Health Insurance - Affordable Medical Insurance

A guide to private medical insurance

If you are contemplating either Private Medical Insurance, including a Health Care Cash Plan, Income Protection due to illness or Critical Illness Cover, it is necessary to navigate through a minefield of health insurance cover product names, definitions, terms of cover, benefits and exclusions. The article below attempts to shed some light on such Health Insurance Plans and Policies available from private health insurance companies. This should enable you to review the available medical insurance providers, make informed judgements and decisions concerning private health care insurance, and choose the affordable medical insurance that suits you.

Private medical insurance (PMI)

PMI (sometimes referred to as Personal Medical Insurance) is a health insurance UK plan intended for use when covering the costs of private medical treatment for curable short term medical conditions, referred to frequently as acute conditions. PMI may cover the private health care costs of surgery, specialists, accommodation and nursing at a private hospital or in a private ward of an NHS hospital.

Healthcare Insurance Plans offered usually come in two types, Standard or Comprehensive.

• A Standard Health Insurance Plan offered by a medical insurance provider covers hospital or emergency treatment with no optional extras or cover for Outpatient treatment. Under a Standard private health care insurance plan you will usually be covered for Inpatient and Day-care treatment only.
• Private health cover providers offering Comprehensive Health Insurance Plans often add extra modules or options to cover private health care Outpatient treatment, dental treatment, complementary medicine, maternity, travel and personal accident.

In general, private health insurance companies do not offer personal medical insurance plans that cover CHRONIC or CRITICAL illness which cannot be cured, for example multiple sclerosis, asthma or diabetes. However, in a crisis, most PMI health insurance cover will include the cost of treatment for stabilising a patient and returning them to their previous level of health when possible.

A private health insurance UK medical insurance provider will offer PMI contracts on an annual basis, with premiums payable monthly, quarterly or annually. Discounts are offered by many private health care medical insurance providers should you pay annually, or take up a VOLUNTARY EXCESS/DEDUCTIBLE on claims. Sometimes a medical insurance provider will accept new clients at any age but most place upper limits at 65-75 years old.

Once you are in a health insurance plan, the health insurance UK cover provider usually continues to offer cover, year on year, albeit at an increasing premium with age. If you leave a Company or Group health insurance scheme, and therefore need to look for a private health insurance plan, most healthcare insurance providers will offer you and your family medical insurance plan cover / family health insurance, but it may be on differing conditions and different premiums.

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In choosing affordable medical insurance plan it is very important that you understand the terms on which a private health insurance company offers health insurance so that future claims and treatment are covered, or not. If you have a current personal medical insurance plan but wish to change to another medical insurance provider, for instance seeking cheap medical insurance, additional cover or simply because you have suffered poor claims administration, then you may be offered, by an independent healthcare advisor, a "no worse terms" plan or Continuing Personal Medical Exclusions (CPME) health care insurance plan. This simply means that the underwriting company of the new health insurance plan, will accept offering you cover on the same terms as the previous medical insurance plan. If you have had health insurance claims and particularly exclusions from cover, these too will be carried forward or considered by the new health insurance plan provider. The CPME transfer method allows for continuity of medical insurance cover, particularly if you are presently undergoing treatment or have had treatment in the recent past and are concerned as to a re-occurrence of such a medical problem.

For example, if your company previously had PPP private health care cover and you left and decided to seek low cost medical insurance cover / family health insurance for yourself/family, you may have found PPP's private health care cover too expensive and, seeking cheap health insurance, discovered that you could transfer your existing plan to The Permanent Health Company on a "no worse terms" or CPME basis. A word of caution here, many sales people in the healthcare insurance industry earn money via a commission system and may suggest that you transfer to another health insurance company in order for them to secure a new commission, this is called "churning" in the Healthcare Industry.

The most frequent way to obtain a cheap health insurance plan is by a Moratorium. Providing that you/family are fit and well, with any pre-existing conditions being in the dim and distant past, then this method of taking up private health care medical insurance can be a very cost effective way of obtaining cheap medical insurance. It is vital that potential purchasers understand what Moratorium means. Whilst you may obtain affordable health insurance, your past medical record may exclude you from some of the benefits of health insurance cover in certain areas. Your pursuit of cheap health insurance should not lead you to accept cover that is inadequate for your requirements.

When a private health insurance company offers such affordable health insurance plans, they are taking on health care insurance clients without them disclosing medical history. This has both advantages and disadvantages which have to be carefully weighed up. For example, if you had a benign growth removed last year and took on a Moratorium Plan, then 18 months into your new Plan cancer was diagnosed, this could mean excluded cover under Moratorium due to the previous benign condition being a pre-existing condition of less than two years. Some health insurance companies, such as OHRA will offer applications against a full medical questionnaire, thus giving you an alternative to the Moratorium route.

Which hospitals may I use for my treatment under a health insurance plan?

In the United Kingdom, medical insurance providers offering private health insurance cover have adopted a system of grading hospitals. Generally this categorisation is to levels A, B or C, with 'A' grade hospitals being the best and most expensive. Lists of hospitals covered under a PMI Plan are usually available with any quotation and should be studied carefully before deciding. Some health insurance companies have their own or preferred hospitals for use under their health insurance plan, which may not suit you. It is important to consider the distance, reputation and range, across the country, of hospitals offered by your potential PMI insurance company.

Benefits and exclusions

This is probably the most vital area of reading under a personal medical insurance plan after the Moratorium Clause is understood. All private health care insurance company policies carry a list of general exclusions from cover and some companies exclude more or place financial limits on certain benefits offered, particularly benefits such as routine dental cover or maternity cover. The most common exclusions are

• Alcoholism or drug abuse
• Dental treatment
• GP services
• HIV or AIDS
• Hazardous sports
• Infertility
• Normal pregnancy
• Sterilisation
• Treatment Overseas
• Cosmetic surgery

In addition to any general exclusions, private health insurance companies may apply specific exclusions to health care insurance or a health care cash plan depending on the people who you wish to have covered in your health insurance private cover. If information on the application form names medical conditions which you have recently suffered from, often going back 5 years, a private health insurance UK provider may exclude such conditions from cover or qualify such cover.

What will affect my health care insurance premium in the future?

All of us would like to be able to obtain cheap medical insurance, and it is perfectly reasonable for you to look at all available low cost medical insurance options. After weighing up all the options available to you, it is important that you don't just settle for cheap medical insurance solely on the basis of premium price. Rather, you should opt for the most affordable personal medical insurance to suit your needs. You may have decided upon a cheap health insurance cover plan and know the present premiums, but how much will they be next year, or when you are 65 years old? At 40 years old, you may easily be able to afford a Comprehensive Plan, with all the "bells and whistles". However, when you retire and are 65 years old, the sort of cost of premium you will be asked to pay may not appear to be cheap health insurance! Could you afford it? Private health care costs are expensive as treatments become increasingly more sophisticated with new drugs and technology available. Companies providing private health cover increase premiums annually in line with MEDICAL INFLATION. Government legislation also affects personal health insurance premiums particularly if tax incentives to plans are either allowed or excluded. For all of these reasons, cheap medical insurance is becoming increasingly difficult to obtain.

Premiums for health insurance cover are clearly affected whether or not you take out a Standard Hospital Plan or a Comprehensive Plan. You may be able to source a relatively cheap private health insurance plan through a discounted price by agreeing to a VOLUNTARY EXCESS or by paying annually rather than monthly. No claims discounts may also be offered and clearly claims do make for more expensive health insurance plan premiums in the long run. It may be noted that cheap health insurance is harder to source as you get older. Personal health insurance premiums for those above 65 years old generally increase faster to 70 years old and beyond, rather than say from 25 years old to 30 years old.

Advisors at Medibroker Limited, an Independent PMI/PHI brokerage, aim to provide our clients with affordable medical insurance and will seek the cheapest health insurance cover to suit the client's needs. We generally advise clients over 60 that their pursuit of cheap medical insurance is not likely to be met by taking up new Comprehensive Plans but to take out a Standard Plan only with an excess. The costs simply grow so fast after that age that it becomes almost non viable to take out a new personal medical insurance plan which offers Outpatient care over the age of 70. Health Care Cash Plans are now available to support such Standard PMI Plans and can give a substantial support to elder citizens for routine Outpatient cover, dental and optical costs. A comprehensive health care insurance / cash plan is far more appropriate, for example, for a married couple of 35 years old, both working, with three small children, aged 5, 7, and 10 years old.

Do I need to provide health evidence to take out PMI?

As mentioned earlier, there are a number of conditions for which you will be unable to get PMI cover. In addition, your private health insurance company will not automatically offer cover for previous illnesses or treatment you have had or are in fact still being treated for. These are called PRE-EXISTING CONDITIONS.

Personal health insurance providers may sometimes ask for a medical history questionnaire to be completed and signed or may write to your Doctor, or ask you to undergo a medical examination.

Medical background information can often be vital to prove veracity (or not) of future claims under a health insurance plan. If you are unsure, then declare the medical background to your private health insurance UK provider at the time of application. If you have a medical condition which is likely to re-occur, the health insurance provider will probably exclude that condition or charge an additional premium to cover it. Thus your Plan offer may be on the basis of a CPME transfer, for example, from your company scheme, when you leave.

The second method of application for personal health insurance cover does not require, at the time of applying, any evidence of health, but simply proceeds on the basis of a Moratorium regarding any pre-existing conditions. This Moratorium may be allowed to expire after a period of usually two years when you have not had treatment nor advice for that pre-existing condition, bringing it under cover in year three. A chronic condition would be probably permanently excluded under this type of health care insurance Plan. These private health insurance plans are quicker and very simple to take out but caution is necessary when considering what treatment you have had in the past five years and whether or not such conditions may re-occur. Sales people should be asked to clarify Moratorium terms particularly how far back the healthcare insurance company considers pre-existing conditions.

What happens when I need to make a claim under my personal medical insurance?

All health insurance private companies providing private health cover - be it individual or group health insurance - will pay valid claims, it is in their interest to do so. They will not pay invalid or fraudulent claims or claims which are outside the cover your particular Plan might offer. It is always better if treatment is needed, to contact your healthcare insurance provider's client service department who will quickly assist with advice and support for claim administration, which hospitals are to be used, specialist help etc. Some personal health insurance cover providers pre-authorise all claims so that you do not have to pay doctors' and hospital bills but leave all settlement to the insurance company itself. If companies do not pre-authorise, then original bills will be requested with a claim form submission.

A private health insurance company is only as good as its claims record and underwriters. Always check the credentials of the underwriters and the record of the company regarding claims. Check out the background of the personal medical insurance provider with the appropriate professional institution and Association of British Insurers. If your complaint or claim is not satisfactorily dealt with, two useful addresses follow. Private health care insurance is not about glossy magazines or impressive benefits lists. It is only of use when you need to use it.

FINANCIAL OMBUDSMAN SERVICE
South Quay Plaza
183 Marsh Wall
London E14 SIR


THE PERSONAL INSURANCE ARBITRATION SERVICE
24 Angel Gate
City Road
London EC1V 2RS

Tel 0171 837 4483

Advice and brokerage

If you take or seek advice about health insurance cover from a personal health insurance broker or healthcare insurance advisor, ask if they have professional liability cover and are genuine independent advisors and not tied agents or simply direct sales people on commission from one insurer. There are many sound professional private health care insurance advisors who will offer best advice. These brokers usually have agencies with more than one medical insurance provider and can offer you a wide range of different benefits and premium structures. Generally, in considering health insurance cover issues, it is better to ignore brand name and product title and to concentrate on companies' track record for claims, service and premium increases over time. It is always in your interest to read the documentation carefully as there can be little worse than becoming ill, then finding that the cover you thought you had, is invalid.