Monday 27 February 2017

Are health cash plans worth paying for?

Dermot Goode

Dermot Goode
Dermot Goode

The May Day private health insurance deadline has passed. Most of those aged 34 or over who did not sign up to insurance before then will have to pay more for cover now. Health cash plans aren't affected by the recent health insurance changes - so the cost of these will be the same as before. But are they worth the money?

The first thing to understand is that health cash plans are not health insurance. Instead, they are designed to cover your everyday medical expenses such as GP, dental, optical and physiotherapy bills.

Cash plans are not the solution if you want full cover for hospital bills, access to private hospital services - or if you are worried about bypassing public hospital queues. So if hospital treatment is your priority, you need to have either good private health insurance in place or a large wad of cash on deposit that you can draw on if needed.

Cash plans are, however, worth considering if you can't afford private health insurance or if you're happy to rely on the public system for hospital treatment.

You can buy cash plans from VHI Healthcare, Laya Healthcare and GloHealth - as well as the specialist provider, HSF Health Plan.

The HSF 'Extra Cover Schemes' provide the best value as most benefits are fully covered up to the policy limit. Take the Family Direct (FDA) scheme at €678 per family. This covers all optical and dental costs up to €500; physiotherapy and other practitioners up to €700 and all specialist visits, scans, and health screening up to €1,100.

This plan also gives you €80 for every night spent in hospital up to 40 nights per person, per year. So, if you're looking to cover the €75 public hospital charge in addition to all the other benefits, this plan potentially ticks the box. As the cost of basic health insurance is approximately €1,000 for a family with few of the above benefits included, it's food for thought.

Like any insurance product, there are pitfalls with cash plans. Waiting periods apply for pre-existing conditions just like health insurance. However, if you are cancelling your health insurance and you transfer to a HSF health plan, you will be covered immediately.

Otherwise, certain benefits such as dental, optical and GP cover kick in after three months - though there are often promotions where the initial waiting period is waived for all new members. There is also a waiting period to be served before the maternity or adoption grant will apply. Like any insurance product, examine the terms and conditions of the plan and check everything in advance of any treatment.

Given that 300,000 people have left private health insurance, health cash plans have become more popular. Unlike health insurance, the cost remains fairly static and everyone benefits even if they only have one expense over the year.

With cash plans, you should be able to access primary care services and get an early diagnosis rather than waiting months for an appointment while you worry or suffer in the interim. In many cases, your condition might be treatable on an out-patient basis and a hospital admission may not even be necessary. The really smart consumers are integrating mid-level health insurance with a quality health cash plan to give themselves the best overall cover without overspending.

Dermot Goode is health cover analyst with totalhealthcover.ie

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