Whether it's NHS or private, you can cover dental, optical, alternative treatments and medical costs for just a few pounds a month. Better still, they can potentially pay back five times what they cost. This is a full step-by-step guide to the best buy healthcare cashback schemes, which should help you find the right one.
For other step-by-step guides and deals, see our insurance page for more help.
In this guide
What are cash plan schemes?
Technically, they're insurance policies which pay out when you incur healthcare costs. You pay a monthly payment (a premium) and then when you lay out your own cash for a treatment, reclaim a percentage of the costs back, up to a pre-determined maximum.
Let's make it simple.
Spend £100 at the osteopath. Send the receipt to the cash plan and it'll typically send you 75% of that back (ie, £75)
However each plan differs on what's covered, the maximum amount you can claim per treatment, and the percentage payout. Though even on cheaper policies, they pay out on a broad range of things including chiropody, inpatient stays, and complementary health. See a list of commonly covered treatments).
Commonly covered treatments
- Dentist: Both check-ups and dental treatments.
- Optician: Sight tests and prescription glasses or contact lenses. Some providers exclude disposable contact lenses (also see Cheap Contact Lenses guide).
- Chiropody: Foot treatment and advice.
- Physiotherapy: Sometimes coupled with osteopathy, sometimes separate.
- Maternity payments: Cash, paid when a child is born.
- Complementary health: Osteopathy, chiropractics, homeopathy and acupuncture by a registered practitioner.
- Hospital inpatient: A cash allowance paid for each night spent in hospital.
- Hospital parental stay: A cash allowance paid when a parent spends the night in hospital with a sick child.
- Special consultation: Repayment of fees paid towards a consultant physician or surgeon.
- Personal accident, death and funeral benefits: Cash grants paid out in the event of accident or death.
- NHS prescriptions: Cash back on the cost of a limited number of prescriptions (not commonly included).
- Health screening: Schemes will pay for an annual health screening.
- Others: Surgical or hearing aids, redundancy payouts, mental health payouts, day surgery cover, recuperation grants, occupational therapy, dietician, paternity grants, adoption grants, infertility grants. Many providers also operate help and advice lines for a range of subjects.
Most people can manage 'normal' heathcare costs, but for many, cash plan schemes can be superbly helpful. Yet they're not always cheaper overall than 'self-insuring'; routinely stashing cash in a dedicated Top Savings Account for use when the need arises.
Do you pay out regularly for optical or dental treatments?
Cash plans usually cover both dentistry, including check-up costs and treatments, and optical treatments such as sight tests, prescription glasses or contact lenses .
If you regularly spend on these, it boosts the value of a cash plan to you, as the payout on these alone roughly matches the annual pay-in. This story should explain.
Dennis Talplan, or Den to his friends, has regular check-ups at the dentist, spending about £40/year. As a glasses wearer, he spends the same amount at the optician. He is signed up to the Paycare cash plan's most basic level, at £5.75 a month.
So, while he's laying out £69 a year for the policy, he's able to reclaim £80, which comes to 116% of his costs. This means he is more than recouping the cost of the plan, so if any further treatment needs spring up he's covered and in profit.
If this situation's like yours, jump to First Timers' Best Buys for the top payers. Cash plans can be a good alternative to getting specific dental insurance, though in some circumstances that can be better too (see Cheap Dental Insurance). Remember you can often save by getting optical products online (see Cut Contact Lens Costs and Glasses Buying guides).
What's the difference between PMI and cash plan schemes?
They are very different policies. Private Medical Insurance (PMI) effectively provides a full-service alternative to the NHS (usually with the exception of GP services) so that, if you are ill or have a problem, the check-ups and treatments are all automatically paid for. Unsurprisingly, it can be costly (see Cheapest Private Medical Insurance guide).
Cash plans operate separately from the provision of treatment. They simply allow you to reclaim some of the cost of whatever NHS or private healthcare you need. If you did opt for expensive private treatment and only had a cash plan, it'd be unlikely to touch the sides. Yet for complementary therapies and occasional consultants, it's a cheap way to offset costs.
How do they work?
Arrange the treatment, pay the money and then send off a receipt and claim form to reclaim the cash. This does mean if you're not the type of person who'll remember to send off the receipts, don't bother with one of these plans.
Normally there's no need to inform the cash plan provider before having treatment, though this is requested in certain cases. Typically this applies to something like osteopathy, where you'd be required to have a GP or specialist confirm it was treatment for an actual condition.
Many policies only repay a proportion of costs
When you make a claim, you'll either be able to claim all of the cost back, or only a percentage. Most providers usually have a range of tariffs. Increasing the amount you pay increases what you can claim back.
For example, a £4/month plan may allow you to reclaim 70% of annual osteopathy or chiropracty costs up to a maximum of £80 a year, but a £20/month plan could allow 80% of costs up to £600 a year.
You usually can't claim in the first few months
Most plans have qualifying 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 at least 10 months, for obvious reasons.)
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.
Plans rarely require a medical
Unlike PMI, the vast majority of healthcare cash plans don't require a medical.
Pre-existing conditions cover is limited
Most of the cheaper policies exclude claims on pre-existing conditions, except for dental and optical. Some policies will cover conditions after a set amount of time, which varies per provider, so check the documentation carefully.
The money is protected
All healthcare cash plans are covered by the Financial Services Compensation Scheme, meaning 90% of what you pay out is protected. The FSCS's primary objective is to maintain continuity though - which means it'll try and find another insurer to cover you.
You may already have a plan without knowing it
Cash plans are a popular staff perk among councils, police forces and public bodies. Before taking one, out check whether your employer already provides cover for free. In fact the dominance of corporate cash plans actually helps keep prices down (read about corporate subsidies).
The dominance of corporate cash plans has some interesting side effects for people choosing to take individual policies. The average age of employees in most corporations is lower than the average age of individual cash plan holders.
Statistically, younger people are less likely to need medical treatment and therefore less likely to claim cash back. This can result in an indirect subsidy from corporate plans to individual policyholders.
How can they pay out so much?
The plans sound phenomenal. They cover your costs and for someone having a LOT of treatments, can pay back more than five times what you pay in, year by year. So, how can it all add up?
- Most people don't claim!
Just because people can claim, doesn't mean they do. Many people forget to send in their claim forms, so there's no payout at all. Cash plan providers rely on apathetic customers with direct debits subscriptions dripping from their bank accounts to keep the coffers healthy. So bear in mind...
Cash plans are only great value if you'll make claims. If you won't, they're a complete waste of money.
- They have strong historic reserves
Most cash plan providers are non-profit organisations set up before the NHS. These older operators tend to have built up substantial investment portfolios, which ease their finances and allow them to pay more generous benefits. For more on cash plans' mutual status and other similar issues, read the additional notes on an historic boon
An historic boon
The earliest cash plan companies were set up towards the end of the 19th century. They were non-profit organisations then, and most continue in that mode to this day.
Their healthy investment portfolios benefit modern policyholders, and also means spare money each year is donated to charity, often to specific health-related charities local to the cash plan company.
Is it possible to get a windfall if they float?
Though the majority of cash plans are non-profit organisations, they're often incorrectly referred to as mutuals. In truth, they tend to be companies limited by guarantee. This means it's highly unlikely that joining would ever mean windfall benefits from demutualisations. Most cash plan groups' constitutions state if companies close down their businesses, customers and assets will transfer to another similar scheme or charity.
In recent years some profit-making companies, like Standard Life, Aviva (Norwich Union) and Bupa, have moved in and out of the market. Their strong brands and marketing have helped build the market as a whole, but their plans still leave something to be desired and rarely make the top three.
The top cash plan policies
Since all cash plan policies have different prices, cover and limits, they are a nightmare to compare. So, to help in the best buys box below, we've based scores on a variety of scenarios. Of course as no one knows their what their claims will be, it's only a rough guide. But it's a good way to highlight the bigger payers.
A policy that pays out £300 and costs £100 a year would score 3.0. Full scoring info
How they're scored
The judgement criterion is the policy that pays back the most compared to its cost. As each provider has a range of tariffs, for a single adult, its nearest tariff to £10 a month was used, For a family (2 adults, 2 kids), £20 was used.
So if a plan returns £700 for a range of treatments, but costs £120 over a year, then its score is 6.0 - £700 divided by £120.
The top policies
If you're not sure you'll remember to claim, these first timers' picks focus on cheap plans. So if you forget to claim the loss is small, but it does mean the potential payback is reduced. If it works, then you can always increase the plan level later.
To find the first timers' top picks, each provider's lowest-priced plan was chosen. Here are the rankings (always check the cover levels suit your needs before buying).
Claim basis: £40 towards each of dental and optical treatment.
|1st place||2nd place||3rd place|
|Plan:||Direct 1||Personal 145||Level 1|
|Costs:||£5.95 per month
|£6.28 per month
|£6.50 per month
|No-claim period:||First 13 weeks||First 12 weeks||Can claim straight away,
though check individual policies
The aim here is to find a policy with a range of cover and a good payout rate. Always check the cover levels suit your needs before buying.
Claim basis: A range of treatments was chosen. Dental, optical, osteopathy and physiotherapy. The price level used was the nearest to £10 a month per adult.
|1st place||2nd place||3rd place|
|Company:||Medicash||Birmingham Hospital Saturday Fund||Sovereign|
|Plan:||Level 1||Value (age 17-34s only)||Level 2|
|Costs:||£6.50 per month
|£8.95 per month
|£8.84 per month
|No-claim period:||Can claim straight away, though check individual policies||First 13 weeks||Six months for pre-existing conditions|
Single parents with one child
As above, the aim is to find a policy with a range of cover and a good payout rate. Always check the cover levels suit your needs before buying.
Claim basis: A range of treatments was chosen. Dental, optical, osteopathy and physiotherapy. The price level used was the nearest to £10/month per adult. These providers cover one child at no extra cost.
|1st place||2nd place||3rd place|
|Plan:||Level 1||Option 2||Good4You Level 2|
|Costs:||£6.50 per month
|£8.50 per month
|£11.20 per month
|No-claim period:||Can claim straight away, though check individual policies||First 13 weeks||First 12 weeks for most treatments|
Once again, the aim is to find a policy with a range of cover and a good payout rate. Always check the cover levels suit your needs before buying.
Claim basis: A range of treatments was chosen. Dental, optical, osteopathy and physiotherapy. Family schemes are the top payers overall, with potential returns slightly higher than even the competitive single parent schemes above.
|1st place||2nd place|
|Company:||Medicash||Birmingham Hospital Saturday Fund|
|Plan:||Level 1||Value (age 17-34s only)|
|Costs:||£13 per month
|£17.30 per month
|No-claim period:||Can claim straight away, though check individual policies||First 13 weeks|
Older People/Pre-existing conditions
Most of the top-paying healthcare cash plans have a maximum joining age of 64, but if you're older there are still plenty of options:
|Joining 65-75||Joining over 75|
|Pre-existing condition rules:||Optical, dental, podiatry, chiropody covered. Six month waiting period for pre-existing conditions||All conditions covered after 2 years' membership|
Pre-existing conditions cover:
If you've a specific pre-existing condition you need to cover you'll pay more. Prices vary widely based on conditions and cover levels, so compare quotes from all of the following to find your best price: Signature Healthcare, Helpucover, Bupa*, Simplyhealth, Saga, Axa.
Our survey of providers was completed in May 2009 (though results tend to change very infrequently). The companies included were: 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, Medicash, Engage Mutual, Benenden Healthcare, Sovereign and HSF.