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Health care cash plan

What is a health care cash plan?

Rachel Ditchburn
Written by  Rachel Ditchburn
5 min read
Updated: 27 Feb 2024

Healthcare cash plans are designed to help the cost of routine, everyday medical procedures.. But do you need one, and are they worth it?

Healthcare costs can be a significant concern for many individuals, especially when it comes to routine check-ups and treatments. Enter the healthcare cash plan, an insurance policy that's designed to ease the financial burden of your predictable healthcare needs. Unlike traditional health insurance or NHS services, healthcare cash plans focus on covering the costs of day-to-day healthcare services such as dental checkups, eye tests, and even some alternative therapies.

Is a healthcare cash plan right for you?

Before diving into a healthcare cash plan, it's crucial to assess whether it's a financially savvy move for you. Consider if you already have some form of coverage, perhaps through your employer, which might make a separate plan redundant. Also, think about how likely you are to remember to claim back eligible expenses. If you're the type who diligently keeps receipts and files claims without fail, a cash plan could work well for you. Alternatively, if you're more likely to let those receipts gather dust, you might be better off setting aside money in a savings account specifically for healthcare costs.

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Understanding the difference: Healthcare cash plans vs. private health insurance

It's important to distinguish healthcare cash plans from private health insurance. The latter is typically reserved for unexpected or emergency health issues, offering a safety net for more serious medical concerns. On the other hand, healthcare cash plans are there to help you manage the costs of routine healthcare services, making them a complementary option rather than a replacement.

The mechanics of healthcare cash plans

Healthcare cash plans operate on a simple premise: you pay a monthly premium and, when you incur a qualifying healthcare expense, you can claim back a portion or the full amount, depending on your level of coverage. This system allows you to budget for your healthcare costs and potentially save on out-of-pocket expenses for treatments you're likely to need.

Medical examinations and pre-existing conditions: What to expect

When signing up for a healthcare cash plan, you may not need to undergo a medical examination, though this can vary based on the provider and factors like age and health status. It's essential to declare any pre-existing conditions upfront. Failure to do so could invalidate your policy. Keep in mind that some providers may exclude coverage for pre-existing conditions altogether.

The waiting game: Qualifying periods explained

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, to ensure the plan's sustainability.

Choosing your healthcare provider

When it comes time to claim, remember that you can only do so for treatments carried out by qualified and accredited practitioners. Most providers will have a list of eligible practitioners to guide you, ensuring that you receive professional and recognised care.

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

Family matters: Coverage for your loved ones

Some healthcare cash plans extend their benefits to cover your children at no additional cost when you opt for a joint policy. However, the specifics of how allowances are allocated for children can differ from one policy to another, so it's worth checking the details.

The price tag: Calculating the cost of healthcare cash plans

Several factors influence the cost of healthcare cash plans, including the level of coverage you choose, any additional policies you might add, your age, overall health, lifestyle habits like smoking, and even your location. For instance, living in a high-cost area like London or being older can result in higher premiums due to the increased risk.

Expert insights from Kara Gammell

"Some people swear by healthcare cash plans, whereas others consider them a waste of money. The key is to only buy what you need and will use. Take the time to tot up your expected spend and check you wouldn’t be better off stashing the cash elsewhere to draw on if necessary. If you do go ahead, make sure you know about all the benefits and use them when you need to."

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