The latest official figures might show Britain’s economy is now in recovery, but the cost of living is still a major concern for many people.

A survey[1] conducted by Sovereign Health Care found almost half of Britons have avoided necessary dentist or optician visits in the last 12 months because they’re worried about the cost of treatment. The survey also revealed 75 per cent of people have never heard of health care cash plans, or don’t confidently understand how they differ from private medical insurance (PMI).

Unfortunately, this lack of understanding means many people are struggling to pay for health care treatment, without realising that financial help is within easy reach.

This blog post examines how health care cash plans differ from PMI, and explains how they can help make everyday health care costs more affordable.

Private medical insurance (PMI)

Private medical insurance is designed to cover the cost of private medical treatment for ‘acute’ conditions that require short term treatment. Chronic conditions that are long term or slow to develop are unlikely to be covered.

PMI often covers, or at least contributes towards, the cost of treatment and care provided by the private health care sector and the exact details of what is covered will vary from policy to policy. Standard policies tend to cover different types of hospital care, surgery, nursing and consultations while comprehensive policies cover a wider range of care and treatments.

Although the costs of specific medical procedures are generally known in advance, it’s difficult for both the policyholder and the insurer to predict when a medical condition will arise and how serious it will be. This unpredictability means that PMI can be costly.

The average private health insurance premium has increased by 66 per cent in the past decade to around £135 a month[2], putting cover way beyond the pockets of many people. These costs will differ from person to person based on their own health, medical history and lifestyle.

One of the main exclusions for PMI cover can be pre-existing conditions. Another drawback is that that not all medical conditions are covered by PMI or if you have a specific medical condition that is uncommon, you may need to pay a higher premium in order to be covered for it.

Health care cash plans

Whereas PMI is generally considered a safety net for more serious, short term medical conditions, health care cash plans are designed to be used regularly and help people meet those expected and unexpected everyday health care costs.

Whether it’s for NHS or private treatment, health cash plans allow policyholders to claim back a percentage of their costs for things such as glasses, contact lenses, dental check-ups and treatment and hospital stays. Treatments such as physiotherapy, chiropractic, acupuncture, reflexology and chiropody are often covered too.

This can help make many types of health care treatment more affordable and accessible, particularly for those individuals and families who may be struggling to stretch the household budget. Some health cash plans cover children for free when you take out an adult policy and offer the option to cover your partner and other family members.

Health cash plans generally cost significantly less than private medical insurance policies; from as little as a couple of pounds a week. Premiums are the same regardless of how healthy or unhealthy you are and unlike many other insurance products, premiums don’t go up because you make a claim.

[1] OnePoll survey of 1000 UK adults aged 18 and over, May 2014.
[2] Passport2Health, 2012.

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