Guide to Health Insurance
Using a Health Insurance broker
Health Insurance is not as straightforward
as some insurance products. The individual products on offer differ from each
other and your needs will not be the same as other people’s. The broker is
trained to take you through a process designed to establish which product would
suit you best. Good brokers will know the products inside out and good broker
firms will be able to offer you prices lower than if you went direct to the
This is why we work with Contact Insurance.
They know the products, they often beat the providers’ prices and they maintain
the right balance between being professional and being personable.
The best way get the right health insurance
policy for you, your family or your business is to fill out the form and let
Contact Insurance help – after all, it will not cost you anything and they will
give you a great deal of assistance, experience and expertise.
About Health Insurance
Health insurance provides
a fund for paying medical expenses in the event that the policyholder is ill or
injured. It often incorporates disability or long-term nursing or custodial
In the UK there is health care provision available,
free to all, through the National Health Service (NHS). The care it provides
can be enhanced though health insurance. Standard procedures are often best
provided through the national network of health care professionals and
hospitals within the NHS, while more involved procedures such as surgery or
specialist care can be difficult to secure in a timely fashion. Private Medical
Insurance is used to access medical care faster and more selectively while
securing greater comfort and priority in terms of private rooms, appointment
times and specialists available nationally.
How are Health Insurance costs assessed?
The equations for assessing Health Insurance premiums
are based around the overall risk of health care expenses being incurred. This
will incorporate the chances of any individual needing health care through to
the cost of that health care. Key
factors for underwriters will therefore be national statistics for certain
medical conditions from corns to cancer. The medical history, of an applicant
and their current medical condition will additionally be factored in. An
assessment is then made concerning the chances of that person contracting any
of a range of conditions. That is measured against the cost of those
conditions. All of this is absorbed into the equation along with profit and
commissions and thus a premium is produced.
How Health Insurance works
A health insurance
policy is, legally speaking, a contract (policy) between an insurance company
and a person (the policy holder) or his sponsor (e.g. an employer). The
contract can be renewed annually, monthly or it can be lifelong. The details of
the contract, i.e. the type of insurance and the level of costs and cover are
agreed in advance. These are provided in documentation and once the cover and
the costs are agreed, subject to medical and other checks, the insurance on
offer is defined in that contract or policy.
Health Insurance Jargon Buster
made by the policyholder (or e.g. his employer) to the insurer to secure health
coverage. It is usually a monthly payment but can be quarterly or annual.
Most policies require the policyholder to pay
an initial amount of any claim before the insurer meets the rest of the cost.
That amount is agreed in advance and the level of this excess will have an
impact on the premium. In reality, this means that treatment involving e.g. a
single prescription may not be worth making a claim against if it does not
exceed the excess level. If the treatment is ongoing and permanent it could, at
some stage exceed the excess and make a claim viable.
Certain services may
attract a type of excess called a co-payment. For example if a policyholder makes
frequent visits to a doctor, there may be a proportion of such costs that the patients
will have to contribute themselves. These co-payments are applicable whenever a
particular service is taken.
Instead of, or in addition to, paying a fixed
amount up front (a co-payment), the co-insurance is a percentage of the total
cost that insured person might also pay. For example, the member might have to
pay 20% of the cost of a surgery over and above a co-payment, while the
insurance company pays the other 80%. If there is an upper limit on
coinsurance, the policyholder could end up owing very little, or a great deal,
depending on the actual costs of the services they obtain.
As with most insurance policies, Health
insurance policies will specify certain things that are not covered. Typically
these could include pre-existing medical conditions, or perhaps previously held
illnesses or injuries. There will also be some standard exclusions depending on
the insurance provider, the level of cover and the type of policy. In such
situations, the insured will be expected to meet the cost of services not
covered under their health insurance.
Some health insurance
policies will place a ceiling on the amount of cover available, either in
total, or more usually against certain treatments. The Policyholder would then have
to meet any further charges for such items. Some policies have annual or
lifetime coverage maximums. In such cases, the health insurance will stop
payment at that point and the policyholder must decide whether to take on the
extra cost of further treatment.
The two most common types of underwriting
adopted by medical insurance providers are Moratorium and Full Medical
Moratorium policies cover the policyholder
for pre-existing conditions following an initial two-year period from the start
date of the scheme. Until that period is over, those conditions will not be
covered. Most health insurers use this to reduce the risks of taking on a
client with pre-existing conditions. The client would have to be clear of
Symptoms, Advice and Treatment related to the pre-existing condition for at
least two years. For conditions that could be ongoing, there are a few insurers
that do not require the client to be clear of symptoms, treatment and advice
for that two years, so after two years these insurers would automatically cover
The other option is FMU or a Fully Medically Underwritten policy.
This is where the insurer will require the client to complete some underwriting
questions and possibly complete a health declaration. The insurer will assess
the declaration and decide what conditions they are prepared to cover and what
conditions they may exclude. Generally pre-existing conditions are not covered
when going down this route, but it can be good for certain clients as it means
they will know exactly what is and what is not covered from the start of the
This treats certain types of payments (e.g.
prescription charges) as out of pocket expenses. Once the total out of pocket
expenses have reach a set level (the maximum) the health insurance pays all
further covered costs.
Insurance companies will often negotiate a rate
with a single supplier of health care
services in return for sending all their policy holders to that supplier. The
amount paid to the supplier by the health insurance company is called ‘Capitation’.
Health Insurance providers often issue a
certificate to authorise a medical service. It is a little like a purchase
order from the insurer to the supplier and provides documentation t the
supplier that the insurance company will pay for the service, clearing the way
for the work to start.
Explanation of Benefits:
self-explanatory. It is a document laying out all that is covered and the
levels of payments available through the policy. It is sent from the insurance
company to the policyholder / patient.
Other factors affecting insurance prices
Insurance prices tend
to be affected by a range of factors. Largely the advances in medical
technology tend to force the pace. New and often expensive treatments, as well
as diagnostic tests, mean that insurance companies are potentially liable for
paying these increased costs in a future claim. This risk is reflected in the premium
level and tends to drive the costs up. People live longer these days and
elderly people require more medical care than younger people. The health of the
general population is also a factor. There are greater levels of obesity and
increased incidences of conditions such as diabetes, heart disease and stroke
because of this.
NHS vs. Private Health Insurance
The NHS is a public service available to UK
residents. It is funded via tax, costing around £104 Billion per year. The NHS
provides the majority of health care in the UK and regardless of status of
other insurances held, everyone in the UK qualifies for treatment by the NHS
Health Insurance Care is often wrongly
considered to be a luxury layer on top o NHS care. It is true that Health
Insurance policyholders are likely to get access to private rooms in private
hospitals. However they are also likely to get appointments quickly and with a
broader range of experts.
Critically, the NHS
also has limits. There are certain drugs, which the NHS finds too expensive to
provide and the only realistic option to cover certain cancer conditions and
other critical illnesses, is via private health insurance
Health Insurance: Did you know?
Health Insurance is cheaper outside London.
Health insurance through Aviva is cheaper
in Scotland and Northern island than it is in England if you exclusively use
hospitals in those countries.
With an Aviva family health insurance
scheme, all second children are included at no extra cost. This means that
second, third, fourth, …ad infinitum, all are included for free.