Small medical expenses don’t seem too bad by themselves, but regular dental check-ups and buying a pair of glasses for you and one of your children can quickly add up. Health cash plans give you money towards optical, dental and other treatments (even the cost of alternative therapies) without forcing you to fork out for expensive insurance premiums

• What is a healthcare cash plan?
• How do does a healthcare cash plan work?
• What does it cost?

What is a healthcare cash plan?

A health cash plan is really a way of budgeting each month for medical and healthcare expenses. You pay money in every month and then if you have a treatment for something or you give birth or have to go to hospital, you get a kind of cash “rebate”.

Health cash plans are not the same thing as private medical insurance (PMI). PMI is a full service alternative to the NHS (though it doesn’t usually include GP services).

Health cash plans are cheaper, and are generally taken out by people who regularly spend on areas of medicine not covered by the NHS (such as optical or dental treatments). The idea is that by paying into a health cash plan scheme, you get some (or even all) of your money back by the end of the year.

Private medical insurance can work with health cash plans and is useful if you think you will need help with major treatments that you would like to have done privately. If that is of interest to you click here to see a comparison table of the best deals.

How does a healthcare cash plan work?

The majority of health cash plan providers are charitable or non-profit organisations which were started during the 19th century, before the NHS, in order to help workers pay for healthcare. What this means for you is that they are not trying to take you for all you are worth, as any profits they make don’t go to shareholders, but to the NHS and charitable funds associated with healthcare. As a result, payments are cheaper and claiming is easier.

Secondly, health cash plans do not care for your health in the same way as PMI:

• Instead of covering the costs of private healthcare in case you need big operations or specialist consultations, health cash plans aim to alleviate all your non-NHS bills, including dentists, opticians and alternative therapies, and help you maintain your health to avoid the need for big operations.
• They cover treatments from the chiropodist to the chiropractor, homeopathy to acupuncture and physiotherapy and osteopathy, all of which would not be covered by a normal basic PMI.
• They will also pay contributions towards the expenses of having a baby, spending time in hospital and hospital care of the elderly, which PMI would not.
• To become a member of a plan, you do not have to undergo any medical examinations and your premiums are not related to the condition of your health.
• Most plans also cover any children you have who are under 18 and living at home.

However, just like PMI, a health cash plan does have limits on how much it will contribute to your costs.  First of all, each benefit states the percentage of the costs that it will cover.

• For opticians and dental costs it is often 100%, meaning that if you send them a bill for £50 they will send you a cheque for £50.
• Other benefits such as physiotherapy might only cover 75% of costs, so out of a £50 bill, you’d only get £37.50 back.

Each benefit also has a maximum annual payout depending on how much you pay a month.

• So for instance, if the limit for optical care was £75 a year, then the company pay your first £75 of optical care claims that year. After that you will have to foot the bill yourself.
• However there is no limit to the number of claims you can make per benefit.  This means that you can claim as many times as you like before your payouts reach the annual limit. But when you reach this limit, you won’t get any more money.

For some organisations, each benefit maximum is actually designed to be roughly the same as your annual membership payment, so even though you only get so much money back, using up any claims limit really just means that you’ve got your money’s worth from your membership.

What does it cost?

You can actually get a lot of cover for very little money. Prices are not based upon how healthy (or not) you are, so you’re not going to pay more if you’ve been ill in the past.

The basic benefit schemes for an individual range from just under £5 a month to just under £10 a month for basic cover, but for extra benefits and higher limits you can pay up to £78 a month.  There are a huge variety of prices and benefit limits. The golden rule is: the best way to choose the plan is to look for the maximum you can get for the benefit you’re most likely to use.

(There’s a comprehensive list of healthcare cash plan providers at the end of this article.)

So if you need frequent dental work then you’ll want a scheme that has a high dental limit, or if you anticipate needing a very swanky pair of designer specs in the near future, you’re going to want to get a high optical limit and percentage payout.

It’s essential that you do your research properly and watch out for percentage payouts and any terms and conditions.

Just to give you an example of the pitfalls:

Medicash’s monthly payment for its second most basic individual scheme is £10.40.  For that you get £80-worth of cover for optical and dental costs, and they will pay 100% of your bills up to that amount.

However, you may look at HSF and think for just £1.60 more on their second level scheme, you get £100 optical and dental which covers both your partner and your children who live at home, so it’s a better deal.

On the other hand, HSF only pays 50% of bills. This means that although you do get more money in the long term, you’ll have to spend more money yourself to reach the benefit limit.

However, HSF is a good bet for families because all its plans include you, your partner and any children under the age of 18 who still live at home in the individual price.

With the majority of other plans, you have to pay full price for both adult partners and children don’t get the same amount of cover as the main benefit holder. But with HSF £6 a month covers you, your partner and your dependent children, and the annual limits are calculated per person, not per membership.

So, if your payments give you a £75 annual limit for optical care, under your own individual membership your children and your partner each have a £75 limit as well.

Magpie pick: While the best healthcare cash plan depends on your individual circumstances, we like Engage Mutual Assurance’s Health Cash Plan. It offers higher payouts for less money than most of its competitors (for example it offers £100 worth of optical and dental cover for just £10 a month – that’s cheaper than both Medicash and HSF, and – unlike HSF – it pays 100% of bills. It’s cover for children is slightly less generous than HSF’s – but then it offers higher adult payouts for less monthly payment.

See Mutual Assurance’s Health Cash Plan here.

Who can join the schemes?

The joining ages vary slightly but they are usually between 16-65. However, even though you can’t join after the age of 65, you are still covered if you are an existing customer. The only restriction on the majority of the plans is that you can’t change your plan after you reach the age of 70.

How do you join?

Joining these schemes is very easy – either apply online or download a printable registration form which you then fill out and send off to the company. You will be asked for some details and medical history as some of the providers will not cover any pre-existing conditions you have, or will not cover you if you are a professional or semi-professional sports person.

However, most of these companies are charitable organisations and are not trying to squeeze money out of you that they won’t make good on later, so you just need to be careful to check the terms and conditions of these plans to see if they are going to be suitable for your needs.

How do you claim?

When you take out your plan, the majority of providers will require you to wait three months before you claim anything, so during this period you are not covered and cannot claim.

Claiming on health cash plans is far easier than claiming for PMI. All you have to do is download or request a claim form from the provider’s website and send it off with the appropriate receipts or supporting information.

Most of the providers aim to process your claims very quickly (often within two days) and send you a cheque or pay the money directly into your bank account within seven days at the latest. Claims on health cash plans are rarely rejected or even queried as long as you abide by the terms and conditions of your plan and don’t try and make any fraudulent claims.

All of the providers do insist that the healthcare professional you choose to see is a recognised and registered member of the appropriate union in order to make a claim and with some plans you have to submit a claim within six months of receiving the treatment, so make sure you’re organised and see a certified doctor.

Are these plans worth it?

In a word – yes! They can offer terrific value in their payouts.

If you know you’ll make the claims, these health plans are well worth taking advantage of. You’ll get a large proportion of your non-NHS medical costs covered (and sometimes all of them). Some years people even make a small profit from their health cash plan!

But we stress again: these plans are a no-brainer only if you know you will make the claims for things like dentistry costs and opticians bills. If you don’t make any claims, you’re just throwing your money away.

Are there plans designed just for dental costs?

There are indeed dental cash plans that are specifically designed to combat rising dentistry prices since the NHS dental reforms in 2006. They offer a lot more cover for dental treatment than the dental benefit in a normal health cash plan -  so they are great if you anticipate having lots of dental work (or if you just want to be able to cover the cost of frequent and thorough check ups).

SimplyHealth offers a dedicated dental cash plan, as does AXA.

The SimplyHealth Dental Plan helps you and your family look after your dental health. You get money back on routine check-ups, maintenance, and treatments like fillings, bridges, crowns and dentures. You’re covered for emergencies and accidents, too. Plus you get TWO MONTHS FREE when you join online here.

Some health cash plans will be designed just to cover your NHS costs rather than private medical costs, so make sure you get the plan that suits your preference.

• Engage Mutual Assurance
  
• HSF
• SimplyHealth
• HealthShield
• Medicash
• Westfield Health
• Standard Life
• Saga
• AXA