Typically cash plans are usually available through an employer, either in the form of a company paid or voluntary basis. There are options where a person can opt for a cash plan style solution privately, and with people feeling the pressures associated with the current economy, it is being looked upon as an alternative to the rising costs of traditional private medical insurance plans. Healthcare cash plans are often considered a substitute for budget PMI plans or as an option for those who couldn’t normally afford health insurance.
These healthcare cash plans are meant to help people to budget for their everyday healthcare expenses. Users will put away a certain amount every month in return for cash payouts that are then used to pay for treatments such as dentistry, hospital consultations, physiotherapy and other health related needs. Depending on the policy and the level of cover, the user can be reimbursed anywhere from 50% to 100% of the costs after they have sent their medical receipts to their cash plan provider. The difference between this and PMI is that cash plans do not cover hospital inpatient treatments however some policies do make contributions towards outpatient consultations and diagnostics.
Currently there are around 2.1 million contributors to healthcare cash plans and most are happy with this option as it means they can make regular claims for their healthcare needs and feel they are getting returns for the money they put in. This is something that policy holders generally don’t feel about PMI plans. PMI plans are in place to make sure that if any medical problems occur they are handled whereas cash plans are there as a pre-emptive measure to reduce problems from happening. Cash plans also often cover treatments not normally covered on a traditional PMI plan such as dental and optical treatments. In some instances the two products can be used in conjunction, whereby a PMI policy can cover the cost of any large medical needs, a cash plan can be used to deal with smaller claims.
Due to the economic difficulties currently being experienced across the board at the moment, it is believed that it is a very good time to opt for a healthcare cash plan. Cash plans can be used to cover a wide range of consultation tests and outpatient treatments and aren’t as inclusive as the options on PMI plans. They offer crucial financial aid to the costs associated with regular medical costs allowing people to reduce the amount of time they need to spend away from working.
Further to this, providers are also beginning to recognise the importance of these cash plan models for their business as well as the benefits it brings to users. This can be amounted to a combination of things including the ongoing NHS reforms, ever increasing PMI premiums and the consolidation of a number of PMI providers.
Stuart writes on behalf of AXA PPP healthcare who provide traditional health insurance options as well as health cash plans