Around 7 million people in the UK are covered by health insurance, the majority being covered through their employers. The trouble 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 planned to supply protection for curable, short-term health problems and reserve policyholders to jump the NHS queues to see advisers, be named, accept 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 term
If a term can be cured and is not a long-term problem, your insurance policy company will classify it as acute and should match the cost. If your trouble is incurable or it’s a trouble that, despite appropriate handling, will be with you for a long time, then your insurance policy 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 circumstances 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 takes a patients’ illness to be curable, but the term subsequently deteriorates and the doctors change their mind, it’s now become incurable. This can happen especially in the handling of some types of cancer.
In these circumstances, the condition is initially defined as acute and is therefore insured, but deteriorates and turns chronic – and outside the terms of cover. This is possible as insurers retain the Right to reclassify a term from acute to chronic during handling.
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 specify “long-term”. You can find the position 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 projected to pay for the treatment and cure of conditions when they grow. 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 model. This drug can be used in the previous 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 position, 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 authorized
Two of the main attractions for taking out health insurance policy 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 insurance company 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/profit analysis to secure that the welfares 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 approving.
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 match the cost of an approved conventional treatment with the policyholder footing the bill for the balance if the experimental treatment is more pricey.
Sorry – it’s a pre-existing term
The basic principle is that if you are already suffering from a term when you start a policy, then that term “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 torn 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 policy is an annual contract – just like your car insurance policy. So when it comes to renewal, your insurance company 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 continues that particular handling. This means that you will have to foot the bill for the balance of the handling.
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 considerations.
This hits the insurers’ pocket in two ways. With more circumstances being reclassified as acute, the number of claims is Progressive. And there’s also a trend for new treatments to cost more – Herceptin being a good case. 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 replacement premiums. And in an attempt to reduce their Risk exposure, insurers have a tendency to adjust their definitions and exclusions. This implies that you must read your renewal notice closely before you decide to renew.
So when you are considering Health insurance policy, be aware that everything is not always black and white. And if you’ve got insurance policy and need handling, always contact your insurer without delay and get them to confirm that your treatment is indeed covered
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