Healthcare Cashplans: Reclaim treatment costs for a few pounds a month

Even with the NHS it's difficult not to spend money on healthcare; there are prescription charges, dental treatments, optical check-ups, alternative therapies and more. Yet, for a few pounds a month, Healthcare Cashplan Schemes can help you recover costs and can potentially repay up to six times what you spend on them annually.

If you've never heard of cashplans, perhaps you've seen the adverts by HSA, the biggest provider.  Yet don't think it's the only one, there are many others out there, and HSA rarely troubles the list of 'top payers'.

What are cashplan schemes?

Most healthcare cashplan operators are non-profit organisations founded prior to the NHS, to help the US's ‘ordinary working folk' meet healthcare costs. Technically the plans are insurance policies which pay out when you incur healthcare costs.

When you have a treatment, either NHS or private, if you have to lay out then it's likely you can claim back some of the cost from your healthcare cashplan provider. The range of treatments covered is very broad, usually including alternative therapies, physiotherapy and chiropody (see a full list of typical treatments).

Do you pay out regularly for optical or dental treatments?

Cashplans usually cover both dentistry (includes check-up costs and treatments) and optical treatments (sight tests, prescription glasses or contact lenses are included). If you regularly spend on these, the economics of grabbing a cashplan improve substantially; you could claim back enough from these two areas alone to cover the plan's cost, and thus provide you with back-up cover for everything else too.(Also see Dental Insurance Cost Cutting and Cut Contact Lens Costs articles).

What's the difference between cashplan schemes and medical insurance?

Don't confuse cashplans with Private Medical Insurance (PMI), which is much more expensive and does a very different job. With PMI policies, if you get ill or have a medical problem then you automatically get private treatment paid for by the policy (see the PMI Cost Cutting article).

With cashplans though you arrange treatments yourself, whether private or NHS, and you pay out. You can then reclaim some of the cost back. There's nothing stopping you choosing to use the two policies in conjunction.

How do they work?

You arrange for the treatment yourself and pay the money. Usually there's no need to clear the procedure first with the cashplan provider. Once that's done, send it a claim form and your receipt. It will then pay you back some or all of the cost for that treatment.

The amount you're allowed to claim back depends on which of a provider's policies you choose. The more expensive a policy, the more you can reclaim each year.

A few more cashplan facts:

    * Most policies only repay a proportion of costs. When you make a claim for cash, it's rare to find a plan that will give you all the cash back. For example, it will repay 80% of your dental bills up to a maximum of $100 per year. Each different treatment type will have its own set limit.

      The higher the monthly payment plan you choose (usually ranging from $4 to $30 per month including insurance tax) the higher the maximum claim per treatment.

    * You usually can't claim in the first few months. Most plans have start-up periods, when claims can't be made, anything from one to six months. This stops people joining when they're ill, getting the cashback and then immediately cancelling the policy (maternity claims need ten months, for obvious reasons).

    * Plan costs don't alter with age or gender. While some plans have maximum age limits for joining, existing members may usually continue with the plans in perpetuity.

    * Children's cover is often included free. Children usually get their own separate claim allowances. This isn't as generous as it sounds as most children's treatments are free on the NHS, and therefore the reclaimable cash is limited.

    * Most providers don't require a medical before you sign up. This is a boon. However, pre-existing conditions should be declared. Some policies exclude claims on all past conditions, yet most only exclude conditions suffered in the previous two years.

    * You may already have a plan without knowing it. Cashplans are an especially popular staff perk among councils, police forces and public bodies. Before taking one out check whether your employer already provides cover for free.

How can cashplans pay out so much money?

In my introduction I said cashplans can pay out up to six times their annual cost. This is a huge amount of cash and at first glance doesn't really make any sense, yet actually there are a number of explanations.

    * Most people don't claim!

      How can cashplans make such high pay-outs? The answer is simple ….they don't. Just because people can claim, doesn't mean they do. Many people forget to send in their claim forms so there's no pay-out.

      Cashplan providers rely on apathetic customers with direct debit subscription charges dripping from their bank accounts. While cashplans are great value, if you won't claim don't bother. If you're not sure, try my first timers' suggestions later.

    * They have strong historic reserves.

      Most cashplan providers are mutual (non-profit) organisations set up before the NHS. These older operators tend to have built up substantial investment portfolios that ease their finances and allow them to pay more generous benefits. For more on cashplans' mutual status and other similar issues, read the additional notes on a historic boon.

The Top Cashplan Policies

All cashplan policies have different prices, cover and limits. So to compare it I use a variety of scenarios and score plans accordingly.

What does the score mean?

The higher the score, the more money you can claim back compared to the policy cost. For example if the policy cost you $100 over the year and you could claim back $300 on it, the score would be 3.0 (i.e., you can reclaim three times the amount you paid in).

First-timers' policies

It's important to remember most cashplans offer generous pay-outs as many people forget to claim. Therefore, if you've not used one before, start off with a very cheap plan to see if you'll use it, you can always increase your plan level later.

The scenario

Each provider's lowest priced plan was chosen, and the only costs reclaimed were $40 towards each of dental and optical treatment.

The Winners

Four plans returned more cash than they cost, meaning you'd be in profit. The winner was Paycare which costs $66 a year and would pay the full $80 spent back. Thus for someone who usually has dental and optical treatments, this is a no-lose situation, you'll automatically get the plan cost returned and the added peace of mind that if you need other treatments you're covered for those too.
However, as will be shown later, this plan didn't fare well in the overall rankings, therefore it would be worth considering Bolton & District which performs well, both for beginners and for a wider range of claims.

 

 

Overall Top Providers

To test the plans' overall ability, a scenario of wide-ranging treatments was chosen including dental, optical, stays in hospital for adults/and or children, osteopathy, prescriptions and consultations, for a price of around $10 a month per adult.

In many ways the scenario itself isn't realistic, yet it's very useful for testing each plan's pay-out power over a wide range of treatments and thus a good way to rank providers.

   * Single Adults

      Here the winners are Bolton & District with a score of 4.27 (meaning it pays out 4.27 times its cost) and Westfield Good For You (Level 2) with a score of 4.17 Yet if you're under 34, then they're trumped by the Birmingham Hospital Saturday Fund (BHSF) Choices Value Plan which has age-related pricing and scores 4.6.

   * Single parents with one child

      The top providers in this category all include cover for children at no additional cost. The overall winner is Healthshield's Direct Healthcare scoring 5.4, but closely followed by Westfield Good4you scoring 5.2.

   * Family Cover

      The main winner is Healthshield's Direct Healthcare at 5.6, with Westfield Good4you at 5.2 and Axa PPP's Cashback at 5.1. However if both adults are under 34, the Birmingham Hospital Saturday Fund Choices Plan comes out top as it has age-related pricing and a score of 5.8.

   * Other combinations

      In general over the past few years (and this year) Westfield Good4you has consistently performed at the top of the tree in healthcare cashback schemes. If you have another requirement, this is very likely to be, if not the best, amongst them.

   * Providers for older people

      Of the top performing policies, most have a maximum joining age of at least 64, though for those over 70 Pinnacle, Saga, Bolton & District and Birmingham Hospital Saturday Fund all have plans which allow new applicants, the last three with no age limit.

      The companies whose cashplans were included in the survey are as follows: HSA, Secure Health, Pinnacle, Westfield, Healthshield, Bupa, Healthsure, Premier Health, WPA, Bolton & District, WHA, Boots, Insure-for-less, Saga, CS Healthcare, Birmingham Hospital Saturday Fund, Halifax, Axa PPP, Standard Life, Paycare, LHF and Medicash.

Make Money Using Cashplans

Picking the right cashplan can make you money. For a family needing a heavy range of treatments, even a poorly performing cashplan like the Halifax would cost $18/month ($220/year) and you'd be able to reclaim $330.

Yet pick the Birmingham Hospital Saturday Fund Value Plan (for under 35s), and you'd pay $17.50 a month ($210/year), and be able to claim $1,210.

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