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Q: What is Private Medical Insurance?
A: Private Medical Insurance (PMI) personal health insurance covers the costs of private medical treatment for curable short term medical conditions, frequently referred to as 'acute conditions'. PMI includes the costs of surgery, specialists, accommodation and nursing at a private hospital or in a private ward of an NHS hospital. Private Medical Insurance cover plans on offer usually come in two 'flavours'; Standard and Comprehensive.
A Standard Plan covers hospital or emergency treatment, it will include 'in-patient' and 'day-care' treatment only. Comprehensive Plans offer additional coverage to include 'outpatient treatment' and can include dental treatment, complementary medicine, travel and personal accident.
In general, PMI Plans do not cover chronic or critical illness which cannot be cured, for example multiple sclerosis, asthma or diabetes. However, in a crisis, most PMI policies will pay the cost of treatment for stabilising a patient and returning them to their previous level of health when possible.
PMI contracts are offered by health insurance companies on an annual basis, with premiums payable monthly, quarterly or annually. Discounts are sometimes offered should you pay the whole annual premium in one go or take up a Voluntary Excess on claims. Some medical insurance providers will accept new clients at any age but most place upper limits at 65 to 75 years old.
Once you are accepted into a personal health insurance plan, the health insurance companies usually continue to offer cover, year on year, albeit at an increasing premium with age. If you receive private health cover as a perk with your employment and you leave your company, most insurers will offer you and your family cover, but it may be on differing conditions and premiums.
It is crucial to understand the terms on which individual health insurance plans are being offered to avoid hassles and disappointments when making a claim. If you have a current PMI Plan but wish to change to another health insurance provider (maybe to save money, receive additional cover or simply to escape from bad service) then it is possible to ensure that you receive a plan on "no worse terms" - this is known in the trade as a CPME plan, a good professional adviser specialising in this area should be able to help. This simply means that the underwriting company of the new healthcare insurance plan, will accept offering you private health cover on the same terms as the previous plan. If you have had claims and particularly exclusions from cover, these too will be carried forward or considered by the new insurer. This CPME transfer method allows for continuity of cover, particularly if you are presently undergoing treatment or have had treatment in the recent past and are concerned as to a re-occurrence of such a medical problem.
A word of caution here, many sales people in the healthcare insurance industry earn money from commission and may be tempted to recommend changing your medical insurance cover for change's sake - this is called churning.
The most frequent and inexpensive way to start a new Private Medical Insurance Plan is by a Moratorium. Providing that you/family are fit and well, with any pre-existing conditions being in the dim and distant past, then this method of taking up medical insurance can be very cost effective. It is vital that potential purchasers understand what Moratorium means, particularly if their past medical record excludes them from benefits in certain areas. When healthcare insurance providers offer such personal health insurance plans, they are taking on clients without them disclosing medical history. This has both advantages and disadvantages which have to be carefully weighed up. For example, if you had a benign growth removed last year and took on a Moratorium Plan, then 18 months into your new Plan cancer was diagnosed, this could mean excluded cover under Moratorium due to the previous benign condition being a pre-existing condition of less than two years.
Q: Which hospitals may I use for my private health care treatment?
A: In the UK, individual health insurance providers have adopted a system of grading hospitals A, B or C levels, with A grades being the best and most expensive. Lists of hospitals covered under a PMI Plan are usually available with any quotation and should be studied carefully before deciding. Some medical insurance companies have their own or preferred private health care hospitals which may not suit you. It is important to consider the distance, reputation and range, across the country, of hospitals offered by your potential private medical insurance company.
Q: What are the Benefits and Exclusions?
A: This is probably the most vital area of reading under a PMI plan after the Moratorium Clause is understood. All individual health insurance policies carry a list of general exclusions from cover and some health insurance companies exclude more or place financial limits on certain benefits offered, particularly benefits such as routine dental cover or maternity cover. The most common exclusions from private health cover are : Alcoholism or drug abuse, Dental treatment, GP services, HIV or AIDS, hazardous sports, infertility, normal pregnancy, sterilisation treatment, overseas cosmetic surgery.
In addition to any general exclusions, others may be applicable depending on the people who you wish to have covered. If information on the application form names medical conditions which you have recently suffered from, often going back 5 years, an insurer may exclude such conditions from cover or qualify such cover.
Q: What will affect my premium in future?
A: As medical insurance cost rises over time it becomes more difficult to obtain cheap medical insurance, A premium you can afford at 40 may turn out to be unaffordable at 65. As new treatments become available involving new drugs and technology, costs of cover will rise and it will become more difficult to obtain cheap health insurance. Health Insurance companies increase premiums annually in line with Medical Inflation. Government legislation also affects premiums, and can make it harder to obtain cheap medical insurance, particularly if tax incentives to plans are either allowed or excluded.
You may be able to obtain cheap health insurance by enjoying a discounted price. This can often be arranged with your health insurance company by agreeing to a Voluntary Excess or by paying annually rather than monthly. No claims discounts may also be offered and clearly claims do make for more expensive premiums in the long run. Private health cover premiums are mostly bracketed in tiers of 4-5 years before increases. It may be noted that medical insurance cost for those above 65 years old generally increases faster to 70 years old and beyond, rather than say from 25 years old to 30 years old.
Q: Do I need to provide health evidence to take out PMI?
A: If in doubt, declare it. As noted earlier, not all conditions are covered and some previous illnesses or treatments may be excluded. A health insurance company may therefore ask for a medical history questionnaire to be completed and signed, or may write to your doctor, or ask you to undergo a medical examination.
Sometimes medical examination is not required. The health care insurance company gives you a Moratorium regarding any pre-existing conditions. This Moratorium may be allowed to expire after a period of usually two years when you have not had treatment or advice for that pre-existing condition, bringing it under cover in year three. A chronic condition would be probably permanently excluded under this type of plan. These plans are quicker and very simple to take out but caution is necessary when considering what treatment you have had in the past five years and whether or not such conditions may re-occur. Sales people should be asked to clarify Moratorium terms particularly how far back the health insurance company considers pre-existing conditions- E.g. 2 to 5 years or since birth.
Q: What happens when I need to make a claim?
A: All Medical Insurance companies will pay valid claims, it is in their interest to do so. They will not pay invalid or fraudulent claims or claims which are outside the cover your particular private medical insurance plan might offer. It is always better if treatment is needed, to contact your insurer's client service department who will quickly guide you with advice and support for claim administration, which hospitals are to be used, specialist help etc. Some insurers pre- authorise all claims so that you do not have to pay doctors and hospital bills but leave all settlement to the insurance company itself. If companies do not pre-authorise, then original bills will be requested with a claim form submission.
Q: How Do I Get Good Advice?
A: When choosing independent medical insurance advisers, check they have professional liability cover and are genuine independent advisers and not Tied Agents or simply direct sales people on commission from one insurer. They should know about the track record of health insurance companies for claims, service and premium increases over time.
Q: Are dental treatments covered?
A: Some Medical plans will offer routine dental cover. Check with one of our advisors for the coverage offered for emergency dental treatment.
Q: Can I choose the hospital for treatment?
A: Yes. You can choose which doctor will treat you and in which hospital/clinic you will have your treatment.
Q: How do I make a claim?
A: Most medical health insurance providers will send a client pack, with Insurance Certificate, Claims Forms and Help line Card, with a range of contact numbers. Many insurers now pre-authorise any in-patient treatment, meaning that you must contact their help lines before seeking treatment and incurring costs. Out-patient costs are usually dealt by routine Claim Forms (i.e. you pay first). If in doubt always call the help lines before seeking treatment and committing yourself to the costs involved in private health care.
Q: How long does it take to handle a claim?
A: Normally it takes around ten working days from the date the medical health insurance provider receives all the necessary documents.
Q: What is a moratorium cover?
A: You may decide to apply for your private medical insurance plan in two ways. The first way is by providing your medical history details and the second is by a moratorium cover. In this case you are not required to provide any medical history but the healthcare insurance company may not cover any medical condition which has existed in the last 2-5 years. Such conditions may automatically become eligible for cover only when you do not have symptoms, or receive treatment, medication, tests or advice from your general practitioner, for that condition for a period of (usually) two years, after your policy has been made effective.
Q: What is a "medical history declaration" cover?
A: You will be asked by the medical insurance provider to fill out a form, giving details of your medical history. Sometimes medical reports may be required. It is essential that you provide all the information required by insurers to avoid future questions or worse, rejection of claims. If you not sure always declare anyway. If you have a medical condition that may come back, the health care insurance company may cover you, but exclude that condition, reviewing the possibility for inclusion into the plan in later years.
Q: Which details of my health must I provide the medical insurance providers?
A: There are a number of medical conditions which you may not be able to have covered under health care insurance plans. You are not normally able to secure cover for an illness you are presently suffering, or have already had in the recent past. These are known as pre-existing conditions.
Q: Do insurers have a money back guarantee?
A: Most medical health insurance providers offer a money back guarantee. If you are not entirely satisfied with your insurance documents, you can cancel your cover within the first 30 days and, provided you have not made a claim the health insurance company may fully refund the premium you have paid.
Q: What is in-patient coverage?
A: In-patient coverage includes expenses incurred when you go into hospital for private treatment or investigations and stay for one or more nights.
Q: What is day-patient coverage?
A: Day-patient coverage, also called Day-care or Day-case, incurs when you go into hospital for private treatment or investigations, but do not need to stay in the hospital overnight.
Q: What is out-patient coverage?
A: Out-patient coverage includes expenses incurred when you receive treatments from a doctor or investigations or consultations that do not require you stay in hospital, either as an in-patient or out-patient.
Q: What am I covered for and what is not included?
A: Note that medical insurance is designed to cover only treatment for curable, short term illness or injury. Some illnesses and treatments are never included. A standard or basic scheme will usually cover in-patient or day care treatment, post hospital treatment, nursing at home, emergency dental and complications of pregnancy. It will not cover out-patient, routine maternity or dental costs. A comprehensive scheme will cover all the above plus out-patient care and specialists, complementary care, routine dental (sometimes) and generally has higher budget limits than a Standard plan. Most plans exclude pre-existing conditions which may go back 2-5 years or longer.
Q: I have pre-existing medical conditions how does this effect my insurance?
A: A pre-existing condition is a medical condition which has been diagnosed, has required medical treatment or for which you have sought medical advice or symptoms have occurred in a period immediately prior to applying for the plan. Most health plans do not pay for the treatment of pre-existing conditions.
Q: What is the difference between a standard and a comprehensive medical plan?
A: A standard or basic health care insurance scheme will usually cover in-patient or day care treatment, post hospital treatment, nursing at home, emergency dental and complications of pregnancy. It will not cover out-patient, routine maternity or dental costs. A comprehensive scheme will cover all the above plus out-patient care and specialists, sometimes complementary care and routine dental. Comprehensive plans generally have higher budget limits than a Standard plan.