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.
Technically, they're insurance policies which pay out when you incur healthcare costs. You pay a monthly payment (called 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 in the receipt to the cashplan 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, in-patient stays, complementary health (see a list of treatments commonly covered).Treatments commonly covered
- Dentist: Both check-ups and dental treatments.
- Optician: Sight tests and prescription glasses or contact lenses. Some providers exclude disposable contact lenses (also see Cheapest Contact Lenses Article).
- Chiropody: Foot treatment and advice.
- Physiotherapy: Sometimes coupled with osteopathy, sometimes separate.
- Maternity Payments: A cash payment paid when a child is born.
- Complementary Health: Osteopathy, chiropractics, homeopathy and acupuncture by a registered practitioner.
- Hospital In Patient: 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 that 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.
Do you pay out regularly for optical or dental treatments?
Cashplans usually cover both dentistry, including check-up costs and treatments and optical treatments such as sight tests, prescription glasses or contact lenses are included.
If you regularly spend on these, it boosts the value of grabbing a cashplan to you, as the pay out on these alone roughly matches the annual pay in. This story should explain...
If this situation's like yours, jump to First Timers' Best Buys for the top payers.Cashplans can be a good alternative to getting specific dental insurance, though in some circumstances that can be better too (see Cheap Dental Insurance) and do remember you can often save by getting optical products online (see Cut Contact Lens Costs & Glasses Buying guides).Dennis Talplan, or Den to his friends, has regular check-ups at the dentist spending about £40/year and as a glasses wearer he spends the same amount at the opticians. He is signed up to the Paycare cashplan'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.
What's the difference between PMI & cashplan 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).
Cashplans 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 cashplan, it's unlikely to touch the sides. Yet for complementary therapies and occasional consultants, it's a cheap way to offset costs.
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 cashplan 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.
The Nitty Gritty
- Most policies only repay a proportion of costs.
When you make a claim, it's rare to find a plan that will give you all the cash back. Most providers usually have a range of tariffs and increasing the amount you pay increases what you can claim back.
For example, while a £4 a month plan may allow you to reclaim 70% of annual osteopathy/chiropracty costs up to a maximum £80 a year, a £20 a month plan could allow 80% of up to £600 a year.
- 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.
- Plans seldom require a medical.
Unlike PMI, the vast majority of healthcare cash plans don't require a medical, which is a boon.
- 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. If you've a condition you know you'll need to claim for, check out the specialists below.
- The money is protected.
All healthcare cashplans are covered by the Financial Services Compensation Scheme, meaning 100% protection on the first £2,000 (enough to cover all schemes below manyfold).
- 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. In fact the dominance of corporate cash plans actually helps keep prices down (read about corporate subsidies)
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 to claim cash back. This can result in an indirect subsidy from corporate plans to individual policyholders.
The plans sound phenomenal, they cover your costs and can for someone having a LOT of treatments 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!
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 at all. Thus, cashplan providers rely on apathetic customers with direct debit subscription charges dripping from their bank accounts to keep the coffers healthy. So bear in mind...
- 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 an historic boon.
An historic boon
Many cashplan companies pre-date the NHS. The earliest were set up towards the end of the nineteenth century. They were non-profit organisations then and most continue in that mode to this day.
This has useful side effects for modern policyholders. Some of these older operators have over the long term built up substantial investment portfolios that ease their finances and allow them to pay more generous benefits. It also means spare money each year is donated to charity, often to specific health related charities in the local area.
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, Norwich Union (Aviva) 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.
Since all cashplan policies have different prices, cover and limits, it is 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 claim it's only a rough guide, but it's a good way to show up the bigger payers.
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, and for a family (2 adults, 2 kids) £20.
E.g. If a plan costs £120 over a year, but returns £700 for a range of treatments, it has a score of £700 divided by £120 which equals 6.0.
Sample calculation for an individual adult policy
| Annual Spend | Annual Benefits allowed | Annual Cash Return | |
|---|---|---|---|
| Dental | £120 |
100% upto max £85 |
£85 |
| Optical | £120 |
100% upto max £80 |
£80 |
| Prescription | 5 prescriptions |
Max £20 |
£20 |
| Osteopathy | 10x£35 treatments |
80% of cost paid to max £300 |
£240 |
| Night Hospital Stay | - |
£40/night |
£40 |
| Consultation | £150 |
80% of cost to max £150 |
£120 |
| TOTAL | £770 |
- |
£585 |
Best Buys
The top policies
If you're not sure that you'll remember to claim, these first timers' picks focus on cheap plans, so if you do forget the loss is small; though it does mean the potential payback is reduced. However if it works you can always increase plan level later.
First Timers
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: Only £40 towards each of dental and optical treatment
1st Place
Company: Paycare
Plan: Direct 1
Costs: £5.75 per month (£69/year)
Annual Payout: £80
No-claim period: First 13 weeks
Score: 1.16
2nd Place
Company: WHA
Plan: Personal 145
Costs: £6.28 per month (£75/year)
Annual Payout: £80
No-claim period: First 12 weeks
Score: 1.06
3rd Place
Company: Medicash
Plan: Solo Bronze
Costs: £6.50 per month (£78/year )
Annual Payout: £80
No-claim period: First 6 months, unless you take 'fast track'
Score: 1.03
Single Adults
The aim here is to find a policy with a wide range of cover and a good payout rate. To measure this an unrealistic scenario has been used deliberately as it is useful for measuring each plans payout power for a range of treatments (always check the cover levels suit your needs before buying)
Claim Basis: A wide range of treatments was chosen including dental, optical, stays in hospital for adults/and or children, osteopathy, prescriptions and consultations. The price level used was the nearest to £10 a month per adult.
1st place
Company: Birmingham Hospital Saturday Fund
Plan: Value (age 17-34s only)
Costs: £8.95 per month (£107/year)
Annual Payout: £454
No-claim period: First 13 weeks
Score: 4.23
2nd place
Company: Sovereign
Plan: Level 2
Costs: £7.80 per month (£94/year)
Annual Payout: £388
No-claim period: First 13 weeks
Score: 4.15
3rd place
Company: Medicash
Plan: Bronze Plus
Costs: £10.40 per month (£125/year)
Annual Payout: £508
No-claim period: First 6 months, unless you take 'fast track'
Score: 4.07
Single parents with one child
The aim here is to find a policy with a wide range of cover and a good payout rate. To measure this an unrealistic scenario has been used deliberately as it is useful for measuring each plan's payout power for a range of treatments (always check the cover levels suit your needs before buying)
Claim Basis: A wide range of treatments was chosen including dental, optical, stays in hospital for adults/and or children, osteopathy, prescriptions and consultations. The price level used was the nearest to £10 a month per adult; all the providers below cover one child at no extra cost.
1st place
Company: Bolton & District
Plan: option 2
Costs: £11.27 per month (£135/year)
Annual Payout: £683
No-claim period: First 6 months
Score: 5.05
2nd place
Company: Medicash
Plan: Bronze Plus
Costs: £10.40 per month (£125/year)
Annual Payout: £592
No-claim period: First 6 months, unless you take 'fast track'
Score: 4.74
3rd place
Company: Westfield
Plan: Good4You Level 2
Costs: £11.20 per month (£135/year)
Annual Payout: £622
No-claim period: First 12 weeks for most treatments
Score: 4.62
The aim here is to find a policy with a wide range of cover and a good payout rate. To measure this an unrealistic scenario has been used deliberately as it is useful for measuring each plan's payout power for a range of treatments (always check the cover levels suit your needs before buying)
Claim Basis: A wide range of treatments was chosen including dental, optical, stays in hospital for adults/and or children, osteopathy, prescriptions and consultations. Family schemes are the top payers overall, with potential returns slightly higher than even the competitive single parent schemes above.
1st place
Company: Birmingham Hospital Saturday Fund
Plan: Value (age 17-34s only)
Costs: £17.30 per month (£207/year)
Annual Payout: £1,072
No-claim period: First 13 weeks
Score: 5.16
2nd place
Company: Medicash
Plan: Bronze Plus
Costs: £19.15 per month (£230/year)
Annual Payout: £1,184
No-claim period: First 6 months, unless you take 'fast track'
Score: 5.15
3rd place
Company: Bolton & District
Plan: option 2
Costs: £22.54 per month (£270/year)
Annual Payout: £1,366
No-claim period: First 6 months
Score: 5.05
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.
Company: Sovereign
Plan: Level 2.
Pre-existing condition rules: Optical, Dental, Podiatry, Chiropody covered
Score: 4.15
Joining over 75.
Company: Saga
Plan: (various)
Pre-existing condition rules: All conditions covered after 2 years membership
Score: varies by age
The Saga policy is for over 50s only, but the cost jumps for over 70s. Other policies worth considering for older people are Pinnacle Bronze (under 74s), and CS Healthcare level 2 (under 70s).
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: Insure For Less, Pinnacle, Bupa, Healthsure, Simplyhealth, LHF, Saga, AXA
Our annual 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.
Picking the right cashplan can make you money. For a family needing a heavy range of treatments, even the worst scorer in our scenario, Halifax cashplan + option 1, would cost £27/month (£320/year) and for the options used in our research you'd be able to reclaim £830.
Yet pick BHSF Value plan, and you'd pay £17.30 a month (£210/year) and be able to claim £1,072.
The top-paying individual & family cashplans
| Best Return | 2nd Place | 3rd Place | |
|---|---|---|---|
| Individuals | |||
| Provider | BHSF Value |
Sovereign Lv. 2 |
Medicash Bronze plus |
| Monthly cost | £9 |
£8 |
£10 |
| Annual cost | £110 |
£95 |
£125 |
| Annual cash repaid | £455 |
£390 |
£510 |
| VALUE RATING | 4.23 |
4.15 |
4.07 |
| Family of four | |||
| Provider | BHSF Value |
Medicash Bronze plus |
Bolton & District op. 2 |
| Monthly cost | £17 |
£19 |
£23 |
| Annual cost | £210 |
£230 |
£270 |
| Annual cash repaid | £1,070 |
£1,180 |
£1,370 |
| VALUE RATING | 5.16 |
5.15 |
5.05 |
| Note: While all figures have been rounded for ease, all the calculations and rankings are based on the actual figures. Figures correct as of 08/06/09 | |||
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