|Around 7 million people in the UK are covered by health
insurance, the majority being covered through their employers.
The problem is that few have really studied their policy
documents and many misunderstand what is covered. And perhaps
just as important, what isn't. If you expect health insurance to
pay all your health costs, you're mistaken.
Health insurance is designed to provide protection for curable,
short-term health problems and allow policyholders to jump the
NHS queues to see consultants, be diagnosed, receive surgery or
be treated. That sounds fine, but before you buy you need to
appreciate the treatments and situations that fall outside the
scope of the cover.
But first a word of warning. This article does not relate to any
specific policy and the terms and conditions issued by
individual insurers do vary. So please ensure you also check
your policy documents. After reading this article, you'll know
what to look out for!
Sorry - it's a chronic condition
If a condition can be cured and is not a long-term problem, your
insurance company will classify it as acute and should meet the
cost. If your problem is incurable or it's a problem that,
despite appropriate treatment, will be with you for a long time,
then your insurance company will classify it as chronic - and
no, you won't be covered.
But drawing a firm line between what is acute and what is
chronic is fraught with problems, and leads to the biggest area
of conflict between insurer and policyholder.
Everyone agrees that diabetes and asthma are chronic conditions
as you're likely to suffer from them for the rest of your life.
So those sorts of condition are not covered.
Problems arise when the medical team initially considers a
patients' illness to be curable, but the condition subsequently
deteriorates and the doctors change their mind, it's now become
incurable. This can happen especially in the treatment of some
types of cancer.
In these circumstances, the condition is initially defined as
acute and is therefore insured, but deteriorates and becomes
chronic - and outside the terms of cover. This is possible as
insurers retain the right to reclassify a condition from acute
to chronic during treatment.
Sorry - it's too long term The insurance company will not pay
out for long term treatment. But you need to check your policy
documents to see how they define "long-term". You can find the
situation where a course of drugs extends for say 12 months, but
the insurer will only pay for ten months.
Sorry - it's preventative Your insurance is designed to pay for
the treatment and cure of conditions when they arise. It is not
designed to pay for treatments that are used to prevent an
Again, the problem of definition arises. Sometimes it is
arguable whether a treatment is preventative or a cure. Take the
drug Herceptin for example. This drug can be used in the early
stages of breast cancer. Research shows that Herceptin can halve
the incidence of cancer returning for women who have a
particularly virulent form of the cancer known as HER2. In this
situation, is Herceptin offering a cure or is it a preventative?
Insurance companies are split on the debate. Norwich Union, WPA,
BUPA and Standard Life Healthcare will pay for Herceptin for
HER2 patients whereas Legal and General and Axa PPP will not.
Sorry - the drug is not approved Two of the main attractions for
taking out health insurance are: to jump the queues at the NHS,
and to get the latest treatments and drugs. But there's a rider.
Unless the drug has been approved for use by the NHS in England
and Wales, by the Institute for Health and Clinical Excellence,
your insurer is unlikely to approve its use. The problem is that
the Institute's brief is not simply to decide whether a drug
works, but to carry out a cost/benefit analysis to ensure that
the benefits to the nation outweigh the financial costs of using
it in the NHS. Not an easy brief - and one that has placed the
Institute under scrutiny for the extended delays in drug
The compromise hit on by the Financial Ombudsman is that if a
health policy won't pay for the use of experimental treatments,
then it should meet the cost of an approved conventional
treatment with the policyholder footing the bill for the balance
if the experimental treatment is more expensive.
Sorry - it's a pre-existing condition
The basic principle is that if you are already suffering from a
condition when you start a policy, then that condition
"pre-exists" the policy and any claims for its treatment are
For this reason, insurance companies insist you complete an
exhaustive questionnaire before they agree to insure you. After
all they need a clear picture of your medical condition before
they quote. For many applications, the insurer will, with your
approval, also write to your GP for specific details of your
medical history. They like to have a complete picture.
So lets say some years ago you injured your knee playing
football. It appeared to recover but now it turns out that you
have a torn cartilage and need an operation. The insurer could
argue that this is a pre-existing condition and you have to pay
for its' treatment.
Some insurers try to accommodate these grey areas with a
moratorium provision within your policy. These provisions
typically say that so long as you have been symptom free for two
years relating to any condition you've suffered from within the
last 5 years, then they will pay for subsequent treatment. Not
all policies have these moratorium provisions and the time
periods do vary between insurers. You should carefully read your
Sorry - its not covered
Health Insurance is an annual contract - just like your car
insurance. So when it comes to renewal, your insurer is at
liberty to review not only your premium but also change the
conditions on which your cover is provided.
Therefore, if your policy comes up for renewal mid way through a
course of treatment, it's possible to find that your new policy
no longer covers that particular treatment. This means that you
will have to foot the bill for the balance of the treatment.
Furthermore, with ongoing advances in medical research, more and
more conditions are becoming treatable. This progress has the
effect of shifting back the dividing line between chronic and
This hits the insurers' pocket in two ways. With more conditions
being reclassified as acute, the number of claims is increasing.
And there's also a trend for new treatments to cost more -
Herceptin being a good example. The net result is that the
insurers are finding themselves having to pay out far more. This
is inevitably passed back to you through increased renewal
premiums. And in an attempt to reduce their risk exposure,
insurers have a tendency to adjust their definitions and
exclusions. This means that you must read your renewal notice
closely before you decide to renew.
So when you are considering Health Insurance, be aware that
everything is not always black and white. And if you've got
insurance and need treatment, always contact your insurer
without delay and get them to confirm that your treatment is
About the author:
Michael writes for Brokers Online they offer most UK financial
services including medical insurance.
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