In the UK around 7 million people spend around £3 billion a year on
medical insurance. One in seven policies are taken out by individuals
with the balance being put in place by their employers. The problem is
that Medical Insurance is complex and few policyholders take the time to
really study the details of their cover. As a result, many
misunderstand what will be covered. If you expect medical insurance to
pay every health claim, you're mistaken.
Medical 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 deciding whether a condition is acute or chronic is fraught with
problems. It's rarely a black and white decision and this can lead to a
major area of conflict between policyholder and insurer.
It's clear that asthma and diabetes are chronic conditions as you're
almost certain to suffer from them for the rest of your life. So those
categories of illness are not covered.
Problems arise when Doctors initially consider a patients' condition to
be curable, but the condition later deteriorates and the medical team
changes its' mind, it's now become incurable. This can sometimes happen,
especially in the treatment of certain 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 medical insurance are: to
jump the queues at the NHS, and to get the latest treatments and drugs.
But there's a rider.
The Institute for Health and Clinical Excellence exists to approve the
use of new drugs by the NHS in England and Wales. Until that body has
approved the drug your insurer is unlikely to pay for its use. The
problem is that the Institute's brief is to perform a cost/benefit
analysis to ensure that the financial benefits to the nation from using
the drug, outweigh the costs of using it in the NHS. A difficult brief
and it has placed the Institute under scrutiny for the extended delays
in drug approval.
The compromise hit on by the Financial Ombudsman is that if your medical
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 twisted your knee playing tennis. It
appeared to recover but now it turns out that you have a torn cruciate
ligament and it needs to be operated on. Your medical insurance company
could argue that the ligament damage was a pre-existing condition and
you have to pay for the operation.
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, 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
Medical 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.
