Factors to consider when choosing a health insurance policy

How to choose health insurance

July 31, 2015

Not that many moons ago private health care was the preserve of the rich and/or famous, while the rest of us had to take pot luck with (an exceptional, but historically stretched) National Health Service. But then along came a succession of private health care groups which made these plans far more accessible (financially and geographically) to Joe Public, whilst at the same time more companies began offering medical insurance packages as part of their employee perks.

Fast forward a few years or so and private healthcare industry is now seen as a key partner to the NHS in various departments, and which often sub-contracts medical consultations and procedures out to. Today some 10% of the UK population opt for private medical insurance, whilst upwards of 1 million operations are privately-performed each year.

With private health insurance therefore being more plentiful than ever before, it would be all too easy to plump for the first decent-looking policy that fell on our laps, rather than shopping around. Plus, there’s the not inconsequential first step of determining just what YOU want your health insurance plan to do for you.

With this in mind we’ve researched and drawn up a shortlist, if you like, of the main factors to consider when choosing a health insurance policy. A rapid-fire guide to the quintessential elements of private medical plans which must be established between would-be policyholder and insurance provider from the very start.

But before we do, let’s remind ourselves of the acknowledged advantages of health insurance, and therein why it’s imperative that we seek out a package which works best for our individual requirements.

Health insurance is far more attainable and affordable than ever before

Firstly, by acquiring health insurance you can pretty much guarantee that you’ll be seen quicker at NHS hospitals, essentially making timely in-roads into notorious waiting lists, which in turns potentially means you’ll receive prompt treatment. With regard to this, it should also result in being able to choose which hospital you wish to attend and even earmark a particular consultant to carry out the diagnosis/subsequent procedure.

In addition to this you’ll also bag yourself a private room in a hospital or clinic, rather than settle for a bed on a public ward; potentially even getting your own en-suite facilities in some cases. What’s more, the possibilities of being granted access to medications and treatment that might otherwise be off limits from an NHS perspective could present themselves, should you venture down the health insurance route.

So, addressing these ‘factors to consider’ and the one which should always appear at the top of any such list is that of ‘which type of health insurance policy’ you wish to go for. There are, ostensibly, five predominant branches of private healthcare available to the general public, namely individual health insurance, family health insurance, child health insurance, joint health insurance and health care cash plans.

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While the first four are more or less self-explanatory (in terms of who is covered), the fifth refers to a monthly premium-based package, whereby if you receive medical treatment you’ll be reimbursed by your insurer on a one-job-at-a-time basis, providing you supply them with a receipt for the health work undertaken. As opposed to the aforementioned examples which require an annual premium to be paid by the policyholder.

What sort of bang do you want for your health insurance buck?

Once you have determined who (and how) you wish to arrange health insurance cover, then you must then find out precisely what that package comprises of. This is the point at which you usually start asking the questions below.

Obviously personal budget restraints come into your thinking from the outset, however rest assured that there are numerous policies ranging in prices and payment plans to suit all pockets. Suffice to say, the more you’re willing to put in, from a monetary stance, then the more you’re likely to get out of your health insurance plan, in relation to access to more expansive services; which mirrors life for all intents and purpose.

Rudimentary features of the entry-level policies which you SHOULD be keeping tabs on are ‘in-patient treatments’ (where the policyholder is normally covered for being hospitalised for a couple of nights), ‘day-patient treatments’ (safeguarding in the event of attending a hospital or clinic as a day patient, yet which doesn’t exceed a whole day and ends up in hospitalisation) and ‘out-patient treatments’ (which habitually extends to visits for consultations, diagnosis, investigations and procedures which don’t necessitate the policyholder being hospitalised overnight).

Next we should concentrate on the nitty-gritty of health insurance policies and ask the most pertinent questions of the provider, to ascertain just what’s what and ultimately so as to identify the package which we can tailor-make around our individual needs.

Health insurance factors to consider…

What does the policy cover?

Typically you should be looking for all fees (including private hospital, specialist’s and consultation), the costs of diagnostic tests (X-rays, scans, ECG, MRI, CT, etc…), radiography and chemotherapy, specialist referred physiotherapy, osteopathy and chiropractic and extensive cancer cover.

What are the exclusions?

For the most part this will concentrate on pre-existing conditions. So if you’ve a history of a specific and serious illness having presented previously, or have a family history of a particular condition – then the chances are you’ll be refused a health insurance policy. Plus there’ll often be other highlighted conditions or specialist treatments which will be excluded.

What level of cover is right considering my circumstances?

Individual choices of health insurance policy differ from person to person and require a cross-section of aspects to be factored in. These more normally include your budget, whether you would like an excess, the decision to encompass an outpatient add-on (to cover X-rays and blood tests, etc), as well as earmarking any particular hospitals or clinics you would wish to attend. Remember, you can boost existing cover as and when required, with the inclusion of excesses and six-week wait clauses being among the most popular.

Is there a compulsory or voluntary excess?

Compulsory is the figure set by the health insurance policy provider which is an immovable object, whereas an excess is dictated by the policyholder and works along similar lines to the excess referred to with other types of insurance such as motor, home, travel, etc. The reality is, the greater the figure that you agree to contribute in the first instance in the event of filing a claim against your insurance (and subsequently being successful), the lower the annual premium as a direct result.

Does this policy build up a no-claims discount?

Many do, however be warned that unlike their other insurance type counterparts, the policyholder could potentially come a little unstuck by opting to have this written into their bespoke package. For the simple reason that should you make a claim you automatically drop down a few rungs on the NCD ladder and your premium rises when it comes to renewal time. However, should you look to switch your health insurance at this juncture to an alternate one offering a better deal on paper, remember that in any new insurer’s eyes you now have a pre-existing condition which you’ve claimed on. Which, hypothetically risks making you un-insurable.

Should I go for a moratorium or a fully-underwritten policy?

By choosing moratorium underwriting this means that you can avoid disclosing any previous health conditions (suffered during the 5 years leading up to this point) to a new insurance provider, compared to the more conventional fully-underwritten policy which has the right to decline anyone on the ground of a pre-existing condition as we’ve alluded to above. Although quicker to set up and potentially affording the policyholder to figure in cover for pre-existing conditions after a 2 year stand-off period, moratorium fails to deliver peace of mind and certainty when it comes to conditional cover for a variety of future health implications.

Will my age be a stumbling block?

While age won’t obstruct a person arranging a health insurance policy, the younger (and fitter/healthier) you are at the onset of it the more cost-effective it will be, derived from the underlying fact that statistically-speaking you are then less liable to fall ill and consequently claim on the insurance package.

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The older you are, the more chance that you may have developed recurrent health issues which may well compromise your ability to be offered certain plans.

Is home-nursing included?

You may well one day need to convalesce after a major medical procedure and not wish to spend a lengthy passage of time in a hospital environment. Therefore opting for home-nursing add-ons will enable you to recuperate in the comfort and familiarity of your own home, courtesy of regular visits from qualified and experience health visitors able to perpetuate your recovery remotely.

Is dental and optical care part of the health insurance policy?

Always worthwhile considering having these two options, as unforeseen and complex dental procedures can often require hospitalisation, whilst a number of optical treatments also call for attendance in a broader clinical surround on occasion. What’s more, this feature can be used to cover any routine dental check-ups and optical fees that you have during your policy period; although you may be liable to pay an excess.

Is physiotherapy covered?

Again, and while recovering from an operation or clinical procedure, it may be that physiotherapy is a key part of the post-op phase, which could end up both expensive and more enduring than it need be if you don’t have the necessary health insurance in place to fast-track this part of a recovery programme. Could be of particular use if you participate in sports on a regular basis, as such treatment is not covered by the NHS.

Will this plan protect me for psychiatric treatment?

This division of medicine can become very expensive, and once more you might be dependent on unaccountable waiting times if you don’t have the suitable health insurance in place, so for reason makes sense to opt-in. If you’re diagnosed with a psychiatric condition, including clinical depression or schizophrenia, you could get cover for both day-patient and in-patient treatment.

Am I covered for chronic conditions?

The probability of this is close to zero, as health insurance providers have a tendency not to protect against a disease, illness or injury which has a propensity to continue indefinitely, is highly likely to return and/or has no known cure.

What – if any – cancer drugs and treatments are funded by this cover?

Certain health insurance plans might afford the policyholder access to what’s colloquially described as ‘proven eligible cancer drugs and treatments’, providing that there’s good quality clinical evidence to support its administering and is fully licensed by the European Medicines Agency in connection with a specific condition, in addition to being included on the health insurance company’s list of advanced therapies and specialist drugs.

What about experimental cancer drugs and treatments?

This is usually offered at the discretion of the health insurance policy provider.

Will this cover provide financial assistance towards the costs of medical investigations and initial diagnosis?

Again, a very important aspect of health insurance which needs determining from the outset so you know exactly where you are going forward.

Which hospital networks do you offer?

Due to the well-documented postcode lottery which affects what some health authorities can and can’t fund, it’s possible to earmark certain hospitals as part of the more far-reaching health insurance packages, while availability and waiting lists for procedures also can work in a policyholder’s favour by being given the power to select a destination albeit from a governed choice.

Can I add other family members to my health insurance policy?

As discussed above, there are various types of health insurance policy to choose from, some more geared up towards couples and families.

Will I be covered while I’m abroad?

A key factor for many, it’s imperative that you discuss the likelihood of you being offered medical treatment abroad – free of charge – as part of a potential health insurance policy. Again, the spiralling costs associated with seeking healthcare overseas has been widely published in recent years and so to guard against being exposed to this it’s worthwhile to secure a plan which envelopes this type of proactive feature.

Does it have a six-week wait feature?

An interesting add-on to mull over, as it effectively means that if the NHS waiting list is less than six weeks in duration for a specific treatment, you could have it done on the NHS; whilst conversely if the period exceeds this sex week benchmark, then the policyholder will be covered privately as an alternative.