False economy

Are ways to cut their cover really what clients want, asks Debbie Kleiner-Gaines, managing director of Best Health UK

In the current economic climate medical insurance providers are frequently pressed for creative and innovative ways to reduce client spending. And yet, in spite of the ever-increasing number of people turning towards budget policies and employing cost saving measures, I doubt the efficacy and relevance of such plans.

Whether the result of personal experience or extensive media coverage, investments in private health insurance are frequently driven by some form of dissatisfaction with, and subsequent lack of confidence in our public health service.

Having shelled out year on year to avoid NHS waiting lists, receive treatment in the most comfortable surroundings, have access to a wider range of drugs than those currently available on the NHS and ensure prompt diagnosis and treatment, imagine how it would feel, in the event of an illness or injury, to discover that your policy was, in effect, irrelevant.

Over recent years I have encountered increasing numbers who, encouraged by the price, have inadvertently opted for a limited health insurance policy. But as with anything, reduced costs usually mean cutbacks elsewhere.

Unfortunately, in the case of medical insurance, the limitations of cover are frequently unclear and misunderstood.

The cost of medical insurance can be brought down in a variety of ways. As is the case with all insurance policies, you can opt for an excess as large as £500 which, in return can reduce your premium by up to 50 per cent.

Alternatively, you may decide on a budget policy with minimal outpatient cover or even implement a ’six week’ option.

And, although all of these options may fit the needs of one person, the implications could be critical for another.

At a time when NHS waiting lists continue to fall and medical treatments are increasingly carried out as outpatient procedures, I am frequently led to question the value of these ostensible ’cost-saving’ plans.

My doubts were reconfirmed this week as a Best Health client who had insisted on implementing the six week wait as a means of reducing his premium came face-to-face with its shortfalls.

Put simply, budget health insurance plans are great should everything go to plan. However, in the event of an illness or injury, medical insurance providers will, more often than not, find a hidden loophole in order to avoid paying out claims

The client, who had invested in private health insurance over a number of years, was recently diagnosed with cancer. The six week option on his medical insurance policy coupled with the recently introduced 31 day diagnosis to treatment limit for cancer patients meant that both surgery and chemotherapy admissions throughout the duration of the client’s treatment would be carried out by the NHS.

Yet more worrying for this client was the prospect of being subjected to the ’postcode lottery’. Having being recommended cancer drugs which were not available on the NHS in that particular area, provision of these drugs under his long-standing health insurance policy became entirely subject to the opinion of a given specialist.

Without the six week option, this client would have had the opportunity to access an extensive range of drugs which are not readily available on the NHS, many which have been licensed for use in Europe but have not yet been approved by Nice, largely based on cost.

With each insurer holding a slightly alternative stance regarding the provision and duration of cancer treatment along with many other medical procedures, I would strongly recommend seeking the advice of a specialist prior to committing to a particular insurance provider or policy.

In effect, it seems that in opting for a ’cost-saving’ policy, a small monthly saving could prove costly in the long run. And such is also true of budget policies offering limit or no outpatient cover.

The recent government push to provide the majority of standard procedures as outpatient will continue to limit the value of such plans. From physiotherapy to ECG scans, NHS waiting lists can be lengthy or, should you choose to go private, these treatments can incur high one-off costs. What’s more, the exclusion of initial consultations could dramatically limit the chance of a swift diagnostic which will undoubtedly impact the speed of both your treatment and recovery.

Put simply, budget health insurance plans are great should everything go to plan. However, in the event of an illness or injury, medical insurance providers will, more often than not, find a hidden loophole in order to avoid paying out claims.

If you are worried about the level of cover that your existing medical insurance plan provides, or are considering investing in private medical insurance, it is advisable to speak to an independent and impartial broker in advance to ensure that you know the good, the bad and the ugly of both the insurance provider and your chosen plan.