Uncovered Report: Cash Pan and Private Heath Insurance Expained
Contents 3 Introduction 4 Cash pan products 6 Private heath insurance products 9 How the two pans match up? 10 Concusion 33256_ONEGI_GEN3480_BRO.indd 2 02/11/11 11:28 AM
Introduction Getting the best possibe heathcare prompty incuding access to new drugs and treatments that peope read about everyday in the news is aways of high importance to peope. Many ook to private heath aternatives to meet this need. It is important that customers have a thorough understanding of a the options avaiabe to them. For exampe, private heath insurance and cash pan products often get confused, eaving consumers unsure of the treatments each offers. This guide has been deveoped to hep readers gain a fu understanding of the difference between private heath insurance and cash pan products. Our hope is that, by cutting through the jargon, we can hep consumers make informed decisions about ooking after their heath. What is the difference between cash pan and private heath insurance products? Many peope may consider private treatment and support to be expensive but there is now a range of heathcare options catering for different needs at a reasonabe cost, most notaby moduar private heath insurance that enabes you to taior your cover to suit your needs and budgets and Cash Pan products. These products are often referred to as if they are interchangeabe. However, they actuay serve different purposes, with private heath insurance providing treatment for those unexpected more expensive heath caims and cash pans providing reimbursements argey towards everyday heath costs that can a add up. Both products have their pace, and are a great way to hep consumers stay we by compementing the exceent emergency treatment avaiabe on the NHS. The next section expains each proposition in more detai. 1694 Concept of heath insurance first devised in a book by Hugh the Eder Chamberen 1850 Accident insurance, operating much ike todays disabiity insurance, first offered in the US by the Frankin Heath Assurance Company of Massachusetts 1873 The Hospita Saturday Fund, a forerunner of private heath insurance in the UK, founded to raise money for hospitas 1948 Launch of NHS in the UK Late 20th century, traditiona disabiity insurance evoved into modern heath insurance programs 1990 Aviva, then Norwich Union Heathcare, aunches it s first private heath insurance offering, Express Care. 2009 Aviva aunches a new and improved fexibe, moduar offering into the cash pan market, My Heath Cash Pan. aviva.co.uk/heath 3 33256_ONEGI_GEN3480_BRO.indd 3 02/11/11 11:28 AM
Cash Pan A heath cash pan is a way to hep contribute towards everyday heath costs such as prescription charges and denta and optica expenses. Whist consumers wi need to initiay pay for such treatment, the pan wi then reimburse them up to a specified imit. This potentiay saves a significant amount of money each year and heps peope with medica costs. One of the most desired benefits of this proposition is cash towards denta treatment, which is hardy surprising when you consider that compex denta treatment such as crowns or root cana surgery can cost amost 200 on the NHS 1. Cash towards optica treatment and then money towards speciaist consutations and private inpatient treatment are aso highy vaued. 2 Doesn t a cash pan just hep me out with denta work? Cash pans actuay pay money towards a variety of heath benefits as we as dentistry and optometry. With core heath cover, My Heath Cash Pan offers physiotherapy, osteopathy, chiropractic, homeopathy and acupuncture, GP prescriptions and charges, heath screens, pus a 24 hour GP hepine and reduced gym fees. As an exampe of the cover avaiabe, Aviva s My Heath Cash Pan offers as standard: 100% reimbursement of denta and optica charges each year, up to a combined tota of 250 80% reimbursement of prescription and other GP charges each year, up to a combined tota of 50 My Heath Cash Pan from Aviva offers a baby bonus of 200 per baby. In 2008, 708,708 babies were wecomed into the word in the UK the highest number since 1972! 4 80% reimbursement of therapies such as physiotherapy, osteopathy, chiropractic, homeopathy and acupuncture each year, up to a combined tota of 150 Up to 100 worth of heath screens every other year A baby bonus of 200 for each baby Access to a 24-hour GP teephone hepine and stress counseing hepine Gym discounts from a seection of UK gyms. A growing market This is a growing product offering, there are currenty 2.9 miion individua contributors to cash pans in the UK. 5 Poicies are typicay purchased by oder coupes whose chidren have eft homes or famiies who want to maintain a budget as we as a heathy ifestye, e.g. younger peope funding heathcare for the first time on a budget or famiies who stick to a monthy pan. This is a summary of cover ony. A fu breakdown of poicy benefits and excusions is avaiabe on request. In 2008/2009, 571.7 miion was spent on denta treatment in Engand, an increase of 40.3 miion on the previous year! 3 1 Source: based on NHS guideine prices (Band 3 is 198) 2 Source: Minte, Heath Cash Pans & Private Medica Insurance, Finance Inteigence, August 2009. 3 Source: NHS Denta Statistics for Engand, 2008/9. August 2009 4 Source: Births and Deaths in Engand and Waes, Office of Nationa Statistics, May 2009 5 Source: Laing & Buisson, UK Market Report August 2009 4 Cash Pan & Private Heath Insurance Expained
Aviva s My Heath Cash Pan gives you access to a 24 hour GP teephone hepine support whenever you need it! In 2009, there were 12,426 cas to the hepine 6 What infuences peope to buy? 7 Current economic cimate Dentists going private Lifestye changes e.g. having chidren How can cash pan premiums be reduced? Reduced cover Cash pan customers can choose to reduce the treatment that they are reimbursed for. For exampe, Aviva My Heath Cash Pan customers can choose to be covered ony for denta and optica treatment. Moduar products Certain cash pans are moduar in nature, meaning that customers are abe to pick and choose their benefits. For exampe, with My Heath Cash Pan from Aviva, for a sma premium increase, some peope may wish to extend their cover to incude a hospita benefit such as reimbursements towards in-patient, day-patient, x-rays and scans, speciaist second opinions and chid support cash benefits. Wanting to maintain a heathy ifestye What are key requirements? 8 Menu approach: peope want to be abe to pick and choose their cover Famiy cover Denta and optica cover It is important to note that there is generay a quaifying period before any caims can be made and there wi be certain costs that are not covered. For exampe, it is unikey to cover treatment that takes pace overseas and there may aso be specific excusions on the benefits themseves e.g. aser eye treatment woud not be covered within the optica benefit aowance. Woud I ever reay use it? I ook after mysef and don t need gasses. A recent study by Aviva showed that over haf of those questioned woud have to rey on savings to pay for unforeseen medica bis, with one in five reying on a credit card 9. A quarter of peope woud even se persona items to cover payment! Cash pans offer an easy, ow cost way to hep protect you and your famiy. 6 Source: Interna data from Aviva UK Heath 7 Source: Laing & Buisson, UK Market Report August 2009 8 Minte, Heath Cash Pans & Private Medica Insurance, Finance Inteigence, August 2009. 9 Source: Aviva s Make do and Mend survey, October 2010. aviva.co.uk/heath 5
Private Heath Insurance Private heath insurance offers prompt access to non-emergency treatment (secondary care) as a private patient. If a customer is diagnosed with a specific medica condition (caed an acute medica condition) they wi be referred to a private speciaist by their GP and wi receive treatment in a private hospita. This means there is a choice over when and where they are treated, providing peace of mind shoud they need to caim. Acute vs Chronic It is important to note that private heath insurance ony covers acute conditions, which means short-term heath probems that can be cured with medica treatment. Private heath insurance poicies wi generay not cover a chronic condition, which is a heath probem that is permanent or ikey to continue indefinitey (or recur). This aso appies for conditions to which there is no known cure. It may however, cover an acute phase of a chronic condition. In 2009, Aviva UK Heath paid out 289 miion for medica treatment for its private heath insurance customers 10. To demonstrate the cover offered by private heath insurance products, Aviva s Heathier Soutions poicy offers the foowing core cover: Treatment at one of more than 300 hospitas Private heath insurance is a waste of money if you don t get sick Private heath insurance heps you ead a heathy ifestye, as we as heping when you get sick - Aviva s Heathier Soutions, for exampe, aows you discounted gym membership at seected UK gyms, access to the MyHeathCounts service and access to GP and stress counseing hepines Wi pre-existing conditions be covered? Most insurers offer two main underwriting options. Fu medica underwriting means that a medica history is divuged and cover is granted dependent on this, usuay with any pre-existing conditions excuded. Aternativey, moratorium underwriting is aso avaiabe, whereby their medica history is kept private but the customer is automaticay excuded for any condition that they have received treatment for (incuding symptoms and advice), for a preceding period (usuay five years) unti they have gone a number of years (usuay two years) medication, treatment or advice free. Cover is then reinstated for that condition. Private heath insurance poicyhoders Hospita charges Speciaists fees Diagnostics tests Radiotherapy/chemotherapy Private heath insurance is a popuar option in the UK and there are currenty 6.4 miion poicyhoders; the market grew by 1.5% for individua cover in 2008 13. Research has shown that the key drivers for consumers in taking out a private heath insurance poicy are NHS waiting times and standards of hygiene in NHS hospitas 14. Additiona benefits can be added to increase cover or removed to reduce cover. Like cash pans, there are situations where the consumer wi not be covered such as treatment for pre-existing conditions, cosmetic treatments or unproven, experimenta therapies. 10 Source: interna caims data from Aviva UK Heath, March 2010 11 Source: NOP Pain Survey, British Pain Society 2005 12 Source: interna caims data suppied to Aviva through HCML, Mar 2010 6 Cash Pan & Private Heath Insurance Expained
What infuences peope to buy? 15 Negative media coverage such as waiting times, ceaniness, access to drugs and treatment A bad experience of the NHS Heath scares Lifestye changes such as having a famiy or a miestone birthday What are key requirements? 16 Quick treatment More choice with appointment times, consutants and hospitas Hospita environment Persona security Limited hospitas Premiums can often be owered if customers agree in advance to a imited number of hospitas in the country, for exampe just a few in their immediate area. This is a particuary good option if they wish to ower costs without sacrificing care, particuary as most customers are ikey to use ony their oca hospitas anyway. Set a treatment imit Rather than imiting the number of hospitas, it is possibe instead to imit the treatment costs by, for exampe, agreeing to ony benefit from a private operation when the NHS waiting time is over a certain ength of time, usuay six weeks. Another exampe woud be to imit out-patient treatment; customers on Heathier Soutions from Aviva can choose to reduce the out-patient cover avaiabe as standard by seecting either a 500 imit, reducing premiums by 15% or 1,000 imit which woud see a 30% reduction. How can you reduce your private heath insurance premiums? Incude an excess Many private heath insurance pans, in common with other insurance products, incude an excess option to ower premium costs, excesses can often start as ow as 50. Obviousy, in ine with other insurance poicies, the higher the excess, the more premiums can reduce by. However, it is important that the cost is not so high that it woud be impossibe to afford it, particuary if it appies to each treatment rather than each poicy year. For exampe, Aviva offers a choice of 100, 200, 500, 1000, 3,000 and 5,000 excess, a payabe per person per poicy year. The discounts for these options range between 5% and 65%. Muscuoskeeta injury is the most common cause of pain in the UK 11. Back-Up from Aviva heped 4034 private heath insurance customers speak with experts in rehabiitation to hep them manage their condition and get them back on the road to recovery! 12 13 Source: Laing & Buisson, UK Market Report August 2009 14 Source: Minte, Heath Cash Pans & Private Medica Insurance, Finance Inteigence, August 2009. 15 Source: Minte, Heath Cash Pans & Private Medica Insurance, Finance Inteigence, August 2009. 16 Source: Laing & Buisson, Heath & Care Cover UK Market Report 2009 aviva.co.uk/heath 7
Moduar poicies Much ike cash pans, by opting out of certain eements of cover, premiums can be significanty reduced, aowing consumers to retain ony the eements that are reay important to them. For exampe, some might ony be interested in in-patient treatment and happy to wait for out-patient treatment on the NHS. No caim discount In the same way as other types of insurance, many private heath insurance products offer a no caim discount, which gives a discount off the foowing year s premium if there are no caims made in that year. For each year that the customer does not caim, they wi continue to receive the discount up to a certain amount. Customers may aso quaify for a no caim discount if they are switching from one insurer to another. Poicies that reward you for being heathy It stands to reason that maintaining good heath means you are ess ikey to caim on your heath pan and for this reason, many of the main providers offer poicies with a weness aspect. For exampe, Aviva UK Heath offers MyHeathCounts as part of their individua heath insurance poicy and this rewards those customers who take steps to activey ead a heathy ifestye with a reduction in their premium. Customers are aso abe to benefit from additiona offers such as discounted gym membership at seected UK gyms and weness checks. When I saw that Aviva was offering MyHeathCounts I was interested. I thought I was generay OK but I had some concerns about diabetes because of my famiy history, and I d gone up a trouser size. So I visited the pharmacist and had a heath check. I knew I was overweight but sti had a bit of a shock when the pharmacist tod me the resuts. I was obese and my choestero eves were a cause for concern. When I got home I checked my Q Score onine. It was ony 45 and cacuated that I had a 20% chance of having a heart attack or stroke in the next 10 years if I were to do nothing. When I saw it put together ike that it was very motivating. I changed my diet straight away and started waking more and bought a cross-trainer. After about a month, I had the fu test again and my choestero had started to reay improve. Now I ve ost neary two stone and my BMI is 25.9. The ast time I checked, my Q Score had gone up to 75 and I m back in my od size trousers. I do have to push mysef some days, but I fee refreshed after exercising and get a rea sense of achievement. Overa, it doesn t fee ike I ve made any radica changes and I m enjoying it. The best thing is my Q Score quaified me for a12.5%discount on my premium next year. Nige Freebody, 59, Hampshire 8 Cash Pan & Private Heath Insurance Expained
How do the two pans match up? Cash pan Designed to pay out fixed amounts of cash to hep with everyday check-ups and treatment on the NHS or privatey. Denta and optica cover is a key standard benefit. The majority won t pay for certain fees such as in-patient and day-patient speciaist fees (other than therapy treatments such as homeopathy). There may aso be a imit on out-patient treatment. Provides reimbursements to hep with prescription and other GP charges. May cater for emergency care but ony a imited cash benefit avaiabe. Private heath insurance Designed to cover the treatment of acute medica conditions in a private hospita. Denta and optica are not covered as standard but can be added for an additiona premium on some poicies. Offers benefits for speciaist fees, diagnostic tests and hospita charges. Won t generay pay for primary care athough may have imited cover. Won t cater for emergency care. aviva.co.uk/heath 9
Concusion How cash pan and private heath insurance can compement each other Heath cover can be perceived to be more compicated than many forms of insurance and consumers may fee confused regarding what is covered and the benefits they are entited to. Understanding the roe of each product or poicy and taioring it to individua requirements can hep put consumers minds at rest. Cash pans, with their focus on primary care, are designed to hep spread the costs of unavoidabe, everyday heathcare needs such as denta and optica check-ups and treatment and prescription charges. Private heath insurance offers speciaist diagnostics and private hospita treatment for customers who have been referred by their GP to a speciaist. By understanding the distinct offer of each product, customers can make informed choices about which, or potentiay both, poicies woud suit their need. Our case study demonstrates how hepfu it can be to purchase both poicies. For more information about Aviva s products and services visit www.aviva.co.uk/heath. Case Study (fictiona) Sarah (35) and Mike (37) are typica Aviva Cash Pan and private heath insurance poicyhoders. They are married with two chidren and were ooking for peace of mind pus hep with monthy budgets, making both of these product offerings idea and cost-effective. Mike recenty caimed for a root cana procedure that woud have cost 198 at an NHS dentist, a arge amount of money to come out of the monthy budget in one go. As My Heath Cash Pan has the fexibiity to enabe him to choose how to spend his combined denta & optica reimbursement of up to 250, Mike decides to caim his 198 back and has enough eft over to caim towards any other denta or optica treatments he has ater in the year. The private heath insurance poicy has aso recenty payed its crucia part in supporting the famiy when Sarah required an operation on her knee and their son needed a tonsiectomy. This offered the famiy assurance that they coud have the operations swifty and in a oca private hospita. 10 Cash Pan & Private Heath Insurance Expained
Aviva Heath UK Limited. Registered in Engand Number 2464270. Registered Office 8 Surrey Street Norwich NR1 3NG. This insurance is underwritten by Aviva Insurance Limited. Registered in Scotand Number 2116, Registered Office Pitheavis, Perth PH2 0NH. Authorised and reguated by the Financia Services Authority. Aviva Heath UK Limited, Head Office: Chiworth House Hampshire Corporate Park Tempars Way Easteigh Hampshire SO53 3RY. aviva.co.uk/heath GEN3480 11/2011 Aviva pc