Transport for London was recently criticised for spending over £10m on private health insurance for its staff over the past three years. Given that we all have access to the NHS, is it really worth buying health insurance?
Transport for London is one of many companies in the UK that offers private medical insurance as a perk to its employees.
However, many feel that private health insurance is an unnecessary and even extravagant expense when we all have access to free healthcare on the NHS. On the other hand, supporters of private health insurance argue that reduced waiting times and greater choice of consultants, hospitals, appointments etc. make the costs justifiable.
Is there any alternative?
Healthcare cash plan (HCP) providers argue that they offer a middle ground between free healthcare and private medical insurance. HCPs are a less well-known way of covering medical costs, increasingly offered by employers who want to provide their staff with a more affordable perk.
So how do they work? HCPs allow you to reclaim a percentage of costs for everyday treatments, such as physiotherapy and optical care, up to a fixed maximum amount each year. The most basic policies can start from around £6 a month.
HCPs can be seen to complement the NHS by helping you recoup costs in areas not generally covered by the free health service like dental and chiropractic treatment. Unlike private medical insurance, there’s no need to have a medical beforehand and, in most cases, premiums will not increase as you get older. However, if you have any pre-existing conditions, it’s likely that restrictions will be applied.
Weighing up the options
I’m fortunate enough to be in good general health, but I regularly spend quite a bit on glasses and contact lenses. For this reason, a health care cash plan appeals to me more than private medical insurance.
Having said that, the annual optical benefit limits offered by the more basic policies (around £50) fall far short of what I typically spend in a year. It’s also unlikely I would claim for any other benefits, so an HCP wouldn’t make financial sense for me. As far as I’m concerned, I’d be better off putting some money aside each month specifically for covering optical costs.
Given the nation-wide spending squeeze, how far up on your list of priorities does health insurance feature? Does the affordability of a cash plan appeal to you, or would you rather ‘self-insure’ by regularly setting money aside?