Health Insurance Explained
The NHS was formed in the late 1940s with the core belief that good healthcare should be accessible to all, not matter how wealthy an individual is, or isn’t. As a result, it’s not necessary for United Kingdom resident to buy private health insurance to receive vital medical care to maintain their well-being.
Apart from a few exceptions like prescription, dental care and optical care, the NHS is a free service at the point of use. It currently serves around 65 million people in the UK and costs roughly 10% of GDP to operate. Despite receiving a lot of criticism over the years for a number of inefficiencies in the system, it is still ranked amount the best universal healthcare systems in the world.
Why do people choose to have private health insurance?
By taking out a private health insurance policy you can bypass a lot of the major concerns associated with the NHS.
Accessibility of treatments, waiting times and coverage are some of the major critical talking points of the NHS. Collectively, these points can result in a less than satisfactory experience for patients going through the national healthcare system.
So, what exactly is the problem?
- Accessibility – As there is no price mechanism to affect demand and supply for healthcare so medical priority is used to control the flow of patients seeking higher course of treatment. In this situation the GP is given the primary responsibility to maintain the patients access to treatments. Without a referral from a GP is it extremely unlikely that further treatment is going to be accessible.
- Waiting times – Once a referral is made the average waiting time to be seen is 18 weeks. In theory, treating patients based on medical priority is a much fairer system that allows patients in critical condition to be seen quicker. This also means those thought to be less serious can get pushed back.
- Coverage – This refers to the availability of certain treatments. In some areas of the country certain treatments and medicine aren’t available to patients because they’re not economical. This is commonly referred to as the postcode lottery.
Buying private health insurance offers three main advantages:
- Shorter waiting times
- Quicker diagnosis
- Better medical facilities, like private rooms
What is health insurance?
Some treatments and medicines won’t be available on the NHS and would be too expensive to pay for them directly. The primary aim of health insurance is to give a bit of extra security and comfort people, with the knowledge that it’s possible access specialist medication and treatments, if needed.
There are many reasons why some people choose to pay for private health insurance. You may be concerned about the level of care you’re likely to receiving, other may worry about the time it takes to be seen. In any case, it’s important to understand your personal reasons so you can choose the right policy. There are many different healthcare policies out there, each offering a different type and level of cover.
How health insurance cover works?
The way health insurance cover works, and the way payments for treatments are made will vary from insurer to insurer and, to a certain extent, will depend on the hospital of clinic providing the care.
In some cases, the hospital or clinic will invoice you for the treatment which you’ll then have to forward to your policy provider. In other cases, the insurer will be billed directly, which may require you to provide your reference number, scheme details, and pre-authorisation documents.
To be certain you’re fully covered for the procedure you need, first get approval from your insurer to be sure your health insurance covers what you need. Also, make sure you fully understand what is and isn’t covered so there are no nasty surprises or unexpected financial burdens.
What is covered by health insurance
This again really depends on the insurer and the policy taken out. Different policies will offer a different level of cover.
In generally, you can get health insurance policy to cover:
- Medical treatments
- Surgical procedures
- Radiotherapy and chemotherapy to treat cancer
- Access to a medical professional when needed
By shopping around, it is possible to find the right insurer and customise the best policy to meet your needs.
To fully understand what’s included in any health insurance it is vital to get the details of your policy in writing from the insurer.
What isn’t covered by health insurance
There are some instances where health insurance won’t cover certain treatments. These include:
- Pre-existing conditions – any condition that existed before the policy was taken out
- Chronic, long term or recurring conditions
- Non-medical – treatments that aren’t essential to body function or preserving the quality of life
- Cosmetic surgery – it’s unlikely for health insurance to cover cosmetic surgery unless it is also a medical procedure that Improves function and quality of life
Designing your cover
As you’re buying health insurance you will be able to customise and tailor your policy to meet your needs. This will give you assurances and help you find the peace of mind you deserve.
Many health insurance products will give you the option to add different levels of cover. These options include:
- Out-patient Cover
- Comprehensive Cancer Cover
- Mental Health Cover
- Therapies Cover
- Differing Excess levels
- Hospital lists
This gives you the flexibility to select what you deem are the most important options. If, for example, cancer is a concern, you can tailor your policy to cover these needs. The ideal policy for cancer would include cover for treatment such as radiotherapy and chemotherapy, surgery, access to higher costing drugs.
If on the other hand you’re happy to get cancer treatment on the NHS, but want to make sure the diagnosis is done quicker you may choose to only add out-patient cover to your policy.
Claiming on your healthcare policy
Some insurers will offer a no claims discounts but, like many other types of insurance, making a claim can effect the cost of your policy when its’ time to renew.
The only way to really keep the cost of health insurance down is to build up no claims, which can only be done by not claiming.
Checklist to make sure your procedure is covered by health insurance
- Contact insurer directly and find out what coverage you have
- Get a detailed estimate, with cost predictions for your surgery so you can review this against your policy coverage
- Find out what your excess would be in the event of coverage
- Find out what the maximum payable amount is, and if they expect you to pay a certain percentage of the procedure
- Find out what related medications like pain killers would be covered
- Get the details in writing of your coverage so you are not surprised. Never assume anything is covered unless your insurer confirms it.