pay for your cash plan, the higher this annual limit will be.

You can buy a cash plan for an individual, as a family or you might get it as part of your workplace benefits package.

Is a healthcare cash plan right for you?

A healthcare cash plan can help with the costs of everyday health appointments and check-ups, such as the dentist, optician, hearing, physiotherapist and alternative therapies. Some policies also cover childbirth or adoption, and in-patient hospital stays.

To decide if a health cash plan is right for you, add up how much you spend on routine medical appointments each year. If you’re a sporty person who has regular physio appointments or a glasses or contact lens wearer, you’re likely to find a cash plan will save you money.

Before buying a policy, check if already have this type of financial product through your employer as it’s a popular workplace benefit.

The golden rule with cash plans is to remember to keep receipts and make a claim. Cash plan companies rely on customer apathy to make money – they make a profit from customers who take out a policy then forget about it and never make a claim.

If you diligently keep receipts and file claims without fail, a cash plan could work well for you. Alternatively, if you're less organised, you might be better off setting aside money in a savings account specifically for healthcare costs.

Healthcare cash plans vs. private health insurance

It's important to understand the difference between healthcare cash plans and private medical insurance (PMI). They are two very different products.

Healthcare cash plans help you manage the costs of routine healthcare services. You will need to find providers or therapists yourself and pay up front – then claim the money back. There is no queue jumping facility and they won’t cover the full cost of long-term treatment.

PMI, on the other hand, is designed to cover the cost of private treatment for serious health issues, and means you will get treated more quickly than you would on the NHS. However, you normally need a GP referral to see a consultant under a PMI policy.

How healthcare cash plans work

With a healthcare cash plans you pay a monthly premium based on your age and how many people are covered on the policy (i.e. single, couple or family).

Your premium will also depend on the level of cover you require – the more you pay, the higher the benefit level.

When you incur a qualifying healthcare expense, you can claim back a portion or the full amount, depending on your policy.

Medical examinations and pre-existing conditions

When signing up for a healthcare cash plan, you don’t usually need to undergo a medical examination.

However, you will usually need to declare any pre-existing conditions upfront.

Waiting periods

To prevent abuse of the system, such as immediate claims followed by cancellations, healthcare cash plans often include a qualifying period ranging from one to six months.

For specific claims, like those related to maternity, you might find an even longer waiting period, sometimes up to 10 months.

Choosing your healthcare cash plan provider

When it comes time to claim, remember that you can only do so for treatments carried out by qualified and accredited practitioners. You may need to provide proof of the practitioner’s qualifications – for example, their registration number, to make a claim.

The best way to choose a plan is to think about which benefits you are most likely to use, and choose the plan that offers the largest claim limit for that type of treatment.

For example, if you are a regular at the physiotherapist due to your job or sports participation, you should look for a cash plan that has a high limit for physio fees. If you wear glasses or contact lenses, look for a plan that has a high optical limit.

If you have PMI as well, you may also be able to get some eye care costs covered by your policy.

What's covered under healthcare cash plans?

The scope of healthcare cash plans can be quite broad, varying significantly from one provider to the next. Commonly covered services include:

• Dental care

• Optician services

• Chiropody

• Physiotherapy and osteopathy

• Maternity payments

• Chiropractic treatment

• Homeopathy and acupuncture

• Health screenings

• Personal accident coverage

• Mental health care

• Hearing aids

• Prescriptions

Cover for the whole family

Some healthcare cash plans cover your children up to the age of 18.

However, the specifics of how allowances are allocated for children can differ from one policy to another, so check the details.

Calculating the cost of healthcare cash plans

Several factors influence the cost of healthcare cash plans, including the level of cover you choose, any additional policies you might add, your age, overall health, lifestyle habits like smoking, and your location.