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Health Insurance – It's Important To Know What's Not Insured!
By: Michael Challiner
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
illness.
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 approval.
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 invalid.
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 policy.
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 acute conditions.
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 indeed covered
About the Author:
Michael writes for Brokers Online they offer most UK financial services
including medical insurance.
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